Accelerating over the edge of the cliff

Climate & Capitalism have posted a  Sunday Herald story on a report due out tomorrow. The report is by the environmental advisors to the U.K governments and appears to pull no punches – a taste:

The economic system is broken, and attempts by governments to fix it by kick-starting growth and consumerism are “delusional” and “pathological”

UPDATE: The full report, a summary, and background papers are available here. The full report is quite sizeable, so you might want to start with the summary – it is good stuff. A few  quotes as a summary of  the summary follow:

In short, this report challenges the assumption of continued economic expansion in rich countries and asks: is it possible to achieve prosperity without growth? Recession throws this question into sharp relief.(p.6)

…the idea that growth can deliver us from the crisis is also deeply problematic. Responses which aim to restore the status quo, even if they succeed in the short term, simply return us to a condition of financial and ecological unsustainability. (p.7)

A more appropriate response is to question the underlying vision of a prosperity built on continual growth. ….Prosperity has undeniable material dimensions [but]… the requirements of prosperity go way beyond material sustenance. Prosperity has vital social and psychological dimensions. To do well is in part about the ability to give and receive love, to enjoy the respect of your peers, to contribute useful work, and to have a sense of belonging and trust in the community. …an important component of prosperity is the ability to participate meaningfully in the life of society. (p.7)

But what do we do when ‘the economy’ seems to need growth, and when evidence and logic suggest ‘de-coupling’ economic growth from additional resource use & ecological impacts (at least in absolute terms) is a myth?

…two interrelated features of modern economic life that together drive the growth dynamic: the production and consumption of novelty. (p.9)

But the continual production of novelty would be of little value to firms if there were no market for the consumption of novelty in households. Recognising the existence, and understanding the nature, of this demand is essential. It is intimately linked to the symbolic role that material goods play in our lives. The ‘language of goods’ allows us to communicate with each other – most obviously about social status, but also about identity, social affiliation, and even – through giving and receiving gifts for example – about our feelings for each other. (p.9)

…the relentless pursuit of novelty creates an anxiety that can undermine social well being. Individuals are at the mercy of social comparison. Firms must innovate or die. Institutions are skewed towards the pursuit of a materialistic consumerism. The economy itself is dependent on consumption growth for its very survival. The ‘iron cage of consumerism’ is a system in which no one is free. It’s an anxious, and ultimately a pathological system. (p.9)

… a ‘green stimulus’ is an eminently sensible response to the economic crisis. It offers jobs and economic recovery in the short term, energy security and technological innovation in the medium term, and a sustainable [sic, see next para.] future for our children in the long term. (p.9)
Nonetheless, the default assumption of even the ‘greenest’ Keynesian stimulus is to return the economy to a condition of continuing consumption growth. Since this condition is unsustainable, it is difficult to escape the conclusion that in the longer term something more is needed. (pp.9-10)

Unfortunately,

There is no clear model for achieving  economic stability without consumption growth. Nor  do any of the existing models account fully for the  dependency of the macro-economy on ecological  variables such as resources and emissions. In short there is no macro-economics for sustainability  there is an urgent need for one. (p.10)

The full report includes a couple of models which suggest an economy can be stable without growth – a key element being worktime reduction policies to avoid unemployment, and that increasing the share of savings and investment in national income is crucial for making it possible for an economy to transition away from fossil fuel dependency (p.10, Chapter 8 )

But –

Fixing the economy is only part of the problem. Addressing the social logic of consumerism is also vital. This task is far from simple – mainly because of the way in which material goods are so deeply implicated in the fabric of our lives. But change is essential. (p.10)

Chapter 9…explores why people may turn out both to be happier and to live more sustainably when they favour intrinsic goals that embed them in family and community rather than extrinsic ones which tie them into display and social status. (p.11)

On the other hand, those at the forefront of social change are often haunted by the conflict of trying to live, quite literally, in opposition to the structures and values that dominate society. ….    For this reason, structural change must lie at the heart of any strategy to address the social logic of consumerism. And it must consist in two main avenues. The first is to dismantle the perverse incentives for unproductive status competition. The second must be to establish new structures that provide capabilities for people to flourish – and in particular to participate meaningfully and creatively in the life of society – in less materialistic ways. (p.11)

And as for the role of government in all this:

…freeing the macro-economy from a structural requirement for growth will simultaneously free government to play its proper role in delivering social and ecological goals and protecting long-term interests. The narrow pursuit of growth represents a horrible distortion of the common good and of underlying human values. It also undermines the legitimate role of government itself.  (p.11)

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