Saturday, March 1, 2008

The LOWGROWTH economy

York university economist Peter Victor, in "Managing without growth" (in Ecological Economics, 61 (2007), p. 499) notes three reasons why continued and unlimited economic growth - which our governments currently support - is not possible or advisable, and why we should move towards a "low growth" model:

"1) global economic growth is not an option because of environmental and resource constraints, so developed countries should leave room for those that benefit the most from growth; 2) beyond a point that has been passed in developed countries, growth does not bring happiness; and 3) in developed countries growth is neither a necessary nor a sufficient condition for achieving such objectives as full employment, elimination of poverty and environmental protection."

As income goes up, happiness does not. There are several possible reasons for this, as identified by environmental psychologists. The main point is that we don't need to increase economic growth to benefit ourselves. In fact, increased economic, spurred by greater rates of consumption, are detrimental for physical and mental health.

The LOWGROWTH model utilizies a basic modelling system used by economists to explore whether or not the Canadian economy can acheive some major social and environmental goals, for the benefit of the populace, without ever increasing economic growth. Jobs are among the indicators Victor looks at, and determines that full employment, a near elimination of poverty, and a shorter work week can be achieved, and we can stop wrecking the natural world at the same time.

A significant part of the equation is the high economic cost of unsustainable practices on health care and environmental clean-up. If these costs are eliminated through lowgrowth management (i.e. conservation and a reduction in production and consumption) he notes that "much can be accomplished in developed countries without relying on economic growth."

The GPI (Genuine Progress Indicator) is a better indicator than the GDP of health and well-being. The GPI will go up as the GDP goes down, if we implement a LOWGROWTH or similar model.

Furthermore, "the paper set out the kind of policy directions that would have to be adopted to steer the Canadian economy towards lower growth while, at the same time, achieving desirable employment, anti-poverty and environmental objectives." All the solutions exist, so why isn't the public demanding a positive change? My own answer (which Al Gore also notes in his book The Assault on Reason) is that the mass media is complicit in "manufacturing consent" (Chomksy' phrase) to unjust systems, including the system of mass consumption and unlimited economic growth.

Victor's goal is to knock the paradigm of economic growth off its pedestal. The works of Herman Daly and E.F. Schumacher, thirty years ago, present much of the same vision. Another thing we should ask (and which Larry Schmidt asks in _The End of Ethics in the Age of Technology_(2008)) is why nothing has been done since Daly first spelled all this out decades ago?

Is our society completely insane and beyond redemption, as Derrick Jensen concludes, or can we find the moral courage and common sense to dismantle this juggernaut and build a just, sustainable world? A good example is the rebuilding of Germany after the war: that culture went from an orgy of homocidal and suicidal madness to a society of conservation and peace in a short time. Is bringing the Earth to the brink of total destruction really necessary to learn that an economy of unlimited financial growth (for the benefit of a minority) is suicidal madness?

1 comment:

John said...

To me it has something to do with the need of humans to fit in with their piers and be "respectable". Now someone (the press, the advertisers, etc.) have created the common value among humans that the more you have the better you are, so people want to have more and more, though they only need a fraction of it.