Almost all politicians, bureaucrats, journalists, ordinary people, and especially economists assume without question that economic growth is not just good, but essential. In this society economic growth is the supreme goal. Nothing is anywhere near as important as raising material “living standards” and the GDP. If growth in production and consumption falters firms go bankrupt, unemployment rises, etc. Output must increase by at least 3% p.a. all the time if the economy is to be “healthy”.
Yet over the last 50 years a vast literature has accumulated pointing out that the pursuit of economic growth is ecologically utterly absurd, indeed suicidal. The reasoning here is painfully obvious, but there is almost universal refusal to think about the issue, let alone take it seriously.
The planet is now racing into a many massive problems, and some of these could bring about the collapse of civilization before long. The most serious are the destruction of the environment, the deprivation of the most Third World people accelerating resource depletion, conflict and war over access to resources and markets, and the breakdown of social cohesion. The main cause of all these problems is over-production and over-consumption. The levels are far too high to be sustained or for all to share. Our society is grossly unsustainable – the levels of consumption, resource use and ecological impact we have in rich countries. Yet almost everyone’s supreme goal is to increase material living standards and the GDP and production and consumption, investment, trade, etc., as fast as possible and without any limit in sight. There is no element in our suicidal condition that is more important than this mindless obsession with accelerating the main factor causing the condition.
It is crucial to understand how far we have gone beyond sustainable levels. For instance,
The situation is well summarised by the World Wildlife Fund’s "Footprint" measure. (WWF, 2016.) It indicates that it takes about 7 ha of productive land to provide water, energy, settlement area and food for one person living in Australia. So if 9 billion people were to live as we do about 72 billion ha of productive land would be needed. But that is about 10 times all the available productive land on the planet.
These kinds of figures are due to the amount of production and consumption going on. They make it abundantly clear that rich world material “living standards” are grossly unsustainable. Many scientists, reports, and conferences have shown that we are living in ways that it is impossible for all to share and cannot be kept up for long. But most people have little idea about the magnitude of the overshoot; we need to greatly reduce per capita rates of resource and energy consumption, possibly by 90%.
“But why analyse in terms of everyone living as we do?” Because that’s what they want to do, and its what mainstream politicians and economists believe is possible and desirable. So you had better think about what will happen if 10 billion go on aspiring to be as rich as we will be given GDP growth.
Now add the absurd implications of growth.
The above figures refer to the present situation, but that does not define the problem we face -– the problem is, what will the situation be in future given the determination to increase production and consumption all the time and without limit?
At least 3% p.a. economic growth is demanded and usually achieved in this society. If we have a 3% p.a. increase in output, then by 2050 the world will be producing 3 times as much every year as it does now. If by then all 10 billion people expected had risen to the material living standards Australians would have then, the total world economic output would be 20 times as great as it is today! Yet the present level is unsustainable.
“Don’t worry, because technical advance will make it all possible.”
We come now to the crucial assumption most people make, i.e., that there is no need to even think about questioning growth, let alone reducing consumption or economic output, let alone cutting GDP by a factor of 5 to 10, because technical advance will solve the associated problems. This is the “technical-fix” claim, made especially by the “Eco-modernists.” For a detailed critique see Trainer, 2016.)
But is easily shown that the overshoot is far too great for any plausible technical advances to be able to reduce the problems to tolerable proportions. Let’s just assume that we have to reduce our per capita footprint by only 50% by 2050, rather than the approximately 90% the Footprint measure indicates. And again let’s assume that in 2050 we have a world in which GDP is twenty times the present amount. That would mean ecological impacts and resource demands per dollar of GDP would have to be reduced to 2.5% of their present amounts.
There is no good reason to believe anything like that could be done. The main criticism is to do with the “de-coupling” claim i.e., that economic growth can be separated from resource etc. demand, enabling production and consumption to increase while impacts are reduced. Many studies of this have found that despite decades of constant technical advance and effort to improve efficiency and productivity and thus to reduce impacts and demands, growth of GDP continues to be accompanied by growth of impacts and demands. (Trainer, 2016.) Thus it is predicted that global materials demand will more or less double by 2050.
The wider context: The “growth and trickle down” myth.
The gross unsustainability of consumer-capitalist society is only the first of two crushing arguments against its acceptability. The other is to do with the extreme and brutal injustice built into the global economy, and without which we in rich countries could not have such high material living standards.
The global economy delivers most of the world’s resource wealth, such as oil, to the rich countries. Why – how? Simply because it is a market system and in a market most scarce and valuable things go to the rich – because they can pay as much as the rich can for resources and goods.
The same principle ensures that the development taking place in the Third World is little more than development of the things that will enrich the corporations from the rich countries and the people who shop in rich world supermarkets.
The global economy totally ignores the needs and the rights of people and ecosystems. It allows, guarantees that 850 million people go without sufficient food while 600 million tonnes of grain are fed to animals in rich countries every year and most of the best land in many hungry countries is put into export crops. Conventional development, i.e., development determined by market forces and profit, is therefore clearly a form of plunder – it puts the productive capacity of the Third World into enriching us not them.
Conventional “growth and trickle down” economists insist that if we all enthusiastically pursue growth within the market place then this will be the best way to raise the Third World to satisfactory living standards. What a delight for the very rich! “No need to think about redistributing existing wealth, or producing what’s needed rather than what’s profitable…just produce whatever most enriches the already rich and wealth will trickle down to enrich all.” This is to say we should be content with an approach to development which delivers almost all of the Third World’s produced wealth to us in rich countries while a tiny fraction of it benefits Third World people.
The greatest blind spot in conventional development theory and practice is that its goal is utterly impossible, because of the limits to growth. There is no possibility of the Third World developing to be like the rich countries or to have rich world “living standards”; there are nowhere near enough resources for that.
“But look at China!” It is easy to find places in the global economy where some people are winning spectacularly, and where significant benefits are going to poorer people. However the booming export markets the Chinese now enjoy have been taken from many in poor countries who once had them but now can’t earn from exporting the things they used to sell. And it is easy to overlook the fact that possibly 800 million Chinese are not sharing in the new wealth. (Hutton, 2007.) Ask 500 million in Africa, or people in Haiti and Tuvalu about the miracles of growth and trickle down as the best way to improve things. Many of them are experiencing declining GDP per capita. (…which of course just means they need to work harder, lower their export prices, log more forest…) Very little ever trickles down to the poorest, and globalisation has increased the rate at which the resources of the very poorest are made accessible to, that is transferred to, the world’s rich. (For extensive documentation see Note 2.)
The rich countries go to a lot of trouble to keep the unjust global economy in place. They use aid, support for nasty Third World regimes, World Bank Structural Adjustment Packages, and provision of arms, and they resort to military invasion, in order to maintain the governments and systems that ensure that our corporations and shoppers continue to get most of the world’s resource wealth and to take most of the markets. The rich countries deliberately prevent appropriate development, i.e., the application of the Third World’s productive capacity, its labour, land, skills and capital, to developing the simple things that would do most to increase the welfare of its people. The conditions written into the World Bank’s Structural Adjustment Packages explicitly rule this out and decree that productive capacity must be free for market forces to determine what it will be put to. This means corporations are free to access resources and use them in whatever ways will maximise their global profits.
Our high material “living standards” in rich countries could not continue to be provided unless these appallingly unjust systems and processes remain. We could not live anywhere near as well as we do if we were not getting most of the available tin, coffee, oil etc.
The Third World’s people cannot have satisfactory conditions and appropriate development until the rich countries agree to take less and to live on something like their fair share of world resources. Yet what is the top priority within the rich countries? It is to get richer, to consume more, all the time and without limit.
Thus, we inevitably have all the major global problems.
This “limits to growth” analysis is crucial in understanding the nature of the environmental problem, the Third World problem, resource depletion and the problem of armed conflict in the world. All these problems are directly and primarily due to the fact that there is far too much producing and consuming going on.
For instance, we have an environment problem because far too many resources are being drawn out of nature and far too many wastes dumped back in, at rates technical advance cannot cut to sustainable levels. We have an impoverished and underdeveloped Third World because people in rich countries insist on taking most of the resources, including those in the Third World that should be being used by Third World people to meet their own needs. It is totally impossible for the Third World to develop to anything like rich world ways, yet that is the unquestioned goal in almost all development literature, practice and agencies! And how likely is it that we will ever have peace in the world if resources are very scarce and all cannot have them at the rate a few do now, yet all insist on getting richer and richer all the time without limit? If you insist on remaining affluent then you should arm yourselves heavily, you will need arms if you want to continue to take far more than your fair share.
The ultimate paradox is that for decades it has been clear in the research literature that increasing the GDP of rich countries does not increase the quality of life. (Eckersley, 1997, Alexander, 2012.) In fact we are now probably seeing a falling quality of life in the richest countries. What then is the point of striving for economic growth? Enabling the pursuit of more and more production for sale is actually damaging social cohesion and the quality of life now;
“But we will be so rich we will be able to afford to save the environment”
This statement reveals the kind of thinking the conventional economic mind typically comes up with…just create more monetary wealth and we can solve all problems with it. The fatal mistake in this argument is transparent. If you don’t reduce “wealth” production dramatically and quickly the resource and environmental consequences will soon eliminate your capacity to produce any wealth at all!
Conclusion; The system is not viable and it cannot be fixed.
This general “limits to growth” analysis shows that we are racing down a fundamentally mistaken path towards catastrophic breakdown. For some 300 years the goals have focussed on increasing material wealth, but only in the last 50 years have the limits become evident.
The argument above is that we must not only shift to an economy that does not grow but one in which the amounts of producing, consuming, investment, trade and GDP is a small fraction of present amounts. (Remember the footprint measure; the Australian lifestyle is using ten times as much productive land per person as will be available in 2050.)
It is not possible to eliminate the growth commitment without scrapping and remaking most of the rest of the economy, and much of our individualistic-competitive-materialistic culture. The solution cannot be to take the present society and just remove the growth element. Almost the whole economic system must be largely scrapped and a radically different one built.
The basic conclusion The Simpler Way analysis arrives at is that the growth economy cannot be fixed; its major elements must be scrapped and replaced. You cannot reform a growth economy to be a zero-growth economy; you have to build a completely different economy.
What is the alternative?
If we must abandon growth and greatly reduce production and consumption then there is no alternative but to develop an economy which is mostly made up of small, local and self-governing economies which are under the control of local people, i.e., in which they discuss, decide, plan and organise to produce that stable quantity of the basic things we need to enable a high quality of life for all. (There could also be a market economy dealing with a small volume of non-necessities, and most firms and farms could be privately owned.) This kind of economy is the only way to cut global resource consumption right down while guaranteeing good living conditions (and maintenance of socially desirable high tech.) (See TSW: Remaking…) Such economies can only work well if the control is in the hands of all citizens, via participatory-democracy exercised through whole town assemblies. (For the detail see TSW: The Alternative.)
Although the case against the wisdom of pursuing growth and affluence has been overwhelming for decades, it continues to be almost totally ignored. Most people, especially those in governments, do not want to think about any of this. They are all working furiously to increase the GCP … and thus hasten us towards catastrophic global breakdown. There is little reason to believe that this society has the wit or the will to face up to the fact that affluence and growth are not just impossibly absurd goals, but also suicidal goals
Alexander, S., (2012), Living Better On Less? Toward an Economics of Sufficiency, Simplicity Institute Report, 12c. SimplicityInstitute.org
Eckersley, R., 1997, Perspectives on Progress; Is Life Getting Better?, Canberra, CSIRO.
Hughes, D., (2016), “2016 tight oil reality check,” http://shalebubble.org/2016-tight-oil-reality-check/
Hutton, W., (2007), The Writing on the Wall: China and the West in the 21st Century, Little, Brown.
World Wildlife Fund, (2016), The Living Planet Report, World Wildlife Fund and London Zoological Society, tp://assets.panda.org/downloads/living_planet_report_2008.pdf
Trainer, T., (2016), “A critique of Leigh Phillips’ Ecomodernism”. Resilience, 4.2016.