Can We Make a Rationed World a Rational World?

In his new book Stan Cox argues that rationing—whether for food, water, energy, or medical care—will be the only logical way to combine sustainability and fairness.
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(PHOTO: TERENCE MENDOZA/SHUTTERSTOCK)

(PHOTO: TERENCE MENDOZA/SHUTTERSTOCK)

The Atlantic named him one of its Brave Thinkers of 2012, while The Economist dubbed him a "polemical plant scientist." What Stan Cox is for sure is a senior researcher at the Land Institute in Salina, Kansas, working on breeding perennial grains for new, ecologically-sound food systems.  He’s also a writer, and last year’s accolades from The Atlantic followed largely on the strength of his previous book, Losing Our Cool, in which Cox argued that the developed world needs to greatly reduce our dependence on air conditioning.

In his latest book, Any Way You Slice It, Cox makes the case that rationing—in areas such as food, water, energy, and health care—is a necessary element of humanity’s future. It’s not a message that those who value a free market and an ever-growing economy want to hear. One health care expert whose work is referenced in the book compares advocacy of rationing to “shouting an obscenity in church.”

I connected with Cox while he was writing Any Way, and shared some of my research for The Sense of Fairness series of articles, two of which ("The Evolution of Fairness" and "Are We Born With a Sense of Fairness?") have been published at PSmag.com.

I talked with him about why he thinks we need to institute rationing, and why he believes it’s a necessary component of a fair and sustainable society.

Why do we need rationing? Can’t we rely on market forces to set a fair price that keeps supply and demand in balance?
In theory, allocation according to "willingness to pay," measured through prices, is the perfectly efficient way to match supply and demand. But when the overall supply of some good is limited by external circumstances, more affluent consumers bid up the price of the good to the point at which only they can afford it, a point at which allocation is based instead on “ability to pay.”

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So, allocating by “ability to pay” is one way in which demand can be reduced so that it is in balance with the constrained supply. But to suppress demand by making basic necessities like food, water, and energy widely unaffordable is not only cruel, it inevitably triggers social unrest. A variety of external circumstances have restricted supply in the past and present: war, drought, volatility in international markets, etc. And someday we might even adopt a policy of leaving fossil fuels or other resources in the ground in order to ward off global ecological crisis. With such a restriction of supply in a free market, prices would almost certainly rise to unacceptable heights, and we would need other means of ensuring fair shares for all.

Is allocation by “ability to pay” a de facto version of rationing?
Some economists speak of rationing only as the thing that happens when prices are not keeping supply and demand in balance. Others speak of the "rationing function of price" itself. In a highly unequal world like ours, the key element of willingness-to-pay is ability-to-pay.

Economists have shown this theoretically, and Any Way You Slice It contains several stories of how the huge imbalance in ability-to-pay results in terribly unfair distribution. For example, in 2011, the New York Times reported that quinoa, the tasty, nutritious grain native to South America, had become wildly popular in this country. Health-conscious consumers here had bid up the world price to the point at which "fewer Bolivians can now afford it, hastening their embrace of cheaper, processed foods and raising fears of malnutrition in a country that has long struggled with it.”

You focus on four realms where you think rationing will be necessary—energy, food, water, and medical care. Why these?
Although luxury consumption can do the world a lot of harm, equitable distribution is most crucial for basic necessities. So we have a lot of past and current experience in different ways of rationing energy, food, water, and medical care.

Fair rationing of water, for example, is technically the easiest to accomplish, although the political obstacles can be formidable. Food is also pretty straightforward, except that in many present-day economies you have two separate pools of food: the subsidized pool, which is rationed, and the rest of the food supply, which is not. With that, a lot of questions arise about who is eligible for rations, the relative merits of rations versus straight cash aid, etc.

Understanding energy rationing is important, of course, if we decide to get serious about greenhouse emissions, and there you have the complication that we would be trying to ration when scarcity is not absolute but a matter of policy.

And finally there's the problem of rationing medical care, which involves the thorniest complications and the most deep-seated emotions. If you do a U.S. news search for the word "rationing" these days, most of the articles will be on the health-care debate, and they will usually involve each of the adversaries charging that if the other side prevails, rationing will be the result. Meanwhile, of course, our system, like all health-care systems, practices rationing in one form or another all the time.

"Although luxury consumption can do the world a lot of harm, equitable distribution is most crucial for basic necessities."

What role does fairness play in the design of rationing systems? Who decides what’s fair?
Fairness is one of the two fundamental goals of rationing, with restraint of overall consumption being the other. Experience, especially in wartime, has shown that people will tolerate, and even applaud, consumption controls if it is clear that everyone is abiding by the same rules and getting an equitable share. But as you know, it's often not a simple thing to define fairness or to come to agreement on what really is fair. When, as with water and often with food, it's possible to define daily requirements, the default setting for fair shares tends to be equal shares. But fair doesn't always mean equal: In wartime, people doing hard labor received larger food rations, which was logical.

People who have tried to design carbon-emissions rationing systems have grappled with the problem of differing circumstances: should a family that cannot afford good windows and insulation get a larger share of electricity, or should someone who cannot afford to live close to work or buy a fuel-efficient car get a larger gas ration?

And as always, medical rationing suffers the most complicated dilemmas. Philosophers have worked that area over pretty well, with little resolution. But in the health-care world, there are two principles that, while impossible to fulfill completely, give us something to go on: one, decisions on how to share resources must be made by people who are not and do not foresee being affected themselves by those same decisions, and two, if explicit discrimination is necessary, it should be against less effective drugs or procedures, not against individuals or classes of people.

Do we have anything positive to look forward to, or merely a shrinking economy and an end to growth?
Shrinkage, in our experience, is what happens when the economy is hit with a recession or depression, with mass misery being the usual result. We don't want that; instead, the slowing or reversal of growth should be planned in a rational, humane way. Peter Victor of York University in Toronto, for instance, has shown how—if public policy and productive forces are explicitly directed toward sustaining a high quality of life for all and not toward enriching a few—a negative-growth economy can enjoy deep reductions in unemployment and poverty rates, with a decrease in debt as well.

Economists, politicians, and corporate boards greet any suggestion of growth reversal with dire warnings of stagnation. But of course, chronic stagnation and unemployment have already become all too familiar in today's economy. They are the default state of mature capitalism. And ironically, at the root of that stagnation is not a lack of productivity but rather the same phenomenon that has fostered ecological crisis: overproduction. The huge increases in productivity per hour worked in recent decades have created more problems than solutions. Workers are not getting any of the benefit from their own increased production.

Income-short families should get a fairer share of their high productivity back in wages, and with fewer resources available for economic growth, all workers should get a leisure dividend in the form of shorter work hours. That would be a highly effective way to curb destructive growth while improving quality of life. And if ecological limits lead to a shift away from energy-hungry technologies back toward human abilities, many more jobs will be created.

What is the relationship between fairness, rationing, and sustainability?
I wrote this book largely because the kinds of people with whom I am largely in agreement tend to fall into two groups with different sets of views, neither of which captures the current crisis in its entirety. Those who are calling for a steady-state economy or degrowth as the only way to achieve sustainability often note that it should be done fairly, without adding to the already heavy burden of deprivation felt by billions of people, but they rarely discuss how that could be done.

On the other hand, those who are focused on achieving global economic justice rarely talk about how we can achieve that without badly overshooting the planet's ecological limits. We have to work toward sustainability and fairness simultaneously, or we will get neither. I'm not saying rationing alone will achieve that; I am saying that a thoroughgoing economic transformation—you can call it a revolution—is required if we're to achieve real sustainability and sufficiency, and if we succeed in that, we will find that rationing becomes a necessary part of life.

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