The Limits of Earth

Debates over limits is not new. From Parson Malthus to Donella and Dennis Meadows to Herman Daly and, most recently, Tim Jackson, Juliet Schor, Peter Victor and many others – economists, policy-makers, ecologists, and biologists have all debated the limits we face and where they are encroach on society (or rather, where society encroaches on them). Economists from the very creation of the social science to recent shapers of the field have recognized the limits to a growth economy.

In the 19th century John Stuart Mill, a political economist who believed in free markets and utilitarianism, expounded the idea of a ‘stationary state,’ or a steady state, economy, one which remained stable without expanding in size. In Mills stationary state vision our economy would maintain a constant population and stocks of capital. He envisioned an enlightened state where “there would be as much scope as ever for all kinds of mental culture, and moral and social progress; as much room for improving the Art of Living and much more likelihood of its being improved, when minds cease to be engrossed by the art of getting on.”

John Maynard Keynes, the grandfather of current economic thought, even acknowledged that growth was a means to an end. Keynes referred to the dilemma of growth as “the economic problem” that someday will “take the back seat where it belongs, and the arena of the heart and the head will be occupied or reoccupied, by our real problems – the problems of life and of human relations, of creation and behavior and religion.”

Where does that leave us today? In a world seemingly full of ecological limits playing out in numerous arenas – peak oil, water scarcity, climate change, dwindling resources – how do we find that stationary state equitably? Do any of these limits play out in our favor?

Read More –>

Growth Debate Goes Down Under

Australian media is taking a bit of a shine to the debate around economic growth. A recent article in the Sydney Morning Herald explores the emergence of the steady state economy in political debate. And the Aussie magazine New Internationalist is featuring an issue about “Life Beyond Growth.” I have to admit that my familiarity with Australian publications is, well, non-existent. Near as I can tell, New Internationalist is a Aussie version of Yes! Magazine and Mother Jones.

The one article available online from New Internationalist is titled, “Nature’s Bottom Line,” and outlines the conflict between continued economic growth on a finite planet. Here’s a bit:

“Free market cheerleaders believe that technology and human ingenuity will solve the problem. The economy can be ‘de-coupled’ from material inputs. Improved technology will allow us to produce more wealth with less energy, materials and waste. This is whistling in the dark. Between 1970 and 2000, rich countries saw impressive gains in energy efficiency of up to 40 per cent. But average improvements of two per cent a year were eclipsed by growth rates of three per cent or more.

Increased technical efficiency is swamped by increased consumption. A recent report by the New Economics Foundation found that to stabilize carbon emissions at 350 ppm by 2050 the carbon intensity (CO2 per unit of production) of the global economy would need to fall by 95 per cent. Ramping up GDP without improving technological efficiency leads to more environmental damage. Yet improving efficiency triggers more growth, which leads to the same result.”

And this is my favorite part at the end:

“The economy is a human construct. It’s not an act of god. We made it, we can change it. The rest of this issue examines the growth dilemma and highlights the alternatives.”

You can get involved in furthering the knowledge about the limits to growth by signing the CASSE position, supporting this blog and, of course, joining the discussion! Spread the word, my friends, to every continent!

p.s. If anyone has an extra copy of this issue, I would love to get my hands on a copy! Their site doesn’t seem to have a single issue purchase option.

Kevin Drum with Mother Jones has a great blog. However, I was surprised to read a recent response to a no-growth article – Kevin is apparently a growther, not willing to accept the fallacy that is continued economic expansion on a finite planet. What Kevin might not realize is that increasing the size of the macro-economy on a planet that doesn’t grow, with resources that remain constant (actually, since we’re in overshoot, our resource base is steadily decreasing), means increasing scarcity, not wealth.

There are, as with many of his posts, tons of comments. I have made a few and I invite you to comment there as well. Here are the first two of mine:

Kevin,

I’m seriously disappointed in you. I mean, truly disappointed on a massive scale. Of all people, I figured you would see the truth behind this argument and the ridiculousness of the idea you can continue economic expansion on a finite planet equitably.

You seemingly failed to do any other research around it and jumped to the conclusion (falsely) that a non-growth centered economy wouldn’t work or wouldn’t be pleasant. Actually, most of human history was a steady, non-growing economy and we did just fine. Why do we suddenly think the last hundred years is how the next thousand will go?

Read Tim Jackson’s Prosperity Without Growth. It’s a book, but also available as a shorter report or even as a summary if you really don’t have time. Or read Peter Victors book, mentioned in that article, where he actually shows how a future in a steady state economy is desirable over the continued expansion of the economy.

Basically we have two options:

(1) Focus on development (not expansion) of our society in a sustainable fashion, thus improving the lives of most of the population and actually confronting climate change, hunger, and poverty; or

(2) Keep betting on the horse that has been losing the game: growth. Meanwhile, as our economy expands and our biosphere REMAINS THE SAME SIZE, we will each of us have less and less – less water, less food, less fuel, less nature. Further growth = increased scarcity.

Growth has failed to increase our happiness (after a certain point of basic needs, further growth adds little or nothing to our happiness).

Growth has failed to end poverty: it has, in fact, increase it.

A non-growing economy would not be stagnant. A dynamic steady state economy is the result of focusing our energies on improving our society instead of making it bigger. We actually have a chance of accomplishing the things that the growth economy has failed at: eliminating poverty, improving equality, tackling climate change.

The last one is without a doubt, absolutely impossible in a growing economy – for the very same reason why we cannot improve our technology fast enough to make up for growth (also known as decoupling, which is a myth).

Lastly, we our ultimately bound by the physical laws of the universe – the laws of thermodynamics will eventually make any further improvement in efficiency, and therefore growth, impossible.

Please read up on this topic before you go spinning the dogma of growth. Economic growth is the largest threat to human society.

Cheers,
Joshua Nelson
steadystaterevolution.org

And, in response to a comment about decreasing work hours and increasing leisure time:

Actually, total work hours were decreasing steadily because of increasing productivity from the beginning of the industrial era until the 70s/80s. Then came the worse president in our nation’s history: Ronald Reagan. History will remember him as the president who eliminated publicly funded college, threw a bunch of mentally ill out on the street to fend for themselves and pioneered the vision of growth-at-all-costs, greed-focused economics.

What happened in that era was a reversal of that decreasing work hours trend. Prior to this shift increases in productivity would partially decrease work hours and partially increase production (grow the economy). Today, all productivity and efficiency increases go directly to expansion of the economy, because work hours remain the same (or increase), dumping it all into growth.

A good book on this topic is Juliet Schor’s Plenitude: The Economics of True Wealth, or you check out her lecture at a Seattle City Hall event.

We could eliminate our staggering unemployment by cutting back the average work week. We could do away with economic expansion by, in part, placing all productivity gains into producing the same amount in less time – working less, put still producing. This is where the more leisure time comes from: less work, similar pay.

They’ve partly been doing this in many European countries (where they continued on the path we gave up in the 70s/80s). The French work 35 hours a week and Germans have a flexible work week. Most Europeans also get around 8 weeks of vacation a year (not like our measly 2 weeks in the US) and in some countries (Sweden) there is 3 months of paid maternal and paternal leave after a birth.

Any wonder why these countries consistently rate higher on happiness and well-being metrics?

We should be focusing on prosperity and improving human well-being, not making more stuff and destroying our planet. The results are in on the economic expansion: it only works to a certain point, after which is actually undermines our happiness. Besides, why are people so opposed to working less and having more free time? I’d love to have more time with my son, focusing on my writing, reading, or actually getting to the gym. I find it so strange that there is an uproar against having more free time.

Perhaps the view of a better world is too must of a fright because it shows clearly the flaws of the current world?

Cheers,
Joshua Nelson
steadystaterevolution.org
postgrowth.org

Check out Kevin’s blog (outside of the growth post, generally a great blog) and comment here.

Banks should protect our money, not fleece us for their profit

Our money is loaned into existence and then must be paid back, plus interest. This interest can only come by earning (taking) money from other loans in the system, thereby installing inherit competition and scarcity in our society. Could you imagine a society in which we didn’t have to compete for a scarce amount of funds? How could this alter our communities or the way we treat each other?

An ethical banking system is one that upholds the value of the people who use it. Instead of a institution that values only profit, an ethical bank would value the people that support it. This really shouldn’t be too crazy of an idea, but our banks today do everything in their power to leverage greater profits. The recent economic crash being a prime example. We should support and create banks that support our societal and economic well being, not their CEO bonus checks.

The Reason We Need It

It seems like second nature to me that systems we create as a society should function with the ethics we value, but there is obvious room for improvement. When a lot of our organizations and industries started the room for growth seemed limitless, so it was much easier to gain advantage in the market and grow without sacrificing ethics. Like many things in this era, we’ve run out of that room and the only way to make a higher market share this year and next year is to start finding ethically gray (or black areas) for expansion (e.g. derivatives).

Paper exchanging for paper is now 20 times greater than exchanges of paper for real commodities. This distortion of value from real wealth to phantom wealth encourages a financially dependent system, driving up debt and down real value. Eventually those claims on wealth will be exchanged for actual wealth – even if there are no longer enough. An ethical banking system supports a more realistic approach to real wealth and the money that represents it – as well as environmental concerns with investment and social justice.

An Ethical Banking System is one that encourages stable and equal amounts of material wealth. If you haven’t clued into it yet, our current banking organizations do not function in an ethical way. Our banking system encourages debt, competition, scarcity, and unequal distributions of wealth. What if we created a bank in line with our values? One that supported the people, community, and real wealth?

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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.

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.

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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.