Vested Interests

Vested Interests Vested Interests Institutions and practices endure because certain individuals and groups benefit from them. Generally, those that benefit do what they can to ensure the institutions and practices continue and become stronger. There are many beneficiaries of the current paradigm of economic growth, each of whom actively supports it.

Self Interest as a Core Virtue Personal self interest has been exhaulted to the status of a core virtue in Western societies. Derived from economic theory and reinforced by the Western notion of individualism, the pursuit of personal self interest has become a justification for consumption and greed. Self interest has also become a justification for ignoring, and even ridiculing, the pursuit of the common good. Economic theory claims that the pursuit of personal self interest will generate the greatest good for the greatest number. From this perspective not only is independent pursuit of the common good unnecessary, it is actually considered counterproductive as it may interfere with the market mechanism. It is this belief that underlies efforts to reduce the size and role of government (see Causes of Scale Problems: Obsolete Public Policies), the key institution responsible for ensuring the common good.

Businesses and Investors The creation of wealth in the last half century is unprecedented in human history. The wealth created is not evenly distributed but disproportionally allocated to those who successfully operate businesses. Investors who provide financial backing also reap disproportional rewards. Many employees at more senior levels and unionized workers also share in the benefits. Those who benefit most generally play a much more active role in maintaining the status quo. They have the disposable financial resources to spend in furthering their cause. Individual corporations, as well as business associations and lobbies, and business supported policy institutes, expend considerable resources in supporting and expanding the dominant paradigm of economic growth.

Governments and Politicians Politicians and government officials the world over increasingly view economic growth as the key to electoral success (see Causes of Scale Problems: Obsolete Public Policies). Factors reinforcing this phenomenon are the increasing reliance on election campaign contributions from the business sector, and the revolving door feature of appointments at senior levels of government and business.

Professional Disciplines and Institutions Coevolving with economic theory were a variety of related disciplines such as accounting, finance, law, corporate management and advertising. These disciplines are intimately intertwined with economics and each other, creating a complex web of interconnections that are mutually reinforced on a daily basis. Each of these disciplines relies on the continued growth of economic activity, and thus has vested interests in such growth.

The Consuming Elite Across the globe there is a social stratum that enjoys the major benefits of economic growth. The majority live in developed countries but substantial numbers live in undeveloped areas as well. They generally associate their happiness with economic growth and enjoy various luxury goods and services. Collectively, they represent approximately 10% of the world’s population, but control XX % of the world’s wealth. They are either business leaders, politicians, or professionals, or have access to this upper echelon of society through the ballot or their role as consumers. Such people have a vested interested in continued economic growth. This interest is justified and reinforced by the neoclassical economics dictum that social benefits accrue to those who pursue their own self interest through individual market decisions.

Comfortable Consumers In addition to the consuming elite, approximately 18% of the world''s population enjoys incomes over $7,000 (US) of purchasing power parity, which is roughly the official poverty line in Western Europe.¹ Only 17% of these individuals live in developing countries.

Majority Excluded The other 72% of humanity lives below the poverty level of Western Europe; approximately 3 billion subsist on $2 or less a day. The common wisdom is that the vast majority would like to enjoy the material benefits of the more well to do. If there is any justification for continued economic growth it is to meet the basic needs of this group. Given their large numbers, it is essential to do so in an ecologically sustainable way (see Attractive Solutions).

References

¹Worldwatch Institute. State of the World 2004. New York: W. W. Norton & Company, 2004: p.6.