The economy is our servant, not our master.
“The idea of a non-growing economy may be anathema to an economist. But the idea of a continually growing economy is anathema to an ecologist.” — Tim Jackson
I recently re-read Prosperity Without Growth, by Professor Tim Jackson. The first edition was originally released as a report by the Sustainable Development Commission. The study rapidly became the most downloaded report in the Commission’s nine-year history when it was published in 2009. Later that year a reworked version was published as a book, and the following year Tim Jackson spoke at TED. A new, significantly revised and expanded version came out in 2017, so if you haven’t read it recently, you might want to revisit it.
The main thrust of the book is that economic growth has only limited capacity to deliver wellbeing, but huge capacity to trash the planet, so we need to strike a balance between a thriving economy and thriving humans, recognising that one is not synonymous with the other. Let’s take a look at his argument in a bit more detail.
“Prosperity itself — as the Latin roots of the English word reveal — is about hope. Hope for the future, hope for our children, hope for ourselves.”
So it’s only in later years that prosperity has come to be equated with financial wealth. Jackson reminds us that using material consumption as a proxy measure for happiness is both flawed and destructive:
“… living well on a finite planet cannot simply be about consuming more and more stuff… Prosperity, in any meaningful sense of the term, is about the quality of our lives and relationships, about the resilience of our communities and about our sense of individual and collective meaning.”
Central to his case is the need for sustainable and equitable wellbeing. If we simply maximise our own individual wellbeing, at the expense of others who live now and in the future, then this is not true prosperity. We need to find a way to deliver the greatest good to the greatest number over the longest period of time. (I’ve written about this before — see Capitalism vs the Environment — How to End the War.) But the systems we have in place at the moment run counter to that goal.
“Our technologies, our economy and our social aspirations are all badly aligned with any meaningful expression of prosperity… In pursuit of the good life today we are systematically eroding the basis for wellbeing tomorrow. In pursuit of our own wellbeing, we are undermining the possibilities for others. We stand in real danger of losing any prospect of a shared and lasting prosperity.”
[For more on this, please see the wonderful book, #FutureGen: Lessons from a Small Country, by Jane Davidson, the former Welsh Minister for the Environment, who helped create the Well-being of Future Generations (Wales) Act 2015 — the first piece of legislation on Earth to place regenerative and sustainable practice at the heart of government.]
It’s clear that we have an obligation to alleviate poverty. More than 3 billion people still live on less than $5 a day. (According to Jason Hickel, overseas aid might help, but halting the systemic exploitation of the Global South would help more — see Of Grabbing and Gifting.) Some countries’ economies clearly do need to grow in order to achieve this.
But in the developed world, many countries are definitely seeing diminishing marginal returns on increases in wealth, or even negative returns. Of course, much depends on how the wealth is distributed — for example, in the US, wealth is distributed in a highly unequal fashion, with the wealthiest 1 percent of families holding about 40% of all wealth and the bottom 90% of families holding less than one-quarter of all wealth, and inequality is known to have a negative impact on wellbeing (see The Spirit Level, by Kate Pickett and Richard Wilkinson). But even besides inequality, an additional $1,000 per annum makes a lot less difference to an American than it would to, say, a Malawian.
“Would it not be better to halt the relentless pursuit of growth in the advanced economies and concentrate instead on sharing out the available resources more equitably?”
With a nod to biomimicry, Jackson quotes Richard Wilhelm’s 1923 translation of the I Ching,
“In nature there are fixed limits for summer and winter, day and night, and these limits give the year its meaning.”
But it would seem that humans, or at least many Western humans, rebel against such limits.
“As more and more people achieve higher and higher levels of affluence, they consume more and more of the world’s resources. Material growth cannot continue indefinitely because planet earth is physically limited. Eventually, the scale of activity passes the carrying capacity of the environment, resulting in a sudden contraction — either controlled or uncontrolled. First the resources supporting humanity — food, minerals, industrial output — begin to decline. This is followed by a collapse in population.”
[See my commentary on William Ophuls’ Immoderate Greatness: Why Civilisations Fail, and in the same blog post, Kevin MacKay on Radical Transformation: Oligarchy, Collapse, and the Crisis of Civilization.]
Echoing the famous 1972 report by the Club of Rome, Limits to Growth, Ophuls warns that by the time the signs become obvious, it will probably be too late:
“The process is insidious. Limits constrict by degrees. Decay creeps in unnoticed. It is only late in the game-usually too late to do much about it-that those living become aware of a gradual and imperceptible transformation that has rendered the civilization increasingly tired, depleted, impoverished, vulnerable, and ineffectual.”
Part of the problem is that our world is a complex adaptive system, an intricate and hard-to-map web of connection in which positive feedback loops can suddenly and unpredictably spiral out of control. As our human society increases in complexity, these invisible dynamics become more and more potent agents of chaos.
This is why many of our current problems are being described as “wicked”, a term coined by Alan Watkins and Ken Wilber in Wicked and Wise: How to Solve the World’s Toughest Problems. A wicked problem is multi-dimensional, has multiple stakeholders, multiple causes, multiple syndromes, multiple solutions, and is constantly evolving, even changing in response to attempts to “fix” it. No wonder they’re quite tricky.
So in a perfect world (which we’re not), we would start to act on a problem as soon as we see it coming. There’s a saying in sailing, if you’re thinking about reefing (meaning: reducing the size of the sail to slow the boat in strong winds), you should already be reefing.
But we haven’t done that. We can see the storm coming, but our response is to hoist more and more sail, doubling down and accelerating towards disaster.
We are already in overshoot on four out of the nine critical biophysical boundaries (see my summary of Kate Raworth’s Doughnut Economics).
The IPCC has calculated that to have a better than 50% chance of meeting the target of no more than 1.5 degrees of climate change:
“…the cumulative carbon dioxide emissions released into the atmosphere since 1870 need to be kept below 2,350 billion metric tonnes. So far, more than 2,000 billion tonnes have been emitted. So the maximum available ‘carbon budget’ between now and the end of the century is only 350 billion tonnes. At the current rate of emissions, this budget would be exhausted within a decade. Beyond that point, meeting the target we would have to rely on largely unspecified negative emission technologies.”
I don’t know about you, but I don’t want to bet the future of humanity on technologies that mostly haven’t been invented yet. (Can’t resist — just have to mention the IPAT equation yet again! Even though Technology (T) has the potential to mitigate increases in Population (P) and Affluence (A), it would have to do so at unprecedented speed and scale to get us out of our existential tight spot.)
Jackson goes on to consider eco-economic “ decoupling “, meaning that growth in dollars is ‘decoupled’ from growth in physical throughputs and environmental impacts, but rather bleakly concludes that: “this hasn’t so far achieved what’s needed. There are no prospects for it doing so in the immediate future.”
“In short, we have no alternative but to question growth. The myth of growth has failed us. It has failed the 3 billion people who still live on little more than the price of a skinny latte from the café next door. It has failed the fragile ecological systems on which we depend for survival. It has failed, spectacularly, in its own terms, to provide economic stability and secure people’s livelihoods.”
“Prosperity consists in our ability to flourish as human beings — within the ecological limits of a finite planet. The challenge for our society is to create the conditions under which this is possible. It is the most urgent task of our times.”
He then turns to a consideration of what true prosperity means, in terms of what actually makes us feel good. As already mentioned, there has long been an assumption that increasing GDP leads to increasing wellbeing, but surveys reveal that maybe the best things in life are indeed free.
“Health, family, friendships and a fulfilment at work are often mentioned ahead of income or material wealth. Freedom and a sense of autonomy seem to matter. So too does a sense of meaning and purpose.”
So if we are optimising for human wellbeing (see my piece on What Are We Optimising For?), then it would seem that we can have our cake and eat it; we can continue to increase wellbeing while reducing our environmental impact.
Jackson goes on to focus on four foundations for the economy of tomorrow, an economy with the potential to deliver a lasting prosperity:
The primary goal of enterprise must be to provide the capabilities for people to flourish. Second, this must happen without destroying the ecological assets on which our future prosperity depends.
He points to the fringe activities that currently form a kind of “Cinderella economy”, as he calls it (and it is maybe no coincidence that the metaphor is feminine): community energy projects, local farmers’ markets, slow food cooperatives, sports clubs, libraries, community health and fitness centres, local repair and maintenance services, craft workshops, writing centres, outdoor pursuits, music and drama, yoga, martial arts, meditation, gardening, the restoration of parks and open spaces.
“Good work offers respect, motivation, fulfilment, involvement in community and, in the best cases, a sense of meaning and purpose in life. Sadly, the reality is somewhat different. Too many people are trapped in low-quality jobs with insecure wages, while others are threatened with long-term unemployment from rapid technological transitions. These processes undermine the creativity of the workforce and threaten social stability.”
He highlights the important psychological benefits of meaningful work, and proposes care, craft, and culture as three economic sectors we should focus on:
“…people often achieve a greater sense of wellbeing and fulfilment, both as producers and as consumers of these material-light, employment-rich activities, than they do in the time-poor, materialistic, supermarket economy in which much of our lives is spent.”
“When large proportions of investment are dedicated towards nothing more than asset price speculation, the productive relationship between the present and the future is fundamentally perverted, destabilising the economy and undermining prosperity.”
So we should be investing in the assets on which tomorrow’s prosperity depends, such as schools and hospitals, public transportation systems, community halls, quiet centres, theatres, concert halls, museums and libraries, green spaces, parks and gardens.
“The critical distinction is to invest in assets that maximise our potential to flourish with the minimum level of material consumption, rather than in assets that maximise the throughput of material commodities — irrespective of their contribution to long-term prosperity.”
“Impact investing — the channelling of investment funds towards ethical, social and sustainable companies, technologies and processes — is an increasingly important element in the financial architecture.”
Examples would be credit unions, Triodos Bank, and sovereign money. Remembering that “the economy is not an end in itself but a means towards prosperity”, this does potentially mean an expansion of the government’s management of the economy, and a corresponding reduction in the role of banks:
“What’s at stake here is the nature of money itself as a vital social good. Money facilitates commercial exchange; it provides the basis for social investment; it has the power to stabilise or destabilise the economy. Handing the power of money creation over to commercial interests is a recipe for financial instability, social inequality and political impotence.”
Tim Jackson doesn’t underestimate the challenge, nor the fineness of the balance that we need to strike.
“Society is faced with a profound dilemma. To reject growth is to risk economic and social collapse. To pursue it relentlessly is to endanger the ecosystems on which we depend for long-term survival… The dilemma, once recognised, looms so dangerously over our future that we are desperate to believe in miracles. Technology will save us. Capitalism is good at technology. So let’s just keep the show on the road and hope for the best.”
Prosperity Without Growth is, ultimately, an optimistic book. Both courage and intellectual rigour are required to face up to the inevitable outcome of our current trajectory, and to examine the assumptions that lead us to remain wedded to our current model of never-ending growth, even when the relationship is doing us harm, and a divorce is long overdue.
After all, humans created the economy in order to make our lives better — more prosperous in the broadest sense of the word. But circumstances have changed dramatically over the centuries — there are now so many of us, living so materialistically, that the system has become a victim of its own success. It has outlived its ability to deliver on the promise of better lives. It is entirely within our power to redesign the economy in ways that get back to its original objectives, and yet somehow the economy has become the master, and we its slaves. It’s time to remember that money is just a story — as Yuval Noah Harari says:
“ Money is the probably the most successful story ever told. It has no objective value… but then you have these master storytellers: the big bankers, the finance ministers… and they come, and they tell a very convincing story.”
But we can opt out of that story, and put money back in its place. It is not impossible. As Jackson concludes:
“ Impossibilism is the enemy of social change. Time and again, throughout this book, we’ve seen these axiomatic truths dissolve under a more careful scrutiny. A post-growth macroeconomics is after all conceivable… People can flourish without endlessly accumulating more stuff. Another world is possible.”
More on this in an earlier blog post on my debate with my eco-modernist friend, known here as Socrates: Overconsumption — Must, or Madness?
Originally published at https://www.rozsavage.com on September 10, 2020.