No-Nonsense Guide to Degrowth and Sustainability

Introduction

The warning signals flash briefly across our TV and computer screens; scattered headlines appear in our newspapers and magazines. The messages are disparate but unambiguous: ‘Natural disasters forced 32 million from their homes in 2012’; ‘Pollution threatens world’s poor’; ‘Why the world’s weather will be going to extremes’; ‘Inequality undermines democracy’; ‘Burnt-out planet or financial doom?’; ‘Record urban growth poses challenge’.

The facts on the ground tell a disturbing story, if we choose to listen. But life gets in the way – school, family, work, the daily battle to survive – so few of us make the time to connect the dots.

Until recently that included me. A few years ago I researched and edited a special issue of New Internationalist magazine on economic growth. I’d read widely on sustainability and dipped into the burgeoning field of ecological economics so it was a natural segue. Plus I’ve been a keen student of economics most of my adult life, wading through the business pages, gamely trying to keep up with the twists and turns of the global economy, tracking how the rich and powerful manipulate the system to their advantage. I’m an amateur, but even highly trained, professional economists rarely step outside the dominant paradigm. Combing through the critical literature on growth I began to pay attention to the big picture. It wasn’t long before the scattered bits of information began to gel into a coherent whole.

A clear line emerged, connecting the dominant growth model to world-shaking social and environmental issues: widespread habitat destruction, the loss of biodiversity, chaotic shifts in global weather, the steady depletion of natural resources, growing income inequality, the debt-laden and crisis-prone global economy. The more I read, the more I discovered all these things circled back to growth.

Then I began to think: maybe growth is not the solution to our problems, maybe it is the problem. And the reason we can’t see that is because we’re thoroughly immersed in a worldview that says the only way to prosperity and well-being is by growing and expanding the economy.

Forever.

But as the pioneering economist and systems analyst, Kenneth Boulding, once said: ‘Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.’ Nearly 50 years ago, Boulding saw the writing on the wall. In his 1966 essay, The Economics of the Coming Spaceship Earth, he described the ‘closed’ economy of the future ‘in which the earth has become a single spaceship, without unlimited reservoirs of anything, either for extraction or for pollution, and in which, therefore, man must find his place in a cyclical ecological system’.

A failure of imagination

Humankind as one part of a cyclical ecological system: that notion now seems both logical and obvious. We know intuitively that nature and culture are co-dependent. We are beginning to understand that we cannot destroy the planet without destroying ourselves. Yet the gap between understanding and action is hard to bridge. Inertia is a powerful barrier to change. The growth system continues to define the contours of our world. This is as much a failure of imagination as of policy.

A few years after Kenneth Boulding, another radical critique of economic orthodoxy surfaced in the best-selling Limits to Growth, a ground-breaking study that had the moxie to suggest that growth carried within it the seeds of its own destruction.

The idea that human enterprise was bounded by bio-physical limits was a wake-up call that provided fuel for an embryonic environmental movement. But it was soon forgotten in the giddy surge of deregulated markets that exploded in the 1980s. Barriers to the free flow of capital were eliminated; financial speculators ruled in a computerized world, holding entire countries to ransom. The ethos of unlimited consumerism easily migrated across borders in the digital era. Giant factory trawlers vacuumed the seas. Vast monocultures of genetically modified crops fed by petrochemicals replaced native grasslands and forests. Deep-pocketed mining companies expanded their restless search for resources from the Arctic to the Amazon. It was, in other words, growth as usual.

The argument that the resources of the Earth have a limit is self-evident. More to the point, as the environmental footprint analysis shows us, we are already past those limits, consuming irreplaceable natural capital at a rate that is jeopardizing the well-being of future generations. We have put growth ahead of sustainability to the extent that sustainability has become a marketing tool, an excuse for more of the same. We can no longer grow the economy and strive for sustainability. The two concepts are mutually exclusive.

Economic meltdown

The failure of the dominant growth model has been painfully evident since the global economy collapsed in 2008. Triggered by footloose investors, a weak regulatory structure, delusional bankers and an enormous US real-estate bubble, the whole creaking edifice teetered on the brink of disaster. The global credit web, the circulatory system of world capitalism, slipped into paralysis as major banks hunkered down and refused to lend to each other.

With the ghost of the Great Depression of the 1930s hovering in the background, politicians eventually saw the light and closed ranks. In Europe, North America, Australasia – even in China – governments injected massive liquidity into floundering markets, bailing out distressed banks and major corporations in a united-we-stand effort to save global capitalism from its own excesses. Millions of workers lost their jobs as companies cut costs.

In total nearly $16 trillion in public funds (mostly interest-free loans) were used to prop up the international financial system. The intervention helped to stave off immediate financial disaster in the shape of a severe global depression. Credit gradually started to move again, trade slowly resumed, corporations and banks once again became profitable. But it was a grudging kind of recovery.

Unemployment remains unacceptably high in most Western nations, with grievous social fallout. Poverty is increasing as the gap between rich and poor widens. Food banks are doing a booming business. Governments face massive budget deficits, mainly because of the billions in debt they took on to underwrite the economic recovery. Meanwhile, the corporate sector points to public debt as the source of our economic troubles. The irony is that the debt was first contracted to bail out those same banks and corporations. Instead the cry is for ‘balanced budgets’ to restore ‘market confidence’.

This is the medicine we supposedly must take to nurse the economy back to health: cuts in government services, sale of public assets, reduced pensions, redundancies, stagnant wages and tax breaks for the wealthy. Nearly half a decade after the crash, we’re back where we started. We wait for growth to save us while ordinary people take the hit.

The assumption has always been that growth will make things better. In fact you could say that growth is the escape valve for modern capitalism. Without it, the poor would have good reason to grumble. With it, tomorrow will always be brighter. If we just keep ramping up the GDP, things will improve. Michael Mandelbaum of the Johns Hopkins School of Advanced International Studies summed up this view when he said that ‘economic growth is necessary to keep the promise… that each generation will have the opportunity to become more prosperous than the preceding one, the popular term for which is the American Dream.’

The measuring stick for growth is Gross Domestic Product (GDP), which is basically a laundry list of all the things we produce, usually divided by population to give us GDP per capita. As a measurement of human progress, this is a very rough-and-ready metric. How can it not be when it mixes up ‘bads’ and ‘goods’? Anything that has a dollar sign attached to it contributes to GDP. Oil spills, suburban sprawl, war and crime are lumped together with steel production, medical consulting fees and the value of this year’s wheat crop.

But the indication now is that the price we pay for growth exceeds the benefits. The balance has tilted to the increasingly worrying downside – what the writer Herman Daly calls ‘uneconomic growth’.

Only this time there’s a difference. There’s a growing recognition that the global economic system is rigged in favor of the wealthy, the top 1% who run the show.

In September 2011, a few thousand folks pitched tents in a corporate-owned park in the heart of lower Manhattan. ‘We are the 99%,’ was their slogan. The ‘Occupy Wall Street’ (OWS) movement was a mix of jobless college graduates, single moms, social activists, union members, clergy, concerned citizens and others. The message was clear, even if the alternatives weren’t. The protest was against the corporate takeover of the international economy, against economic inequality, against the continuing destruction of the environment and called for social justice and a different vision for the world.

The OWS movement was initially overlooked by the corporate media, but it soon spread via the internet and social media until it could no longer be ignored. Other ‘Occupy’ movements popped up in dozens of cities around the globe – from Toronto, Montreal and San Francisco to Sydney, London and Paris – in an effort to spread the message of dissatisfaction with the global economy. Growth was not specifically the target of the protests. But it was certainly the subtext.

The ‘Occupy Wall Street’ movement is the most recent sign of a more extensive global phenomenon. There has been a wave of social and political turmoil and instability since the world lurched into economic chaos. The ‘Arab Spring’ caught the attention of the world, igniting political change across North Africa and the Middle East while causing dictators elsewhere to be on alert. There were riots in London. In Spain, Italy and Greece, citizens faced with painful austerity measures staged mass public demonstrations. Chilean students took to the streets to bring attention to economic inequality and rising tuition fees while Israel experienced its largest demonstrations in decades when hundreds of thousands of middle-class citizens protested high housing prices and falling living standards. Even in the two economic powerhouses of the developing world there were signs of dissatisfaction. There is growing impatience and disgust with corruption in India and mounting unhappiness with inequality and environmental damage in China.

Finding a better path

There has to be a better way and that’s what this book is all about. Sustainability and degrowth are, in many ways, very old ideas rooted in traditional spiritual and humanist notions of husbandry, stewardship and community. But they are also two very loaded terms.

In this No-Nonsense Guide I’ve attempted to unpick those concepts and to think about what it means to live in a world where growth reigns supreme. With each passing day it’s increasingly evident that the prevailing model is leading us down a dangerous and ever-narrowing path. We need what used to be called a ‘paradigm shift’.

A decade ago, a global opposition movement provoked by the ravages of economic globalization declared that ‘another world is possible’. If anything, that alternative vision is even more urgent today as we face a future of life after growth. We need to redefine what we mean by prosperity but, more critically, we need to ask fundamental questions about the end goals of our frenzied economic activity. What is an economy for? Do we want an ever-growing GDP and ‘sustainable growth’? Or do we want to reshape our economic project to sustain people, communities and the natural world? With a sense of common purpose we can avoid environmental collapse and pave the way for a more convivial future. Without this great transformation, we risk lurching from crisis to crisis, compromising the fate of the generations who will follow us.

As Kenneth Boulding warned: ‘There is a great deal of historical evidence to suggest that a society which loses its identity with posterity, and which loses its positive image of the future, loses also its capacity to deal with present problems, and soon falls apart.’

Wayne Ellwood

Toronto, 2013

1 The growth machine

The unquestioning devotion to the idea of constant economic growth is a fairly recent phenomenon in human history. But it has taken firm hold despite the numerous great thinkers who have pointed out what should be clear to all – that in a world of finite resources, exponential growth is not only unsustainable but also extremely dangerous.

‘The difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds.’

John Maynard Keynes

The eminent British biologist Charles Darwin was a careful scientist – meticulous, patient and rigorous. He spent five years at sea on a research ship, The Beagle, collecting data, then nearly 20 years sifting his research, honing his analysis and polishing his prose, before publishing On the Origin of Species, his groundbreaking work, in November 1859.¹

Darwin’s slim volume was what we would call a ‘game changer’; a revolutionary work that irrevocably and fundamentally altered the way human beings see themselves and the natural world. Today, most of us are familiar in a general way with his theory of ‘natural selection’ – the foundation of modern evolutionary biology. But 150 years ago, things weren’t so clear-cut. Darwin was sailing into choppy waters. The Church of England set rigid boundaries on scientific thought and his thesis was clearly offside – a challenge to the orthodox Biblical view that humans were a separate, unique part of God’s creation and that all life was divinely concocted and unchangeable. The establishment mocked him. There was intense public debate. But Darwin stood his ground and eventually, with the support of Thomas Huxley (aka ‘Darwin’s bulldog’) and others, his radical insights found acceptance.

Darwin’s core idea that all animals and plants evolve and adapt through natural selection is now the bedrock of modern life sciences. He unlocked the door to a new way of understanding the history of life on Earth – although ‘junk science’ theorists, religious fundamentalists and ‘intelligent design’ proponents are still trying to slam it shut.

History of an idea

For most of human history, economic growth was a mere blip. Societies developed slowly, economies were founded on subsistence and growth was minimal. Only the last eight generations of humans have experienced consistent growth (out of an estimated 125,000 generations in total). ‘Historically, steady state is the normal condition; growth is an aberration.’²

The modern idea of growth is a product of the 17th- and 18th-century European Enlightenment that challenged traditional views of religion and humankind’s place in the cosmos. Thinkers like John Locke in England, David Hume in Scotland, Voltaire in France and Thomas Paine in the US mapped out this new intellectual terrain.

This rupture with tradition changed age-old cyclical thinking to sequential thinking, unleashed democratic political movements and ushered in the rule of law. The idea of progress became paramount: the notion that history has a direction, which is the gradual improvement of the human condition. The rise of science and the empirical method merged with improved technologies (the steam engine, gunpowder, the printing press), stimulating early capitalism. Economic growth became synonymous with social progress, development and human improvement. European colonialism then spread the ‘growth equals progress’ idea around the world.

But it wasn’t until the Second World War that our modern understanding of growth began to enter the consciousness of governments and international agencies. According to one scholar, ‘there is hardly a trace of interest in economic growth as a policy objective in the official or professional literature of Western countries before 1950’. Pumping up the war machine proved that growth could be rapid, if necessary, and pointed the way to future expansion. In 1943 the US National Resources Planning Board reported to President Roosevelt: ‘Our expanding economy is likely to surpass the wildest estimates of a few years back and is capable of bringing to all of our people freedom, security and adventure in richer measure than ever before in history.’³ Less than two decades later, the future US President Ronald Reagan summed up this view during his stint as host of a hugely popular 1950s TV drama programme sponsored by General Electric. Every Sunday night a young, rock-jawed Reagan confidently told American viewers: ‘Progress is our most important product.’

In his 1978 book, The Rise and Fall of Economic Growth, HW Arndt adds that a statement by the US Council of Economic Advisors in October 1949 ‘was perhaps the first explicit official pronouncement in favour of economic growth as a policy objective in any Western country’. With the arrival of the ‘Cold War’ in the 1950s and growing tensions between the Soviet Union and the West the notion of growth took on another dimension. Increasing per-capita GDP was trumpeted as a measure of who was winning the battle between two contending economic systems. Within a few decades, growth became the ultimate metric of progress and economic health around the world. As Arndt notes, the case for economic growth was based on the belief that steady, rapid and indefinitely increasing productive capacity was the key to higher living standards, which were both ‘desirable and demanded’ by the citizenry of the world.

This slavish devotion to growth economics still dominates