Book reviews

tion faced by developing countries, tariff escalation against processed primary exported commodities, prob- lems of production, trade and supply security of food commodities in de- veloping countries relative to growing consumption needs, and commodity market instability. These issues are then discussed in terms of their pre- sent and future urgency, first in gener- al, and subsequently in detail in the ensuing chapters.

Chapter 5. Considerable attention in this respect is paid to the different features of the UNCTAD Integrated Programme for Commodities, and the Common Fund.

Terms of trade

The second chapter addresses the way in which the current structure of prim- ary commodity trade has developed and how patterns and trends in this trade have affected developing coun- tries. Of particular importance is the share of various commodities in total trade, and direction of trade and problems of concentration. Trade is examined not only in the traditional North-South context but also in rela- tion to the South-South and the South-COMECON configurations. The declining share of commodity exports by developing countries is explained not so much by a growing export share of manufacturers as by the agricultural policies of OECD countries. The problem of terms of trade, while it falls in the above category, is sufficiently important to be taken up separately in Chapter 3. Different terms of trade estimates are examined and results displayed are mixed regarding the hypothesis of an absolute decline in the value of this index for developing countries.

In Chapter 6 the authors move from a historical to a future perspective. Projections to the 1990s for the con- sumption, production, exports and im- ports of the major commodities are presented and evaluated. Prospects are also considered for food security, agricultural protection, commodity agreements, commodity processing and marketing, and improvements in market transparency and futures mar- kets. These projections and prospects are then compared with other findings from the earlier chapters to provide a summary perspective in Chapter 7. Considerable emphasis is placed on the role that improvements in tariff structure would have on trade and growth of the developing countries.

modity market problems and policies. Given the change that has taken place in commodity markets since UN- CTAD V, the updating of the various tables and the inclusion of events since 1981 would have been much appreci- ated by readers. While the appendices do feature a brief summary of quan- titative methods and models employed in commodity market analysis, the book concentrates more on analysing past research than conducting new modelling exercises. This in itself, of course, is very helpful. The book thus constitutes a useful source of informa- tion for researchers, and policy mak- ers should appreciate its in depth analysis of many of the complex issues involved in the economics of interna- tional commodity markets.

There is no doubt that this book provides a valuable contribution in its broad overview of international com-

Walter C. Labys Departnient of Mineral Resources Economics

West Virginia University Morgantown, WV, USA

Modern Cassandras THE CASSANDRA CONFERENCE: RESOURCES AND THE HUMAN PREDICAMENT

the potential of human beings to better their condition or at least main- tain it by the wise use of technology, at the same time he warned against the

Edited by Paul R. Ehrlich and John P. danger of overconfidence in the pow-

Holdren ers of technology. In particular he was concerned about insensitivity to the

Texas A. and M. University Press, TX, finiteness of non-renewable physical

1988, 330 pp, US$14.95 resources. His papers and speeches on this topic were well researched and

The analysis of various methods of measuring instability as well as of studies regarding commodity market instability are taken up in Chapter 4. While the adverse consequences of instability for investments, exchange earnings and economic growth are well known, the authors point to the difficulty of employing either cross section or time series methods to measure these consequences empir- ically. They thus suggest a more dis- aggregated view of how developing country economies are affected. Poli- cies which might be formulated to stabilize these markets and to counter- act these effects are evaluated in

This volume comprises the 16 con- eloquent; they inspired many people, tributions to the Cassandra conference including the reviewer, to heed his

held at Texas A. and M. University in ‘early warning’ and to study non-

May 1985 to honour Earl Cook’s renewable resource problems and en-

memory but also, as Paul Ehrlich and courage others to do the same. John Holdren say in their editors’ The papers in this book were writ-

preface, to celebrate the importance ten by outstanding analysts of such

of ‘early warning’ regarding resource diverse topics as population growth,

availability problems of the future. energy and material resources, agri-

Earl Cook was a very distinguished cultural resources, acid rain, toxic

American earth scientist and a mod- substances in the biosphere and even

ern Cassandra. The original Cassan- including the ecology of nuclear war.

dra of Greek mythology had the gift of These writings are not only clear and

predicting the future but her warnings readable, they are in a language which

went unheeded. Had they been the intelligent lay person might be

heeded, the disasters she predicted expected to follow. could probably have been averted. Although these modern Cassandras

Now although Cook believed firmly in study diverse topics, they share a

306 RESOURCES POLICY December 1988

belief in the interrelatedness of these subproblems which, in the aggregate, constitute what has become widely known as the ‘human predicament’ of the future. Solutions adopted to deal with the individual problems must respect their interconnectedness, and this is something stressed by the two editors of the book in a short epilogue. They conclude by pointing out that modern Cassandras are not saying simply ‘doom’ in the future but ‘doom IF . .‘, and alternative courses of action can be prescribed to prevent the ‘IF’ coming true.

resources in general. The best to be hoped for from a perfect market would be a Pareto optimal allocation of resources: that is, no one can become better off without someone else being made worse off.

Perhaps the most important con- tribution in this book is by Herman Daly, now alumni professor of econo- mics at Louisiana State University, on ‘Moving to a steady state economy’. At present we live in a ‘growth eco- nomy’, which means we have to in- crease our matter-energy throughput to sustain growth in production of commodities associated with growth in economic activity. Since the world has fixed physical resources, increase in the production of commodities cannot go on for ever.

In a ‘steady state economy’ (SSE), the aggregate throughput would be constant, though its allocation among competing uses would be free to vary in response to the market. Develop- ment in the SSE could occur by qualitative improvement in the use made of a given scale of physical throughput resulting from new tech- nical knowledge or perhaps a growing, deeper understanding of purpose in society. Thus a SSE can develop but cannot grow, just as the planet, of which it is a subsystem, can develop without actually growing. Daly stres- ses that the steady state is not a static state for there is continual renewal by death and birth, depreciation and production as well as qualitative im- provements in the stocks of people and artefacts.

The ‘growth economy’, part of the conventional wisdom accepted so un- questioningly by the major political parties, runs into two kinds of fun- damental limits when projected into the future: the biophysical and what Herman Daly defines as the ethicoso- cial. The former limits arise from

finitude, entropy and ecology. The ethicosocial limits arise from the costs imposed on future generations and also the corrosive effects on moral standards resulting from the very atti- tudes that foster growth, such as the glorification of self interest. The growth economy is also limited by its self cancelling effects on welfare - Keynes argued that absolute wants may be satiable but relative wants are insatiable, or, as J.S. Mill put it, ‘Men do not desire to be rich, but to be richer than other men’. (Daly points out that a good working illustration of the self cancelling trap is the contem- porary arms race.)

One of the stoutest exponents of the growth economy and opponent of the SSE is Julian Simon, chief editor of

The European gas industry

NATURAL GAS IN EUROPE: MARKETS, ORGANISATION AND POLITICS

by Javier Estrada, Helge Ole Bergen- sen, Arild Moe, and Anne Kristin Sydnes

Pinter Publishers, London, 1988, f30.00

But a crucial feature of the SSE is that it must be ecologically sustainable for a very long future for a population living at a per capita resource use sufficient for a ‘good life’. The market cannot guarantee this. Market prices measure scarcity of individual re- sources relative to each other; they do not measure the absolute scarcity of

The economics of natural gas is a complex hybrid of oil and electricity. Like oil, natural gas can have high resource rents, but can involve signifi- cant risks in finding, delineating, and developing reserves. Like electricity, the high capital costs of gas pipelines usually make the transmission and distribution of gas a natural monop-

RESOURCES POLICY December 1988

Book reviews

The Resourceful Earth (see review by present author in December 1984 issue of Resources Policy). Simon and his supporters came in for criticism at the Cassandra conference in the pap- ers by Luten, Cook and Cook, and Daly. These authors pour scorn on Simon’s faith in such propositions as ‘basic resources are getting more abundant’; ‘world food production is growing faster than population’; and ‘population growth is a good thing because more people means more genius and talent to extend human ability to “create” new resources’. The Simon school believes that non- physical factors such as capital (money) and technology can be substi- tuted for physical resources. Accept- ance of this view leads to the conclu- sion that we can have material output without material input and thus we arrive at the ‘creation economist’s’ version of perpetual motion! The laws of thermodynamics are bypassed and the concept of entropy ignored. Yet creationist economists rely heavily on technologists, who have to work with- in these physical laws!

Fred Roberts Richmond

North Yorkshire UK

oly. Because of these two aspects the natural gas industry in most countries outside North America is dominated by a few large profitable corporations, often with state ownership. Further, the distribution of gas reserves in Europe are such that in most countries there is either insufficient supply to meet demand, or vice versa. Interna- tional trade in natural gas has de- veloped to take advantage of these market opportunities. However, be- cause of the nature of the natural gas industry the terms of this trade are determined by secret bilateral negotia- tions between states and large cor- porations.

A new book by Javier Estrada, Helge Ole Bergensen, Arild Moe and Anne Kristin Syndes of the Fridtjof

307