Prosperity without growth

27 10 2009

Have you ever heard of the Easterlin Paradox?  It is a theory developed in 1974, which goes something like this:  Money makes you happier until you reach about an average income.  After that, money’s affect on happiness is greatly reduced.  But there are those who argue that “happiness” is a very imprecise science, so maybe  Senator Bobby Kennedy (who might have known what he was talking about) might have gotten closer to the problem:  “Gross Domestic Product measures everything…except that which makes life worthwhile.”

The government of Bhutan has been following a policy of Gross National Happiness since 1972, and French President Nicolas Sarkozy recently announced that happiness levels would be taken into account when measuring the country’s economic performance.  Whether this happiness component is taken into consideration or not, there seems to be a paradigm shift from neoclassical to ecological economics now underway.  Is it possible that  there is a direct correlation between economics, ecology and happiness?

This new shift is  typified by Tim Jackson and his new book, Prosperity Without Growth, which is a completely revised and updated version of the Sustainable Development Commission report of the same name.  Tim Jackson is a Professor of Sustainable Development in the Centre for Environmental Strategy (CES) at the University of Surrey.  Since January 2003, Tim has been employed at CES under a research fellowship on the ‘social psychology’ of consumer behavior.   In the last twelve years he has pioneered the development of an ‘adjusted’ measure of economic growth – a ‘green GDP’ – for the UK. He is also an advisor to the UK government as a Commissioner on the Sustainable Development Commission and  is an Associate of the New Economics Foundation.  In other words, no lightweight.

Tim  wrote an article last summer which appeared in Adbusters  (and if you don’t know about Adbusters please check them out – they are working to change the “ way information flows, the way corporations wield power, and the way meaning is produced in our society”.  It’s entitled “Thinking the Unthinkable”,  based on Prosperity without Growth;  it explores the point at which economic growth becomes uneconomic growth.  The conclusions are disturbing.   Charles Siegel of The Sierra Club says it should be  required reading for everyone working to avoid ecological collapse (click here to read the review) . The article from Adbusters is reproduced below; the entire book will be available November 2 through Earthscan (www.earthscan.co.uk/pwg) or you can read the original report online at http://www.sd-commission.org.uk/publications.php?id=914:

prosperity-without-growth

Every society clings to a myth by which it lives. Ours is the myth of economic growth. For the last five decades the pursuit of growth has been the single most important policy goal across the world. The global economy is almost five times the size it was half a century ago. If it continues to grow at the same rate, the economy will be 80 times that size by the year 2100.

This extraordinary ramping up of global economic activity has no historical precedent. It’s totally at odds with our scientific knowledge of the finite resource base and the fragile ecology we depend on for survival. And it has already been accompanied by the degradation of an estimated 60% of the world’s ecosystems.

For the most part, we avoid the stark reality of these numbers. The default assumption is that – financial crises aside – growth will continue indefinitely. Not just for the poorest countries where a better quality of life is undeniably needed, but even for the richest nations where the cornucopia of material wealth adds little to happiness and is beginning to threaten the foundations of our well-being.

The reasons for this collective blindness are easy enough to find. The modern economy is structurally reliant on economic growth for its stability. When growth falters – as it has done recently – politicians panic. Businesses struggle to survive. People lose their jobs and sometimes their homes. A spiral of recession looms. Questioning growth is deemed to be the act of lunatics, idealists and revolutionaries.

But question it we must. The myth of growth has failed us. It has failed the two billion people who still live on less than $2 a day. It has failed the fragile ecological systems we depend on for survival. It has failed spectacularly, in its own terms, to provide economic stability and secure people’s livelihoods.

Today we find ourselves faced with the imminent end of the era of cheap oil; the prospect (beyond the recent bubble) of steadily rising commodity prices; the degradation of forests, lakes and soils; conflicts over land use, water quality and fishing rights; and the momentous challenge of stabilizing concentrations of carbon in the global atmosphere. And we face these tasks with an economy that is fundamentally broken, in desperate need of renewal.

In these circumstances, a return to business as usual is not an option. Prosperity for the few founded on ecological destruction and persistent social injustice is no foundation for a civilized society. Economic recovery is vital. Protecting people’s jobs – and creating new ones – is absolutely essential. But we also stand in urgent need of a renewed sense of shared prosperity. A commitment to fairness and flourishing in a finite world.

Delivering these goals may seem an unfamiliar or even incongruous task for policy in the modern age. The role of government has been framed so narrowly by material aims and hollowed out by a misguided vision of unbounded consumer freedoms. The concept of governance itself stands in urgent need of renewal.

But the current economic crisis presents us with a unique opportunity to invest in change. To sweep away the short-term thinking that has plagued society for decades. To replace it with policy capable of addressing the enormous challenge of delivering a lasting prosperity.

For at the end of the day, prosperity goes beyond material pleasures. It transcends material concerns. It resides in the quality of our lives and in the health and happiness of our families. It is present in the strength of our relationships and our trust in the community. It is evidenced by our satisfaction at work and our sense of shared meaning and purpose. It hangs on our potential to participate fully in the life of society.

Prosperity consists in our ability to flourish as human beings – within the ecological limits of a finite planet. The challenge for our society is to create the conditions under which this is possible. It is the most urgent task of our times.


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28 10 2009
Gudrun Freese

Sorry – to clarify the above:

The book Prosperity Without Growth: Economics for a Finite Planet is a completely revised and updated version of the SDC report. It will be published on the 2nd November by Earthscan. You can get it here: http://www.earthscan.co.uk/pwg

Thanks, Gudrun

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