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.

Newsweek: The No-Growth Fantasy

Newsweek recently published an article titled, “The No-Growth Fantasy: Europe’s Attack on Capitalism.” Calling a no-growth economy a fantasy is a bit delusional, I think continued economic growth is the real fantasy here. I just commented on that article, my response is below – expanded past their comment section’s character limit.

“A large part of what was taken as growth was financed by unsustainable bubbles in credit and asset prices.” Most of our growth in the past 50 years has been nothing but bubbles: credit bubbles, housing bubbles, internet bubbles, property bubbles – even a Uranium bubble. We all hate when the bubble pops, why get back on the growth horse and expect different?

You discuss resource depletion as if it can be thinned down to last forever, while we continue to grow the economy (and therefore, the amount of resources needed). Efficiency is key, for sure. However, you can only get so efficient! If we could reach 100% efficiency we’d be able to use the same gallon of gasoline in our cars over and over again forever. Even if you don’t trust those pesky laws of thermodynamics, common sense should tell you this is pure nonsense.

And discussions of “barely tapped potential of genetic engineering and other plant-breeding technologies” envision a future of mutated plants, crowded cities, and soylent green. I don’t know about you, but I do not want to live in a world of genetically engineered food supplements, packed into a tight living space, simply because we didn’t want to think outside of economic growth. Besides, these technologies will have their limits as well, assuming we can make them viable in time, and then what? What’s the next thing we can latch onto in order to keep this hamster wheel spinning?

“Even if the critics are right and growth is going to be harder to attain post-crisis, that’s no reason to give up on it. Just the opposite: all the more reason to spend our energy coming up with the right policies—from education and innovation to entrepreneurship and competition—that will help foster it.” Right, pick something to keep the wheel going because you’re afraid to deal with the transition to a stable, just, sustainable economy? This is cowardice shrouded in a cloak of misplaced optimism.

Continue reading “Newsweek: The No-Growth Fantasy”

Growth Isn’t Possible

Growth Will Kill Us All, If The Hamster Doesn't Get Us First

The new economics foundation (nef) has released a report title Growth Isn’t Possible, which is available for free download (pdf here) or purchase in a bound copy. The low-down is simple: in order to maintain the international goal of avoiding an increase of 2°C in global temperatures from carbon emissions we must stop economic growth. Basically, economic growth will kill us if we don’t “change our economy to live within its environmental budget.”

nef figures that with a growth rate of only 3%, the global economics “carbon intensity” would need to decrease by 95% by 2050 from 2002 levels. This requires an average annual reduction of 6.5%, which is even optimistically impossible in the best of circumstances. All of the “magic bullets” in the public discourse: carbon capture, nuclear, geo-engineering, et cetera are “dangerous distractions from more human-scale solutions.”

Sure, our carbon intensity has nearly flatlined in the last few years, but we need to reverse this trend not flatten out or encourage growth. Technological efficiencies can help, but physical laws limit the amount of efficiency you can pump out of any system. Worse yet, we’ll never match growth in efficiency with even mild economic growth that our system has been designed to need. It’s simple mathematics, which neoclassical economists have never been good at in the first place.

A broader support for community-scale projects like decentralized energy systems are needed over the pipe dreams currently getting all the political attention and funding. nef’s research shows that in order to prevent runaway climate change we need to change. An economy that took into account environmental thresholds will be more likely able to not only avoid runaway climate change but provide improved human well-being in the future.

Continue reading “Growth Isn’t Possible”

Growing the Growth Debate

In an certain ironic sense the “growth” of the growth debate is a bit of an oxymoron, but then again so is “jumbo shrimp.” I am a believer in humanity’s common sense and ability to make progress, even in the face of our own evils and stupidity. It sure seems to me that one could become down-trodden by news of all the degradation of our planet, social bonds, communities, humanity, and equality that result from endless pursuit of material wealth. Yet, it is to our own credit that we realize the err of our ways and make attempts to fix these problems.

There has been an increase in the number of post-growth-ers, de-growth-ers, steady-staters, and general questioning of economic growth in the last year. This might be partially fueled by the global economic recession and the increasing alarm of climate change. I also think it is beginning to fuel itself: our activities to raise awareness are spreading the seeds and we’re starting to see those seeds blossom. This is the early Spring of the Big Growth Debate. I hope to see 2010 as the year we changed the economic discussion on a mainstream level.

I am heading to DC next Tuesday to attend the New Green Economy Conference, where I will be volunteering and helping out, as well as joining in on some great seminars, breakout sessions, and symposia. I will, of course, be blogging while there, keeping you all in the loop of the fun and games.

While I partake in the furthering the growth debate, I hope you’ll take some time to further your knowledge as well! Here are a few resources for you to check out:

  • Economists start to consider that money can’t buy happiness – a recent article by the Guardian about our metrics of prosperity, alternatives to GDP are becoming a bigger topic nowadays
  • Beyond Growth – a new project put together by Jeremy Williams of the blog Make Wealth History
  • Post Growth – a new project I am working on with some fellow steady staters, still in-process, but getting closer to an official launch.
  • Make Wealth History – Jeremy, as mentioned above, is the blogger behind this work – great stuff on sustainability, related news, book reviews, and sustainable economies.
  • cruxcatalyst – Sharon is the other blogger I am working with on the Post Growth project, her blog is her place to show off and stash great articles and the occasional piece of her own work.

New CASSE Site

Also, just a note – if you haven’t seen it yet, the Center for the Advancement of the Steady State Economy has a brand new website design – check it out! They’re still triple checking the site for bugs, but it looks amazing!

Growthbusters: Hooked on Growth

Dave Gardner, film producer/director/writer, is in the process of completing would could be a monumentally important film in exposing the fallacy of “growth everlasting.” Armed with a camera and donations from regular folks, Dave has traveled the world questioning our growth addiction. He started in his home town of Colorado Springs and has now taken the filming to the national and global arena.

Hooked On Growth: Our Misguided Quest For Prosperity” is still in production and could use your help to finish off the process, please take a moment to make a tax-deductible donation to help fund the film’s release. Here’s a quick blurb from the site about the movie:

“Why is it more important to our society to have GDP growth than clean air? And why do communities seek andsubsidize growth even when it destroys quality of life andincreases taxes?

Our growth-centric system is broken. It’s not providing the happiness or the prosperity we seek. But that’s good news; it means a shift to a sustainable model will not require great sacrifice or pain. A transformation will allow us to be happier and more prosperous…

From Las Vegas to Atlanta, Mexico City to Mumbai, the White House to the Vatican, Hooked on Growthtakes us on a whirlwind tour of growth mania. It’s Wild Kingdom with a twist: the cameras are turned onhumanity as our own survival skills are examined. Hooked on Growth looks into the psychology of denial and crowd behavior. It explores our obsession with community growth and economic growth, and our reluctance to address overpopulation issues head-on. This documentary holds up a mirror, encouraging us to examine the beliefs and behaviors we must leave behind – and the values we need to embrace – in order that our children can survive and thrive.”

View the Trailer here (also below) and join the cause!

The Money Fix

Debt-money creates competition and scarcity
Debt-money creates competition and scarcity

Money. We use it everyday yet our concept of it is limited. When we talk about money, we talk in terms of what it does, not what it is. Despite our ignorance of money it rules most of our lives. I recently finished a great documentary about money that I would like to share with you. “The Money Fix” goes into the detail of money and describes how our system creates money out of thin air, embeds each of us with a “scarcity complex” and incites competition instead of cooperation.

I described in a previous post how money is created by banks out of thin air. We exist in a debt-money system, using bank account ledgers more often than paper money. The way I had previously explained the concept of money creation the banks create money out of thin air through interest on debt. “The Money Fix” describes this differently. The money of the loan is created – all of it, be it $500 or $5 million – while the interest is “earned” money. When the loan is paid back the created money is canceled by the payment on the principle. But where does the interest come from? More debt.

Continue reading “The Money Fix”