Economic growth, sustainability and degrowth

Photo: John Perivolaris – After Monet – near Giverny

It has become standard in modern society to expect that each year will see us consume more resources than the last. Since the 1940s the consumption of each nation on earth has been measured, and termed GDP, or Gross Domestic Product, writes Andrea Grainger. Not only is growth assumed in modern society, but also rapid growth. In Britain many economists say that an annual GDP growth of around 3% is ‘good’, 2% is ‘poor’ and 1% is ‘dreadful’. In effect an annual growth rate of 3% means doubling our rate of consumption every 23 years, so that by 2041 we will be consuming twice what we do today, by 2064 four times as much, and by 2087 eight times more.

This growth might appear ‘normal’ or ‘natural’ to humans today, but really it is very unusual for our species. Before the Industrial Revolution long-term growth rates above 1% were unheard of. For most of human history we have lived and flourished without the promise of rapid economic growth.

Increasing our consumption in the last two-hundred years has allowed us to dramatically improve our standard of living, and hopefully it will do so in the future as well. That said, we are now reaching a pivotal time in humanities development. We have advanced enough that we are now consuming almost all the resources on our planet, and we are still decades away from developing the technology to be able to access any resources in the wider solar system.

For now, we are limited to our finite planet, with its finite resources. Many of our minerals, including copper, tin, gold, silver and rhodium, are expected to be exhausted within forty years. At the same time, we have overshot many of the earth’s natural systems. We produce far too much carbon dioxide for the planet to cope with, we erode our soil too quickly, cut down too many trees, cause too many species extinctions, and flood our oceans with phosphorus, nitrogen and plastic.

There has been some success in the last few decades developing technologies to increase resource efficiency and allow us to consume more by reducing waste. But these measures only contribute to a fraction of our growth. In the next few decades at least, we will not be able to expand our consumption rapidly, and we may need to reduce many forms of consumption. Attempting otherwise will only cause a big economic crash, ecological catastrophe, or both.

We can and we must shift to a global economy with much lower rates of growth. There are some key steps that must be taken to smooth the transition, and the sooner we get started the better.

Firstly, we need to tackle the public culture in which accumulating ever more stuff is seen as the primary means of enjoying life. Partly this is driven by advertising; the Labour Party can help by regulating advertising and corporate marketing to reduce its presence in our public spaces. In addition, reducing inequality should reduce the effects of status competition and conspicuous consumption in society.

Secondly, we need to invest our time and energy into new ways of improving our society that don’t rely on increasing material consumption. The Labour Party can help by championing new ways of measuring progress in society beyond GDP. They can develop new metrics, promote them in the media, and challenge the Conservative Government for their narrow focus on consumption.

Social care

One of the key ways we can improve society is through increasing investment in social care and community building. Social care is vital for much of our populace, and stronger communities provide a wide range of benefits. Careers in these areas should be made accessible to the unemployed and to those who have lost their jobs due to automation. As automation advances, we can also take steps to reduce the length of the working week, with no losses of pay. A shorter working week is one way we can benefit from increasing labour productivity, without increasing our consumption; Instead we can develop a society with more leisure time and less stress.

Thirdly, reducing economic growth will mean a fall in corporate profits, and some degree of capital flight. Britain does not need foreign investment, as we are a monetary sovereign nation, but we do need to be prepared in advance, alert for sudden developments, and to respond calmly. Labour’s National Investment Bank, and Workers’ Buyout Policy are the initial steps towards being able to deal efficiently with capital flight. When businesses leave Britain, Labour needs to ready to socialise them, and convert them into worker co-ops. Alongside this, we need to increase investment in the next generation of  experts. With lower profit rates, and reduced inequality, we may have difficulty recruiting experts from outside the country to drive our industry. We will need to be investing in a world leading education system, to ensure we produce enough experts at home for our needs.

These changes make the transition to a low-growth society possible, and demonstrate that it need not be painful, or represent the end of our progress as a species. It is not something to be feared, and it is necessary for the protection of our vital planet.

Resources

https://degrowth.org
https://theconversation.com/life-in-a-degrowth-economy-and-why-you-might-actually-enjoy-it-32224
http://www.greattransition.org
https://www.reddit.com/r/Degrowth/
https://www.youtube.com/watch?v=b2OzyNpPe5s
http://www.declineoftheempire.com/2011/07/tin-production-a-classic-case-of-limits-to-growth.html
https://www.amazon.co.uk/Plan-2-0-Rescuing-Civilization-Trouble/dp/0393328317
http://www.mining.com/goldcorp-we-have-hit-peak-gold-48704/
https://web.archive.org/web/20071127032512/http://minneapolisfed.org/pubs/region/04-05/essay.cfm

 

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