By Scott Colvin, member of the St. Gallen Symposium's global Leaders of Tomorrow community
[T]he increase of wealth is not boundless.
The stationary state of capital and wealth would
be a very considerable improvement on our present condition
- John Stuart Mill, Principles of Political Economy
The world is living in a fantasy.
Like all good collective delusions, this one bleeds the lust from living reality; replacing it with, instead, a more palatable - a more easily consumed - version of the truth.
That fantasy is this: societal strength depends upon economic growth.
For decades, the idea that the success of the economy, as measured in GDP increase, was inherently connected to improvements in society was true - and useful. The machinations of western post-industrial capitalism produced miracles unimagined by those who came before: the possibility of land ownership for common labourers, increases in life expectancy and accessible higher education; the stable fact of a middle class. Growth and prosperity have become so correlated that many feel one cannot be had without the other.
But what if this were not the case? Extraordinary claims require extraordinary evidence - certainly. But what if that evidence isn't as remarkable as it is ordinary and in plain sight? In that case, would you be prepared to accept that long-term societal prosperity required an abandonment of growth as a leading pursuit?
I generally find that there are three facts that are, with some exceptions, accepted. The first is that we live on a warming planet soon to be too hot to support our reckless selves. The second is that developing countries endure shameful conditions of famine, poverty, and health and technological stagnation, on which western countries feed. The third point is that countering of the first two must be indefinite: climate change must be halted permanently, and no country should again be left so far behind the others.
Given that there is general support for those three propositions, it follows that there should also be support for their more aphoristic version: safe, happy, healthy - forever. And that's exactly what we're all after in the end, is it not? Any discussion of global society and our future must begin with this simple aim: safe, happy, healthy - forever.
Growth is Incompatible with Prosperity
The 2015 Paris Climate Conference affirmed what has become both bellwether and casus belli of climate change: limiting global temperatures to an increase of 2o above pre-industrial levels. Calculations of the amount of carbon that may be 'spent' over the next century in order to reach this target suggest that developed nations must decrease their emissions by 8%-10% per annum. However, a reduction above 3%-4% has been shown to be incompatible with economic growth, and even a 1% reduction has only been associated with recession (ibid page 204). Halting climate change is incompatible with growing economies.
But that is only the first piece of the puzzle. The second is that developing countries will need to increase their carbon emissions if they are to 'accelerate' their economies to achieve a higher standard of living - at least initially (Thomas Piketty, Capital in the Twenty-first Century). If global warming is to be combatted equitably, it is fair that developing nations be allowed to expend more resources improving their lot first (Copenhagen Accord. (2009) FCCC/CP/2009/L.7). Were the world's current population to consume at the same scale as an average American, at least four planet Earths would be required to sustain that consumption. Bringing emerging countries to a standard of living similar to western nations places an even greater burden on the carbon reduction of developed countries.
Increasing technological and production efficiencies is not enough. There exist a well-known number of paradoxes that suggest gains to efficiency lead to increases, and not decreases, in total consumption (Such as Jevon's paradox. See, The Jevons Paradox and the Myth of Resource Efficiency Improvements, John Polimeni, Kozo Mayumi, Mario Giampietro & Blake Alcott (Earthscan, 2007)). To borrow the vernacular of logic, the only alternative to growth is not-growth. This has become known in a more striking use of language as décroissance, or degrowth. To circle our discussion back to the opening, where once growth was a measure of prosperity, prosperity must now be associated with degrowth. Long-term societal prosperity is the logical and philosophical alternative to economic growth, and degrowth is its most essential aspect.
A Planned Obsolescence of Growth
As ever, the difficulty is in finding solutions. The imperative of pragmatism is that our efforts be shaped by what can be realistically achieved. To that extent, it is worthwhile to disregard solutions that, while noble, are means too overborne to achieve their ends. In that spirit, we should confine ourselves to micro-solutions: small nudges that, together, produce meaningful results.
Companies and corporations are tortured by endless hunger for growth; it is an almost biological imperative for them, in which natural selection favours employees and executives capable of ensuring that growth. Our prevailing corporate structure is built on growth and profit-maximisation: shareholders provide capital for businesses and, in return, the law ensures that the 'best interests' of the company, to which the company's directors are bound, are their financial best interests (This is the formulation in the law of the United Kingdom and other Commonwealth jurisdictions.). QED, businesses, under current law, are unlikely to offer proactive contributions to degrowth. Governments, too, have little imperative to facilitate degrowth. And not just for the tired reason that they have secretly eloped with big business: people have come to associate growth with greater employment prospects, lower taxes and better healthcare, leading to governments winning elections.
There are three key fulcrums of reliance that must be leveraged in order to facilitate degrowth: people, business, government - and in that order. Though these seem to be discrete areas of action, given the reticence of business and government, we ought to acknowledge that the primary drivers of action must be ordinary constituents lobbying both community and government. There is a tremendous potential for regular citizens to have their representatives make important changes; but hence the need for pragmatism - only slight changes have a chance of making it through the labyrinth of bureaucracy and legislature.
The most common expression of people's reliance on growth is consumerism. It is difficult to tell to what extent growth leads consumerism and consumerism leads growth, but the result of that dance is undoubtedly many products that offer little to society. To halt consumerism is, of course, a daunting task, but it is made easier by the simple fact that studies show consumerism doesn't make people happy. This alone suggests that if successful steps are taken, there shouldn't be too much of an impulse to revert back; the medication won't be rejected by the system.
In searching for a solution to a problem, it is often useful to attempt to reverse-engineer the cause of the problem. To weaken advertising's grip on people would strike a humbling body blow to consumerism. Already Millennials seem to be spending more on experiences than goods. Why not go further and restrict advertising? The metrics of this are simple: for example, setting a minute-per-hour limit on television advertising or banning billboards in certain areas of a city (It should be noted that under American law, legislation prohibiting such commercial speech may run afoul of the Constitution, something undoubtedly paralleled in other jurisdictions: see, Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557. This may be avoided, however, by legal drafting that emphasises the strong public need for the regulations - a need that is best served by the prohibition.). And the impact may be less severe then imagined, with a supposed decrease in revenue from a shorter supply of advertising somewhat offset by an increase in demand (and therefore price) of the advertising that is available. The sell of this approach, as it were, isn't difficult: as mentioned, the number of studies stating that consumption doesn't beget happiness is only increasing, and if it is pitched as something that needs to be done for the next generation - and most parents intuitively seek to protect their children from the vice of materialism - there should be less grumbling than may be expected.
Lawmakers should also be concerned with encouraging the shared economy, too. Though the concept is definitely au courant, its potential to reduce consumerism should be explored further. Simply put: by turning producers into providers, and owners into users, the quantity of production is greatly decreased. Think of all of the plastic that has been saved by users streaming movies instead of purchasing DVDs. Regulatory involvement should be focussed on encouraging this type of business model by providing tax concessions as well as working with foreign jurisdictions to build a system where digital goods can flow freely across borders with fewer distribution and copyright issues. The involvement can be more humble too: local councils should develop micro-communities that allow people to pay for access to, say, a workshop full of tools for carpentry, or a garage full of musical equipment for playing. Limitation is only set by people's considerable wants.
Though previous mention was made of business's inability to halt growth, that fact could change radically with a slight legislative intervention. The corporation has become the predominant legal form of incorporation, in which shareholders hold primacy. But there is much scope for encouraging alternative forms of incorporation. For instance: cooperatives - entities that expend fewer resources than corporations and better weather economic volatility, and without so directly relying on growth for survival. Other forms have been proposed, including low-profit limited liability companies (Known in the United Kingdom as 'Community Interested Companies' and in Germany as gemeinnützige GmbH), which have a stated charitable aim to work towards, and who enjoy lower taxes (And no corporate tax at all in Germany).
While these suggestions are useful, there is a solution even closer to the tip of the legislative pen: removing shareholders as the primary concern of the corporation. This could be achieved simply by amending existing corporations law to state that the 'best interests of the company' are the shareholders' financials, or whatever interest is specified in the corporation's constitution (The United Kingdom Companies Act 2006 has attempted to expand the definition of 'best interests' by allowing company directors to take into account a broader array of factors - including, in theory, environmental and other social issues. However, and this is a discussion for another time, it may be argued that this is merely to enshrine the established, conservative, position). This would allow companies to pursue low- or no-growth agendas without risking indictment.
Provided that the above strategies succeeded in degrowing the economy, obvious consequences loom: there will be a greatly diminished need for resources, products and services - a greatly diminished need for workers; for people.
The government will need to respond, and here are three starting points: firstly, establishing a basic income for all citizens to ensure decreased earnings don't result in destitution; establish a four-day workweek by implementing penalty rates for any more than four days worked per week to encourage job-sharing; and develop training schemes designed to transition workers in industries hardest hit (say, manufacturing) to more sustainable vocations (say, IT). People will have, on the whole, less money; but to evoke Henry Thoreau, superfluous wealth can buy superfluities only.
We've shown ourselves to be a resilient people, capable of overcoming the adversities presented by radical changes to previously common industries. Solutions come most readily in the darkest moments, and we should not be so pessimistic to think that a less consumeristic society will result in underemployment and poverty.
I hope if you've come this far with me, you've been brave enough to consider the possibility that economic growth is a danger to us all. We can no longer say so readily that economic growth is good in and of itself, and must begin to honestly asses its incompatibility with our long term survival.
Some will dismiss degrowth as simply too difficult to achieve in our current system, but its importance is hard to rebut. And it is worth remembering two things: growth can still be qualitative even if it is not quantitative, and it need not be forever, ultimately transitioning to a steady state economy.
It is a truth universal that a small impact can knock even a large object out of its orbit. That is the principle upon which attempts at degrowth must be founded: people agitating for represented officials to make slight changes, well within their powers, that have profound consequences. These ideas have only been suggestions, but that in itself suggests that there is no limitation to the many means by which we may prosper.