Off the Pedestal

notes on Speth, James Gustave. “Off the Pedestal: Creating a New Image of Economic Growth.”  Yale Environment 360. 31 May 2011.

Economic growth is our favorite thing here in America. The “growth imperative” dominates US political and economic life.

There are limits of growth, however. Herman Daly: “if neoclassical economists were true to their trade, they’d recognize that there are diminishing returns to growth.” Growth also has increasing marginal costs (damage to climate, etc.). At some point, the extra costs of growth exceed the extra benefits, and we enter into a phase of “uneconomic growth” (Daly’s phrase). Many would argue that we already have.

If one could measure and add up the environmental, security and psychological costs that US economic growth generates at this point in our history, they would exceed the benefits of further ramping up what is already the highest GDP per capita of any major economy.

The never-ending need to grow the overall US economy is ruining the environment; it fuels a ruthless international search for energy and other resources; it fails at generating the needed jobs; it hollow out communities; and it rests on a manufactured consumerism that is not meeting the deepest human needs.

We need a “post-growth society” that takes care of the environment, working life, communities and families, and the public sector.

Policies that would slow growth while sparing the environment and improving social and individual well-being:

  • Shorter work-weeks, longer vacations — more time for children and families
  • Greater labor protections
  • Job securities and benefits — including generous parental leaves
  • Guarantees to part-time workers and combining unemployment insurance with part-time work during recessions
  • Restrictions on advertising
  • A new design for the twenty-first century corporation — one that embraces re-chartering, new ownership patterns, and stakeholder primacy rather than shareholder primacy
  • Incentives for local and locally-owned production and consumption
  • Strong social and environmental provisions in trade agreements
  • Rigorous environmental, health, and consumer protection, including full incorporation of environmental and social costs in prices
  • Greater economic and social equality — with genuinely progressive taxation of the rich, including a progressive consumption tax and greater income support for the poor
  • Heavy spending on neglected public services
  • Initiatives to address population growth at home and abroad

Limits to growth — not that we shouldn’t but that we can’t continue to grow. We are entering a new age of scarcity and rising prices that will constrain growth. A new geological epoch:

It’s a pity we’re still living in an age called the Holocene. The Anthropocene — human dominance of biological, chemical, and geological processes on earth — is already an undeniable reality.

(Paul Crutzen and Christian Schwägel)

It’s hard to imagine that growth won’t be slowed due to scarcity, rising prices, economic losses due to climate disruption.

Peak oil – the point of maximum production after which production begins to decline (many say we hit peak oil in 2005, almost everyone agrees it will have been reached by 2030)

Many have concluded that our civilization, having completed its exuberant, flamboyant phase, is headed toward a dramatic simplification and re-localization of life and the end of economic growth as we have known it.

Rob Hopkins, “Transition Handbook,” gives three scenarios:

  1. Adaptation — “we somehow invent our way out of trouble.”
  2. Evolution — “a collective change of mindset, with a society diminishing in scale but retaining its coherence.”
  3. Collapse — “the fracturing and disintegration, either sudden or gradual, of society as we know it.”

Last words:

We will have to shift to a new economy, a sustaining economy based on new economic thinking and driven forward by a new politics. Sustaining people, communities and nature must henceforth be seen as the core goals of economic activity, not hoped-for by-products of market success, growth for its own sake, and modest regulation.

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