Economic growth is sending her bankrupt
For life as we know it to persist, we must acknowledge there are natural limits to growth. Economic growth equals increased demand, which is simply not sustainable in a finite world, writes Keith Presnell.
THERE IS A dark side to economic growth. History has seen human communities evolve from hunter-gatherers to agriculturalists, to industrialists and more recently to technologists.
Each of those steps introduced new pressures on environmental balance. Each of those steps enabled our species to exercise greater leverage over other species.
In economic terms, as hunter-gatherers, we invested in a futures contract anticipating that the planet’s natural resources would remain inexhaustible. Mother Nature is now calling the contract back in and with the planet’s natural resources in disarray, humanity will struggle to remain solvent.
As the developed world’s economic strategy changed over time, so did its justification. It went from being a subsistence economy designed to facilitate survival, to a commercial economy where production is traded for services, to a growth economy driven by materialism.
The reality of economic growth
Who or what benefits from economic growth? Certainly not the web of life as it exists on our planet. Economists need to factor in that our planet functions as a living organism and any interference with its metabolism will have an environmental cost. Austerity, not growth is needed.
Economies built on materialism require willing customers. Materialism occurs when “Mister Average” has a purchasing ability over and above what he needs. Initially, that capacity was generated by hard work.
What happens in a world where mechanisation and artificial intelligence have replaced the need for a traditional workforce? Stagnation in wage growth is a classic symptom. Strengthening of social classes, another.
Historically, evolution on planet Earth progressed as a dynamic balance between physical and biological phenomena. Biological activity is revealed by a web of life. It requires equitable access to the planet’s physical resources for that balance to be maintained. Effectively, those resources are a “natural commons”. Exclusive use and abuse of the commons destabilise that balance to the detriment of natural productivity.
A sustainable population is when all individuals within a population have an opportunity to be engaged constructively in meeting the demands of evolution.
For life as we know it to persist, we must acknowledge there are natural limits to growth. A corollary to economic growth is increased demand and that, in a finite world, is unsustainable.
Maintaining economic growth defies common sense
Maintaining economic growth has to stop and the two options are a controlled stop or a chaotic stop.
A controlled stop would involve economic strategies that feature an inter-generational perspective. To be sustainable, demand cannot exceed supply. Our competitive drive – exploited by the private sector to such good effect – needs to be balanced with an equally powerful social ethic.
Life after economic growth will need to feature management that reverses the current abuse of the natural commons.
Judging by the extent of environmental damage that has emerged over the last century or two, there is a sound case for assuming that many localities are already well past their natural carrying capacity. You might say the paddocks are being overgrazed and as a result, the planet’s natural productivity is waning.
To rebuild a healthy planet, we would need to exercise “communal” as well as “personal” self-control. Addressing the problem entails universal access to education with a focus on shifting the demand for resources away from what individuals might want, to what they need. It also will require steps to adjust our population accordingly.
Rebalancing fairly and sustainably
A sustainable economy would rebalance a public sector agenda designed to provide the population with equitable access to essential services – such as health, education and communications – with the operations of a private sector focused on delivering specialised services.
Individuals perform best if their efforts are fairly rewarded. Contemporary society relies too heavily on money as a reward. Money, as the principal form of motivation in a community, has many flaws.
Certainly, money can be a fair reward for effort, but it also serves to reward the cunning, able to acquire it without comparative effort. Money rewards the greedy, where resources are accumulated at the expense of others and it even functions as a reward for the dishonest, when crimes, particularly cyber and white-collar crimes, become too difficult to police.
Communities need an alternative “motivator” — one that would see available resources distributed fairly. For that to happen, a public sector equivalent of the almighty dollar is essential. It could be based on a measurable contribution from an individual, or a group, to the advancement of community priorities.
A reward adjusted to reflect the value of that activity to the community might be a unit of credit (let’s call it “social credit”), issued in acknowledgement of that service. Advanced computer technologies would be needed to manage the accounts. The role of existing currencies would remain for commercial expediency.
Individuals could use their time and skills to earn either money or social credits. For instance, a doctor of medicine could earn conventional money treating private patients, or he or she could earn community credits by volunteering services to treat public patients.
There are two steps a community would need to take to set the process in motion. The first introduces the concept of intergenerational and interspecies space. This involves eliminating freehold land ownership by accepting that land is a natural common.
The second step would be legislation that established the right to lease a parcel of land that could only be acquired using social credits. Lease instruments could specify permitted land uses and establish covenants that ensure that the land’s environmental integrity is respected.
Social credits would effectively be an IOU issued by the local community. That credit would be non-transferable between recipients. Their value could only be redeemed by the community — either as access to the natural commons or converted to cash.
The big question? How to get the ball rolling ;
With a powerful private sector actively resisting change, a revolution is needed.
Not one based on the violent destructive exercises that inevitably reinforce private sector interests, but a quiet revolution. One that wakens the whole of humanity. One that resurrects the use of “common sense” as a filter for actions taken. One that adopts cooperation as the best way forward — not competition.
Certainly not one with “economic growth” as its holy grail.
Keith Presnell, now retired, was director of renewable energy research at Charles Darwin University and Australia’s representative on the International Energy Agency (IEA‘s) photovoltaic subcommittee.
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