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On a World without Growth
The following excerpts are from Herman Daly's interview with ecological economist Tom Green:
Growth is widely thought to be the panacea for all the major
economic ills of the modern world. Poverty? Just grow the economy
(increase the production of goods and services and spur consumer
spending) and watch wealth trickle down. Unemployment? Increase demand
for goods and services by lowering interest rates on loans and
stimulating investment, which leads to more jobs as well as growth.
Overpopulation? Just push economic growth and rely on the resulting
demographic transition to reduce birth rates, as it did in the
industrial nations during the 20th century. Environmental degradation?
Trust in the environmental Kuznets curve, an empirical relation
purporting to show that with ongoing growth in gross domestic product
(GDP), pollution at first increases but then reaches a maximum and
declines.
Relying on growth in this way might be fine if the global economy existed in a void, but it does not. Rather, the economy is a subsystem of the finite biosphere that supports it. When the economy's expansion encroaches too much on its surrounding ecosystem, we will begin to sacrifice natural capital (such as fish, minerals and fossil fuels) that is worth more than the manufactured capital (such as roads, factories and appliances) added by the growth. We will then have what I call uneconomic growth, producing "bads" faster than goods - making us poorer, not richer. Once we pass the optimal scale, growth becomes stupid in the short run and impossible to maintain in the long run. Evidence suggests that the US may have already entered the uneconomic growth phase.
Humankind must make the transition to a sustainable economy - one that takes heed of the inherent biophysical limits of the global ecosystem.
On What a World with Less Growth Might Look Like
Simply ask the question: What would the US look like if we had one-half of our current energy consumption? I think there are two ways to kind of get a handle on that. The first is to go back in US history to such a time when we did live off of one-half of the current levels of energy consumption. That would put us somewhere around 1960. And gee, life in 1960 wasn't bad. There were all sorts of good things - you were a long way from freezing in the dark, and life was quite good, materially good, and so forth.
Another way of thinking about it is to take the same year and look for another country with half the energy consumption per capita, like France, and life in France is pretty good. So society could cut energy consumption in half and, if it was done diligently, it wouldn't be a big deal in terms of how it would affect people's welfare. If we limit the scale of the economy, certainly there would be much higher energy costs, and so you just have to make adjustments now toward more efficiency. You would also have to address distribution or equity issues, but these examples show limiting scale doesn't mean well-being has to suffer. I believe it could improve.
It's also important to ask the parallel question. We've just looked at life in a steady-state economy, what does it look like in a continually growing economy? It wouldn't look like it looks today, over time it would be increasingly different. As we continue to grow, the remaining biosphere becomes more scarce - less air, fewer trees and fish, and more congestion and pollution.
What Students Can Do
As a student taking an economics course, when something doesn't seem right, raise questions about it. In a polite way, push the issue with the professor in class. For instance, students can ask, "Is it really defensible to base all of our theory on the notion that people are completely self-seeking atoms of utility maximization?"
Another thing students can build on is that economics does recognize a distinction between market versus public goods. Market goods are rival and excludable. My shirt is rival and excludable because it's my property and if I wear it, you can't wear it. Students can raise issues with how the whole set of goods that are non-rival are dealt with. Is the best way to deal with non-rival goods going around and making them more artificially excludable? Maybe they should be free? Where is the benefit from making knowledge artificially scarce? Many non-rival goods such as knowledge can be used sustainably in that we can all use a given piece of information as much as we want without using it up.
Certainly, much knowledge could be transferred freely to benefit the developing world. But instead, we see the opposite happening under free market ideology: "free trade" agreements include provisions on "trade related intellectual property rights" (TRIPS). This is not about free trade so much as it is an attempt to police us intellectual property rights worldwide by using the sanction of trade restriction.
- Posted in
52 Comments so far
Show AllThe general idea is interesting. What about the growth of populations in the world that also have extreme poverty? How best to address that?
Well, the first thing you do
is to stop destroying the environment
that gives them the subsistence they live on.
That might entail curbing growth that pollutes.
I'm not sure I was clear. The greatest growth in population of the world today largely comes from areas that are very poor. Articles about "reducing growth" never talk about reducing *that* growth. Those folks suffer the most.
You were clear.
And you didn't address my point.
And if you could read, you would have known that it is discussing economic growth, not population growth...
...instead you present straw men
to derail the thread.
"And if you could read, you would have known that it is discussing economic growth, not population growth..."
As if the overlap between the two were not *enormous*. Increased people represents increased labor and intellectual resources as well as increased liabilities for food, shelter, etc. C'mon, think.
"...instead you present straw men"
Yeah right. See above. The point is valid in a discussion about The Economy. Someone else maybe?
If you could read?
"Overpopulation? Just push economic growth and rely on the resulting demographic transition to reduce birth rates, as it did in the industrial nations during the 20th century."
"Derail the thread" "Straw Man"
Wanderer, Get Help for your abusive paranoia.
Jim: Don't you understand the author *dismissed* the idea that you quoted? He said nothing more about it directly. The question remains, how to best deal with population growth? The author *did not* address that, like I originally said.
"Wanderer, Get Help for your abusive paranoia."
And what abusive paranoia are you referring to, Jim Glover?
Because as far as I can see, you're one being abusive. Do you read your own posts before you hit the Post button? Whoosh - right over your head.
Astounding.
"Evidence suggests that the U.S. may have already entered the uneconomic growth phase."
MAY have already entered the uneconomic growth phase??? MAY have?????
jack newton,
Here's the answer to your question. The best way to reduce poverty and overpopulation is to EMPOWER WOMEN all around the world, through education and welfare.
It is proven that societies with more equality are the most successful.
So if goverments instead of transfering the treasury to corrupt banks -or spending it in sci-fi warfare weapons- spent it in microlending and free access to birth control (which by the way is far cheaper), things would certainly look better for the 50% of humanity that lives on less than $2 a day.
I agree it's an excellent idea. Imagine bringing to bear the hands and minds of millions of women in areas where they are now not utilized. That would require a big cultural shift though, but again it's a good idea.
Re ladybug July 31st, 2009 1:08 pm,
who advises "The best way to reduce poverty and overpopulation is to EMPOWER WOMEN all around the world, through education and welfare."
Absolutely correct and necessary for planetary survival.
And while we're doing that, we should be teaching the subtleties of the 2nd Law of Thermodynamics.
If the earth were a closed system, all processes would eventually arrive at entropy. But the earth is not a closed system, because it gets a continuous input of energy from the sun. So any economic theory grounded in the real world must take this into account.
What if (for example) we were to base a currency on the amount of solar energy falling on a hectare of healthy topsoil? Goodbye currency inflation. Mr. Bernanke, tear down that printing press!
Permaculture. It's what they're doing in France. And better public trans. Like Maglev trains. What are we waiting for?
Large families are a survival strategy in the underdeveloped world. They bring more hands into the income of the family and provide the only avenue of care for the parents in their old age. When there are better alternatives, when large families become a burden to survival, the population will decrease.
Large families are a winning strategy in evolution. Please do not create competitors for my children.
Digression alert:
i realize i am wandering from the original article... but i don't think evolution has a "strategy". Evolution just happens.
Evolution is not a consciousness, a person, a thing. Evolution is a process, a natural process. It does not strategize.
Use of words like "strategy" attributes intention to evolution and contributes to popular misunderstanding about what evolution is and how it works. i believe such ideas play to our desire to believe in a consciousness "behind" evolution - similar to our feelings that lead to beliefs in "intelligent design", "creation science", or "god".
Digression over...
The articles says we used half the current amount of energy in 1960. That is true and we had about half the population. So the per person usage was about the same no wonder the quality of life was about the same. population in 1960 179 million population in 2008 304 million.
But real GDP today is about *six* times greater than it was in 1960, not just double. That shows our use of energy towards creating gdp to be much more efficient, and it would also bereasonable to conclude a significantly better standard of living.
If you check energy use per unit of gdp for other countries, the "third world" is the least efficient, the US near the top along with some European countrys.
Actually, I think one of the reasons we keep growing our population is 'because we can'. If we incorporated slow-growth economic policies we would, like France, slow population growth as well.
I think in the US the growth is mainly from immigration, because the birth rate is quite low. Birth rates are even lower in many European countries, they have to imort people just to stay even.
Immigration is a price of empire.
Right, especially in Italy, France, and Germany. Big empire guys, those three.
It's a function of low birthrate. In a *real* empire you can just keep them all overseas.
Local birthrate is low in those countries; immigration is very high. All 3 are perfect examples.
Immigration rate is higher in the US?
Yup. Guess why.
"All 3 are perfect examples."
Oh yes, especially Italy. That Italian Empire thing we have going on now, oh yes, how could I have forgotten?
The past counts.
Right. So the past empires of the three nations in quetion, all three of which have been gone for decades and centuries in the case of France, neatly associate with the immigration in those countries today. Got it! Thanks!
The economic student should also ask the question by what financial mechanism is growth is driven? Until this monetary virus is addressed, growth will remain the dominant mantra.
The quantification of debt wrongfully applies the algebraic concept of exponential growth - compounding interest - upon money. The distinction between usury and interest is an arbitrary legal determination with no basis in mathematics. Nothing can grow forever at an ever-increasing rate. As time moves on, the emphasis of ever-increasing growth becomes omnipresent, is quantified and institutionalized in the societal structure, encouraging over consumption, over development, and excessive expectations, pushing economic stress to its upper limit of expansion, eventually inciting conflict and spawning War to insure growth.
Economic systems of capitalism, communism, socialism, imperialism, colonialism, totalitarianism, fascism, nazism, monarchism, corporatism, and all other centralist monetary-isms maintain the monopolized control of money, and hence the control of society itself, through their own brand of Legal Tender that embraces compounding iterest and excludes other forms of money from the Market.
"The economic student should also ask the question by what financial mechanism is growth is driven?"
What do you think the answer is? Or is it possible that there is confusion here between cause and effect, and that maybe the "real economy" is the driver of growth, and not a "financial mechanism"?
"Nothing can grow forever at an ever-increasing rate."
Agreed, energy and matter are limited, on the planet anyway. There is always the question though, how close are we to the limits.
"As time moves on, the emphasis of ever-increasing growth becomes omnipresent, "
So what if some may emphasize it, if it may not be necessary anyway?
"centralist monetary-isms maintain the monopolized control of money, and hence the control of society itself, through their own brand of Legal Tender that embraces compounding iterest and excludes other forms of money from the Market."
I think this ignores the adaptation of people to policies that they will not stand for. For there to be the "control" you mention, there needs to be cooperation by the masses. History shows they don't always do so.
To answer poverty by "growth" only makes sense where production is inadequate, and usually leaves greater problems unaddressed even then.
Likewise, population control is central, but leaves key problems unaddressed - critical problems, if none of us volunteers to leave.
Post-industrials may feel their cars merit preservation more than people's children, but not everyone finds the attitude or its justification self-explanatory.
The latest financial fiasco is weeding out the rich countries from the poor very fast.
In terms of growth, Japan currently has almost 10% going--and Mexico has 10% going, BUT IN NEGATIVE NUMBERS.
So much for hitching your star to a gringo's ass.
"So much for hitching your star to a gringo's ass."
Gringo's ass is 25% of the world economy. They can't ignore it. If you can think of a country that does and still does well I'd be interested in knowing who that is.
Starting around the age of 15 or so, human growth is no longer measured in height but in maturity. Yes I'd like to see our economy grow, in maturity.
"Yes I'd like to see our economy grow, in maturity."
Sounds interesting. Can you expand on what you mean?
Instead of constantly producing more and more, or, in the USA case, consuming more and more while producing very little, perhaps we need to actually need what we use.
We need jobs because humans need to do work to feel healthy, not because we need to imprison people in stressful little boxes for 40 years. For that matter, we don't need a drug economy which puts millions of guys in the state zoo for 40 years. The drug economy is a failed economy.
We need time to raise kids, and money to feed them. Everyone should at least have an honest chance to hold a job. For that matter, everyone should have an honest chance to become an entrepreneur or an inventor. If we had more inventors maybe we wouldn't have an energy crisis or climate change. Another question for inventors, why can't the robots do the dangerous jobs and we'll all raise the kids.
We need a more democratic economy where a corporate honcho isn't paid a $100m bonus to run a company into the ground. We need cars that don't need to stop at a gas station, transit that competes aggressively with cars in the suburbs, and better looking urbs in the first place.
We need elections that we can trust. We don't need a bought Congress or a bought state legislature. What a sick part of the national economy!
We need companies that don't rob workers, don't cheat consumers, don't skip out on their home communities like a deadbeat dad. We need third party verification of a company's continuing honesty to all of its various stakeholders.
"The pursuit of happiness" referred to social happiness. A socially happy economy is a great economy. A breadline economy is a sick economy, and an economy where even the bread is running short is a morbid economy.
I think then you would equate a simpler life with maturity. I agree, and it would be good perhaps to evangelize on that. I don't think I'd be on my deathbed looking back and wishing I had more stuff or greater complexities.
Jake, the best explanation I've read concerning your many comments are from "the man" Bucky Fuller. Read 'Critical Path'. In it he addresses the dichotomy between population growth and natural resource growth. Einstein proved that energy and matter cannot be destroyed. We live in an ecosystem/universe that is eternally regenerative. Since human beings are a natural evolutionary result of this Universe (in other words, we 'belong' on Spaceship Earth) it follows that we have all the tools we need to survive on our spinning orb in spite of an exponentially increasing population.
The trick is to change the meme. We have all of the technology available to create a level of comfort for ALL people on this planet right now (and we've had it since 1980 when B.Fuller wrote this book). It is the money/power elites that say 'no'. They control the levers behind the curtain that instill the dead-end notion of 'I better get mine before it's all gone' - which is a FALSE choice.
What economists fail to include in their 'arithmetic' are the ideas of acceleration, ephemeralization and precession. A most interesting metaphor is the 'race to the moon'. When NASA undertook the planning there were about 2 million steps that needed to be accomplished of which, in the early 1960s, only about 1 million were 'known' at the time. In other words, the technology DID NOT YET EXIST for half of the steps needed to put a man on the moon. Again, because economists don't work ephemeralization into their equations (more-with-less-ism) they don't see the big picture. Instead they continue the big LIE that with unimpeded growth, all will eventually just trickle down, raising all 'boats'. Through design and technology (much of which already exists) we can all live a much more balanced, efficient life.
It is the paradigm that needs to be shifted.
Thanks, I am familiar with Fuller but haven't read much.
When I took the basics of finance and accounting in college, I was presented with haphazard ideas of growth being defined as pumping out the volumes and paying no attention to quality. The first thing that we must do is redefine growth in terms of quality rather than quantity. From there, the road to correcting this growth problem can be achieved.
BRAVO!
Quality. Something lacking in this modern world. Bring it back.
I agree with this idea and would love to see it come to pass, but who is to do the bringing back? Back from where? Do we have to bring it back or can we come up with a "come hither" look to make it want to come back?
I don't know. My brain mass produces questions but very few feasible answers.
I think, if we don't royally fuck up the biosphere we so depend on for our very survival, which at the present trend looks inevitable, then in a post modern world, we may bring quality back. But, I don't think it will be like anything like the quality we had in the past.
I don't think we'll be bringing back the gaudiness of the 18th and 19th century architecture with carvings of gargoyles and marble steps and other forms of non-functional ornateness. I doubt we'll see that kind of attention to detail intended to impress the visitor, except for in places like Dubai where money flows like water.
What I think we'll see is a new kind of quality. Our attention will be given to life affirming and life promoting beauty. Our attention will be given to repairing the damage done during the industrial revolution, to bringing back our forests, restore our atmosphere and purify our water cycle.
We'll voluntarily produce smaller families and bring our numbers back down to a sustainable level, say 2 billion to half a billion. We'll green our cities and villages, and we'll reforest unused farmland, creating new nature reserves. Soften the straight lines and heal the scars on the landscapes. Nature will do most of this on her own, but we'll be motivated to help undo the damage our forebears have done.
I believe future generations will be involved in this restorative work and do everything possible to restore the natural systems, and learn how to live in harmony with nature, and bring back the balance. Quality and balance go hand in hand. Balance is the new quality.
That's my vision of the future. That's the path I'm on. And I'm not alone. We are the new pioneers. And our numbers are growing, especially among the young who are still enthusiastic and idealistic enough to not be paranoid pessimists.
What other choice do we have? What's the alternative? The alternative is we turn this planet into a big hot smoking ball of embers. We can do better than that. We are homo sapiens. Wise humans.
We'll see.
Niall Ferguson has produced an excellent series for his book "The Ascent of Money" (PBS)
Not only does he describe the "shock doctrine" that hit Argentina in the 1980s, he also describes the route out of poverty in another shock victim - Peru.
Key points - Land reform and land ownership allows credit which is essential to growth. Hernando De Soto describes the process very ably in his excellent book on development in Latin America.
Access to credit leads to micro financing - Mohamed Eunis won a Nobel Prize for his continuing work in this area.
In his description of micro lending in Peru - Ferguson makes a major point that the majority of loans go to women and the primary engine of growth in Peru is through micro loans to once marginal women.
This growth continues in the face of the current global recession/depression since it is an organic process that does not depend on outside inputs - including tied aid from the World Bank.
Clinton and Gates would be well-advised to move in this direction - although the money may be hopelessly corrupt.
One of the major problems emerging in the developed world and the US is the erosion of ownership.
You cannot use your foreclosed home for collateral. Even if you are not in foreclosure - you have an asset that has less real value due to price corrections.
And - TARP enriched banks and companies are destroying small business and entrepreneurs - even GE Finance which provides credit for Lowes is starving small builders and suppliers.
Obama and wonderboy Sumners have it all backwards. They are practicing "trickle down" economics and ignoring the real engines of growth - here and abroad.
"the real engines of growth "
And what would that be? Thanks in advance.
The only real engines to growth can only be defined as moving towards sustainability.
I generally agree on sustainability. I was going to chime in on the organic foods article also posted today along those lines. I used to do a lot of organic gardening, it's all in containers on the balcony now.
Ever read The One Straw Revolution?
Um... i think ducksawce's answer is in the post you are replying to, starting where ducksawce writes "Key points"...
At the risk of censorship (and repeating myself) allow me to make the following commentary.
Old Coyote Knose... that the DOCTRINE OF PERPETUAL GROWTH of the human population and the global consumer economy on Planet Over-Birth Earth, an extremely fragile HOST ORGANISM of FINITE space and FINITE resources, cannot be sustained much longer. Perpetual growth in a closed looped system (the Earth) is NOT progress or prosperity. It is cancer! Full blown cancer... where parasitic agents kill the host.
See it! See it! Humankind (a.k.a.: ewe-man-unkind) will need to abandon outdated religious and political dogma (a.k..a.: dog-mess), and also the ethno/racist arrogance of tribe-all-eeego, and concentrate on survival (OR ELSE!).
OR ELSE!... means a major extinction event, probably within the next fifty earth years. Maybe much sooner. See it! See it!
So, in other words: Take a break! We're not the only ones here. It's the "Animal Planet", remember? WAKE UP, people!
Quit breeding, quit needing, quit greeding.
Derrick Jensen has spent more time and energy on this stuff than anyone I know. His book is called Endgame, and you can find plenty of his stuff on the internet, plus many videos on youtube.
He believes that industrial civilization as we know it "is not and can never be sustainable", and that the planet can be saved only if we take down civilization.
his arguments are compelling and as far as I can see, irrefutable.
what is sustainable? All indigenous people have had sustainable economies. this is why they survived for 500,000 years.
The people who lived on this continent in 1491, and for at least ten thousand years before that, had taken such good care of the planet that while they had no gdp, the natural environment was better each year than the year before.
1960 is nowhere near sustainable.
when Derrick asked a friend of his what would be a sustainable level of industry and technology, the guy said "stone age"
I urge everyone here to google him, find the premisses of Endgame, and see if you can really argue with him.