Prosperity Without Growth:Economics for a Finite Planet

This book is asking people to forgo the values and economic motivations that are drummed into them everyday as 'good', in their interest and benefit of everybody else.

At the other end, we are told, and gradually incorporating the idea, that humans are causing climate change, pollution and degradation of resources.

However, people are unwilling or afraid to view the two ideas as related if not causal.

If there is wilful blindness in the public it is reinforced by government that is petrified with what it sees as disrupting its raison d'etre. Democratic governments have always been about staying in power by improving the economic welfare of the voters or convincing them of such.

And over the last four or five decades governments have co-operated with business to launch metrics such as the GDP and employment as a measure of success. Growing GDP has been the most important worldwide policy goal since the last half of the 20th century.

“The role of government has been framed so narrowly by material and hollowed out by a misguided vision of unbounded consumer freedoms.” “Allegiance to growth was the single most dominant feature of an economic and political system that led the world to the brink of disaster.”

Jackson says that consumer debt is a mechanism used to free personal spending from the constraints of wage income. This is more prominent in the liberal market economies of the English speaking democracies versus the co-ordinated market economies of Europe.

A growing economy with greater employment and productivity is an unexamined 'good'. In our capitalist society questioning it is not only heretical, but ungrateful. This is compounded by the decreasing sensitivity to nature in a growing insulated urban population. The 2007-08 crisis was a product of “policies put in place to stimulate growth in the economy” (increasing liquidity being a big one).

It is with this background and the flush of the 2008 financial disaster that British economist Tim Jackson nudges us to consider the incongruity of our values.

I say 'nudges' because this is not a fire and brimstone sermon aimed at devils, but an invitation to collaborate on improving a fateful imbalance in what we want and what the world can provide.

Jackson's declared aim is “to seek viable responses to the biggest dilemma of our times: reconciling our aspirations for the good life with the constraints of a finite planet.”

Both population growth and increasing demand are involved in the problem, says Jackson, but currently “increasing affluence is driving resource throughput faster than population growth is.”

Our ecological debts are as unstable as financial and neither is properly accounted for while pursuing growth.

Consequences include “it is estimated that 60 per cent of the world's ecosystem services have been degraded or over-used since the mid-20th century.”

While increased happiness seems the premise for the undeclared obsession with economic growth, there has been little happiness change as U.S. individual wealth has tripled since 1950. Japan too has experienced little change, adds Jackson.

He says there is no reason to abandon growth universally and it could increase happiness in poor countries. He says people shouldn't obsess over the idea that prosperity and instantaneous gratification are basically the same. Social and psychological functionings don't seem best served by materialism. However, as a species we do seem to put social and psychological meaning (worth) into things we buy and own (keeping up with the Jones's). Often the issue of possessions is not absolute, but in comparison with those around.

Jackson suggests finding less materialistic ways of participating in the life of society. He says the returns to growth diminish substantially beyond $15,000 per capita.

He indicates where an economic crisis or decline was accompanied by increased health and life expectancy. Japan during the crisis of the 1990s was an example as was Cuba with the cutoff of Soviet assistance. However, iron curtain countries suffered with their liberation. Cuba's situation seems a combination of less food, more activity and “state-led social provision”.

The author outlines the principle of “decoupling” whereby more production is yielded with less energy, inputs and waste. While that is generally occurring it is more than countered by increasing demand for more goods and a growing population.

To get a net decrease in emissions, given current conditions (2009), they must have to decrease by seven per cent per year, about 10 times the current rate. He suggests we are reluctant, maybe fearful, to investigate this given the economic priorities. Ultimately Europe and North America will have to lower consumption, so far satisfied to let the belching supporting their consumption occur in a poor distant country.

Banking on a technological silver bullet or an inspired response by capitalism is delusional. However, he suggests there may be a subconscious fear that the good life can't last forever.

Jackson's relating of the four kinds of capitalism is enlightening: state-guided, oligarchic, big-firm and entrepreneurial . Some may try to discount some kinds as not being democratic, as though capitalism has 'freedom' as a bulwark.

While it is hard to know where the ecological limits are, he says, it is pretty certain that current economic activity is exceeding them in many areas.

“The circular flow of production and consumption may once have been a useful way of organizing human society to ensure that people's material needs are catered for. But what does this continual cycle of creative destruction have to do with human flourishing?” “Isn't there a point where enough is enough?”

He also points out that “the cycles of creative destruction are becoming more frequent as product lifetimes plummet as durability is designed out of consumer goods and obsolescence is designed in.” Quality gives way to volume. It is not so much consumer greed, he adds, “as a structural prerequisite for survival.”

But for consumers the need is fundamental only in the initial stages then it is to satisfy social and community needs. Quest for novelty is part of that need. People invent and re-invent themselves for a satisfying place in society. He refers to us as in an “iron cage of consumerism”

“There is something distinctly odd about our persistent refusal to countenance the possibility of anything other than growth-based economics.” Extrapolating on John Keynes, he speculated that the “economic problem” would be solved and energies could be devoted to non-economic pursuits.

Jackson says economic training rarely refers to 'natural resources' or 'ecological limits'.

The only solution to the dilemma is to make growth sustainable or to make de-growth stable, he says.

Toward the former one may have to abandon new unsustainable technologies in favour of more modest. And I love his example: “the humble broom would have to be preferred to the diabolical 'leaf blower',” he says.

Jackson describes work as meaningful human participation in society and removing it a direct hit at 'flourishing'. To keep it, effort may have to be shifted to other endeavours. He also advocates work sharing and a 'basic income'.

He does say that this move from a growth to a no growth economy has to be managed carefully. Reduction in consumption needs to be balanced with 'ecological investment'. “Material goods provide a vital language through which we communicate with each other about things that really matter:family, identity, friendship, community, purpose of life.” As well as being unsustainable, excess materialism is now actively detracting from human well being, he adds.

But the dilemma “while social progress depends on the self-reinforcing cycle of novelty and anxiety, the problem can only get worse.” “Unproductive status competition increases material throughput and creates stress.”

The prevailing structure of wages “has consistently rewarded competitive and materialistic outcomes even when these are socially detrimental.”

It would also require rethinking “ownership of assets” and distribution of surplus from them. A greater role for public sector investment and asset ownership may follow.

As well as being cognizant of energy and resource consumption, a value will have to be put on ecosystem services.

Abandoning the “mindless infatuation with labour productivity” will also be needed.

Jackson says that government already “shapes and co-creates social policy so changing is less problematic than many portray.” And among the first would be removing “perverse incentives in favour of materialistic individualism”. Bombarded with persuasion and seduced by novelty, adults become like children in a candy shop. And while we know it is bad, we can't resist.

As we have natural impulses toward individualism and novelty we also have them toward altruism and stability. Society now favours the former as the way to 'keep the economy going'. Government policy can alter the mix. Currently the dilemma between economic growth and ecosystem breakdown is unrecognized in mainstream policy. Effectively affluence is betraying us, he says.

And this circle makes it difficult to escape the cycle short of overriding policy change. And currently incentives are still encouraging more consumerism. Growth in industrializing economies is built on domestic consumption and trade between industrializing nations. And consumption is progressively more debt-driven with money created by banks which are allowed to lend far more than is on deposit. Governments can curtail this.

“We”, Jackson says “are the first society to hand over so much of our social and psychological functioning to materialistic pursuits.”

Carbon emissions seem to be growing at three per cent per year. And the use of carbon is not the only consumption issue. Jackson suggests that caps should be put on the use of other resources.

And a currently recognized problem; “tackling inequality would reduce social costs, improve quality of life and change the dynamic of status consumption.”

He briefly refers to commercial media, specifically advertising to children. Further he calls for addressing durability of goods as it applies to planned obsolescence. Currently the trend is toward both less durability and earlier obsolescence.

“Beyond provision of nutrition and shelter, prosperity consists in our ability to participate in the life of society, in our sense of shared meaning and purpose and in our capacity to dream.” That may be the ultimate challenge to meet, amid less consumption. Public facilities can go some way to meet this as would common endeavour.

And in a crescendo Jackson summarizes our inability to fulfill hopes with material growth is facing the possibility in a generation or two, of a hostile climate, depleted resources, destruction of habitats, decimation of species, food scarcity, mass migrations and almost inevitably war.