Tackling the Growth ParadigmNov 10th, 2011 | By admin | Category: Economics and GDP, Energy and Carbon Emissions, Other Resources
By Suzanne York, HowMany.org, November 9, 2011
With the Occupy Wall Street protests gaining traction and the global economy in the doldrums, the time is ripe – actually, overdue – to question the policy of unrestrained economic growth in the face of not only the demands of the 99% but also a planet of finite resources and climate chaos.
This week in Berkeley, Randy Hayes, founder of Rainforest Action Network and executive director of the think tank Foundation Earth, will be speaking on the need to change this unsustainable system of economic growth. And next week, also in Berkeley, is the local premiere of the film “Growthbusters: Hooked on Growth”, which raises questions about the public policy goals of economic and population growth and their relationship to social and environmental health and well-being.
Conventional wisdom posits that global growth can, and should, continue forever, yet the reality of resource constraints is challenging this economic creed.
Usually when people speak of economic growth, they mean a rise in GDP (Gross Domestic Product). This rise comes from a rising population increasing their individual (per capita) consumption. Our communities and the environment already face mounting pressure as more citizens in developing countries rise to the middle-class and begin to have consumption levels similar to Americans. The Indian middle-class is the fastest growing demographic in the country; it is estimated that the middle-class could number 600 million Indians by 2030.
Understandably, citizens of developing countries want what we have. One of the biggest challenges the world faces is to find ways to overcome unsustainable and inequitable levels of consumption in the reality of dwindling natural resources. It would take 5 planets like Earth to support everyone in the world living an average American lifestyle. Until we colonize Mars and a few other planets we’ve got to rein our unsustainable lives.
How do we overcome this global policy of economic growth and consumption? Nothing may happen until we are forced to, whether by a crisis of peak fossil fuels, unstable climate, or economic depression. But many people are working proactively to take steps now to begin a realistic transition.
Alternatives to GDP:
Gross Domestic Product (GDP) is the market value of all goods and services produced within a country’s borders during a given year. Politicians, journalists and economists often talk as if raising GDP is a goal in and of itself. Really the goal is to increase people’s well being – and GDP is not very closely related to people’s well being. Among it’s many flaws is that a negative event, such as a flood, will increase GDP as people rebuild – even though it certainly doesn’t help our prosperity. Another flaw is that it is a measure of total financial activity, not the activity of the typical individual. For example, in the decade since 2002, GDP has risen, but most people’s wealth has not – the increase has gone only to the 1% at the top.
Many books and academic papers have extensively covered alternatives to GDP and measures life beyond monetary growth, focusing on health, environmental well-being, and happiness. A couple of the most promising alternatives include the Genuine Progress Indicator, which adjusts for environmental damage and depreciation and also accounts for housework and volunteer activities, and the Happy Planet Index, which measures a country’s ecological efficiency in delivering human well-being.
Human population numbers are predicted to keep growing for the near future, and could reach 10 billion people by 2100. Maybe the earth can handle so many humans, but with rising income levels and economic growth we are consuming resources at an unsustainable rate with potentially severe consequences.
One way we can positively address population growth today is by empowering women, especially by investing in women’s health, voluntary family planning, and education. This can have a huge affect on fertility rates, family health, equality, economics, and the environment. And family planning can be an inexpensive way to reduce poverty.
Move to a Steady-state Economy:
Herman Daly, one of the founders of the field of ecological economics and critic of the endless growth economy, calls for replacing it with a steady-state economy. It would aim for a stable population and mildly fluctuating levels in consumption of energy and materials. Some of the policies to help the world get to this steady-state include a cap-auction-trade system for basic natural resources, an ecological tax on resource depletion and pollution, shorter work weeks, and income equality.
Evolving Corporate Mindset:
Altering the growth and consumption mindset voluntarily will require a lot from people. Obviously corporations will need to support this change, (and media/advertisers). Patagonia is one example of a company tackling sustainability. It recently launched its Common Threads initiative, which allows customers to sell used Patagonia products through eBay. According to Patagonia’s website, Americans discard 11.9 million tons of clothing, shoes, and textiles every year. The company makes a high quality product which should be reused when possible, and it’s encouraging to see Patagonia press ahead with this initiative. For a company to say don’t buy what you don’t need is groundbreaking.
Moving away from a growth mindset will be a political and social challenge. It won’t be easy, but it is possible when people fully understand that we have been living it up at the cost of our children’s and grandchildren’s well-being. Let’s have the discussion of life after growth before things get out of control.