Life After Growth – Economics For Everyone

The economy’s gotten bigger, but the inequality has as well. Most of the growth in income is placed in the top 10-20% of the world. If you’re lucky enough to be that 1 in 10, or 1 in 5 people (by the way, cancer if more common now that being in that group), you might buy into the idea that economics growth is good, sustainable, and right. But think about the other four people in the room?

Growth has taken the place of our religions, our morals, and most of our society’s decisions – they are now framed by, simply, “is the price the right price.” Well, is it? We should be ensuring our economy is about “maintaining and renewing life on Earth, human life and all other life.” (Vandana Shiva)

This short film is a great synopsis of the arguments against growth. Life Without Growth – Economics For Everyone asks “what’s wrong with this picture?” and then goes further, asking “This degrowth idea might be an answer, but I don’t understand what it will look like in reality, what does it mean for me?”And it answers:

“It looks like a lot of things, that are happening right now: Voluntary Simplicity,” for one. Giving up your pursuit of more things, a bigger house, greater pay for a pursuit of less work, more fun, simple, non-complicated life.

“That sounds a bit extreme to me, are people doing this on a community level?” Yea, Transition Towns, for instance.

“Yea, but even if this is happening at a local level, the banks, the corporations and the governments – they’ll never buy it” Sure, in most cases, right now, but we can change that. And a lot of groovy things are going forward in some governments already: recognition of ecosystem services, adoption of well being metrics, et cetera.

“So, where do we go from here?” Work less, consume less, live more. Life after growth.
“Everywhere people are engaging in degrowth type activity – the beginning of a wave that is laying the groundwork for a post-capitalist future…

Because it’s not the size of the economy that counts, its how you use it!”

Life After Growth – Economics for Everyone from enmedia productions on Vimeo.

The Limits of Efficiency

A few months ago I wrote about the myth of decoupling – how you cannot separate economic growth from environmental impact. I touched on a topic in that post that is critical to the argument against continued economic growth: the limits of efficiency and the physical constraints of thermodynamics on the economy. That post received a lot of good feedback, as well as a few requests to talk about efficiency limits in more detail.

Neoclassical Arguments Defy Natural Laws

Gravity is a basic law of our existence. To hear someone claim that gravity is a myth would be astounding. A large group of people believing such a claim would be even more ridiculous (sounds like climate change deniers, actually). Yet, anyone trumpeting infinite economic growth does just that: makes a claim that violates basic laws of nature.

You might be asking yourself how I can make such an accusation when we are obviously still growing as an economy. Well, sure we are, but this is actually uneconomic growth, false growth, and debt-driven growth. All that debt is expanding while our natural resources do not – which spells C-O-L-L-A-P-S-E, if you’re curious.

The most common argument for economic growth continuing indefinitely without undermining the environment is “technological progress.” This really means technological efficiency, or our ability to do more with less and less. Neoclassical economists, policy makers, politicians, and even the average citizen today all believe technology will save us in the end. The thought is that we’ll move to an “information economy” or to a “space economy” and produce growth by using less resources.

The basic claim is we will continue to make leaps in technological progress that will maintain economic growth at the same level of ecological impact (resource use, waste, etc). We can make more today with less material per unit and less energy per unit than we could two decades ago. However, as a pointed out in my earlier post, this relative decoupling is weak in comparison to the growth of the economy as a whole. That is besides the point. The matter at hand is efficiency.

We can get better and better at production only to a certain point. Efficiency cannot improve infinitely, therefore the economy cannot rely on it for infinite growth. Period.

Continue reading “The Limits of Efficiency”

Beyond Growth: Getting Beyond The Growth Paradox

I don’t know if you’ve had a chance to check this resource out yet, but Jeremy Williams, blogger of Make Wealth History, put together a wonderful guide to understanding the problems with continued economic growth in the developed nations called Beyond Growth. It opens up to a walk through of the problems with growth, solutions to the issues and the first steps towards a sustainable economy.

In addition to the well laid out explanation of the issues Jeremy has a News section – a blog build up off of Make Wealth History’s re-occurring “Growth Report.” This recent article caught my eye especially:

Just how strong is the link between economic growth and human development?

Not very strong, according to a new report from the UNDP which suggests that investment in education, health, and role of women in society are far more important.

Economists George Gray Molina and Mark Purser sifted through 35 years of data from 111 countries in reaching their conclusions, and concluded that human development and economic growth are not necessarily correlated. “The most rapid improvements in life expectancy and literacy are not occurring in the fastest growing economies of the world” says the Times of India, reporting on the forthcoming report. “They are occurring in a subset of lower and middle-income countries in Asia, the Middle East and northern Africa. China and the Republic of Korea are in fact the only two countries which appear both among the top ten income and HDI performers.”

Thanks for the tip, through Treehugger, and I’ll be looking out for the paper, entitled Human Development Trends Since 1970: A Social Convergence Story, when it comes out.

Be sure to check out more of Jeremy’s work at Make Wealth History and Beyond Growth, one of the many thinkers out there campaigning for a sustainable world and a sustainable economy.

100 Posts & Beyond

This post marks 100 posts on this blog, spanning one-and-a-half years of exploration into the steady state economy and ecological economics. I have been working steadily on a few drafts (I always have drafts, it seems) that I wanted to use for this post. However, I think this is a good opportunity for feedback from you!

It is my goal to keep up the quality of content and a steady frequency of posts to provide you, my readers, with relevant information about the concepts, news, and campaigns behind creating a more sustainable society. I have received more feedback lately via email and the blog is gaining momentum in terms of subscribers. As such, I want to utilize this moment for feedback from you!

Please, take a quick minute or two and fill out this 8 question reader survey. It is short, hopefully poignant, and will help me connect on a deeper level with my trusted readership. I take time out of ever day to work on this blog to help further dialog on this topic and keep you in the loop – it will go a long way to help me do that well if you take a minute or two to fill out this survey. Results to be posted soon! Thank you, everyone, for your support and readership!

Click Here to Fill Out Reader Survey

Also, if you are not already, become a subscriber! (It’s free! I run this blog with my own time & money)

If you like this blog and want to see more in this realm check out my other project, Post Growth, a collaborative exploration of a post growth society with a few other steady state bloggers!

Points of Progress

This semi-regular report includes things happening in our world, policies, articles and practices in-line with the steady state economy or transitioning to it, that are worth some time to read about –  the good news, the promising results. They are all exciting things happening I just don’t have time to post about each in-depth.

Here are some cool things happening in the world:

The 3/50 Project: Uniting Small Business With Local Citizen Action

In an effort to support local businesses and local economies and new campaign called the 3/50 Project asks you to pick your 3 favorite local businesses and donate $50 a month to each. From there website, “If have the employed population spent $50 in a locally owned business, it would generate more than $42.6 billion in revenue…. For every $100 spent in locally owned independent stores, $68 returns to the community.”

Even though the site’s founder is likely a growth-support, the concept is in-line with steady state economics: local economy is the core. If you want a more secure, just economy, starting local is the only way to go. Your money speaks louder than your words nowadays, so spend it wisely. It is simple campaigns like this one that inspire me to be hopeful, as the simple ones are usually more successful.

UK Post Bank Campaign

The campaign for a “post bank” in the UK isn’t exactly breaking news, but the progress and concept are noteworthy nonetheless. Just recently Ed Miliband, the British energy and climate secretary, put his support behind the post bank as well. To quote Miliband in the article, “It speaks to people’s sense of community – and frankly, banks have let down low-income consumers, and others as well. It is part of a new deal for the low paid around the banking industry.” (He isn’t the first to bank this idea, see here)

A post bank would be a public-owned bank run through the post office. It would be an readily available, community bank – allowing the people access to bank accounts without dealing with the fat-cat, big banks that dominate the landscape today. This institution would help small businesses, people of low incomes, and could restore public faith in the banking system (as well as create a banking system deserving of that trust).

Co-op profits surge as customers desert UK’s bigger banks

Right in line with the last bit, here is some news that points towards a more promising future: co-ops over big banks. Co-op groups reported a 38 percent increase in new accounts. Credit unions and co-ops internalize a lot of their risk, tend to lend more responsibly, and keep their profits in the community. In case you weren’t reading the above parts about how important the local economy and community really are, read my posts on the subject (“The New Economy Starts Here” & “Local Currency & Bartering“)

So, news that the co-ops are seeing a profit serge as UK citizens leave the bigger banks is a good trend for two reasons: (1) hopefully this is a sign we have learned not to trust in the big, greed banks that caused our most recent “Great Recession,” and (2) we’re pushing towards a steady state economy with action – which speaks louder than, well, words.

Obama Announces Degrowth, Wins Republican Support

President Obama Speaks On Health Care In Portland, Maine
"We Must Forge A Sustainable Nation For All"

In a surprising turn of events, President Barack Obama announced in a press conference today that economic growth could no longer continue as we know it. As a prominent New York magazine quoted, “the press room went silent and after a tension-filled moment, erupted in applause!”

As numerous environmental groups, ecological economists, and people with common sense have been trying for decades to gain political ground on the issue, a left-field bipartisan bill was drafted late last night and rushed through both the House and Senate. News of the conflict between growing the economy and maintaining an environment that can sustain human life was a shock to many in congress. However, conscience and prudence won the day, prompting late-night legislative sessions.

Tomorrow President Obama will sign into law the American Development and Reorientation Act, a comprehensive bill that will overhaul the financial sector, incorporate well-being into national accounts, end fossil fuel subsidies, tax pollution, cap greenhouse gas emissions, remove rights of person-hood from corporations, and provide minimum incomes and cap gaps in wealth – all to provide a more stable and just economic system that focuses on developing our society instead of expanding the size of our economy.

As the President said during the conference,

“By recommitting ourselves to the founding ideals of this great nation, focusing on our possibilities and liberating ourselves from failed ideas and institutions, together we can create a stronger, better nation that secures a fulfilling life for every person and honors the premise of the Declaration of Independence that every individual is endowed with an unalienable right to life, liberty and the pursuit of happiness.”

This amazing turn-about in public policy not only represents the needs of the America people, but ensures a long, prosperous future for our society on this planet. This will go down in history as the first major (gigantic) step towards a sustainable world for all! Well done, Mr President!

**Happy April 1st everyone!**