In this mutli-part series, Sanat Mohanty discusses why we have to look for alternatives and what kinds of alternatives we should look for. This sixth piece of the series presents the unclaimed externalities of development.

Part I: What is the point of this discussion?
Part II: Therefore Alternatives: Fundamentalism of our Societies
Part III: Therefore Alternatives: Survival of the Fittest
Part IV: Therefore Alternatives: Capitalism, Communism and Free Markets
Part V: Therefore Alternatives: Capitalism, Communism and Free Markets

Impact of Externalities
While you do make this point about development, it is still not clear how companies are able to make such profits and yet hurt people. Surely, if they profit by selling things to people, people must want their goods. And since they employee people, the profits they make must obviously go back to people. So the process of development must surely cause greater good?

One of the biggest fine prints in the packaging of development is in the externalities.

When you leave a refrigerator door open in a closed room, while the space in front of the refrigerator might get cooler, the room actually grows warmer. While cool air comes out from the front, the compressor has to work much harder and is actually dumping much more heat in the room. In fact, numerous physicists and economists have pointed out that these externalities could be ignored only when the size and scales of our economies were small . Now that they encompass the entire world, these externalities cannot be ignored and in fact threaten the very life of this planet.

Companies often use resources that they do not pay for – that is the reason that they are able to make so much more profits. On the other hand, destruction of these resources, or their degradation hurts communities much more than they gain from the profits of the corporation trickling down.

A personal computer today costs about $500. Given that one needs 1200 gallons of water to make a PC as well as humungous cleaning facilities and hazardous solutions (all of which should be treated and cleaned before effluents are discharged), the true cost of a computer is much higher. However, these are often dumped as externalities? Who pays for these? It is often communities around these facilities who pay for it with their health. The same is true in accounting for the cost of transport – who pays for the pollution of the air? Who pays for the displacement of people around an Aluminium mine? Who pays for the tailing ponds and tones of waste and effluents? Who pays for the pollution caused by thermal power plants?

That is the reason that there are poor people in the vicinity of these ‘development’ projects. These people work hard – often putting in longer hours in more stressful environments than the middle class around the world. They continue to be poor and deprived because what they have lost through the degrading resources and the smaller access to it is not compensated by this employment.

Communities thrown out of their land in rural sections owing to building of mines, dams or power projects have no option but to move to the slums in the cities. Most of them live in the fringes of human existence. If they are lucky, they ‘make it’ by living in a better slum and having access to a cell phone and television, at best they have access to non-potable water, no access to disposal of human waste in a healthy manner and often live in squalor. What they lose in poor health, in erosion of access to resources and in the breakdown of their family, is not compensated by some form of employment in these urban ‘development’ centers.

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