Supply Shock Reveals a Serious Problem: Economic Growth

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Supply Shock is a gutsy new book about a major taboo in our culture: economic growth. Economic growth is the real third rail of American politics. Question it and you are immediately branded an outsider (or even a Marxist). Who doesn't want a rising tide that lifts all boats? And bigger is always better, right? Well, this is a good question to ask, and author Brian Czech bravely asks it, and many others.

Have you noticed that the "invisible hand" has been shoving a lot of people around lately? One reason may be the "supply shocks" caused by the economy reaching or exceeding the sustainable limits of many of the non-valued natural capital inputs that drive the economy, from water to fisheries to oil. Economic growth underlies so many ecological problems, but really, they can be summed up as one, singular ecological-economic problem. Supply Shock tells the story of how blinders were put on neoclassical economics allowing elites to drop the planet out of their calculations of cost and benefit. After "forgetting" to value natural capital, they feel free to plunder to the point of ecosystem collapse.

Many people look to technology to save the day, but Czech is critical of that approach. He reveals a Catch-22: technological progress is needed for economic growth, but can only come about through prior economic growth (using previous technology), which is what created the problems in the first place! This growth-technology loop becomes a never-ending spiral up and over the limits to growth. There is a way out of this Catch-22, but it's not manna from heaven and it doesn't reconcile economic growth with environmental protection. This I leave readers to glean from their own reading of Supply Shock.

Czech prefers a more holistic solution: "steady state" economics. This is not about making the economy "less brown" by just adding a recycle label to the back of your corporation's annual report, planting a few trees on Earth Day, or changing out a light bulb or two. It is a reframing of our political economy from the false vision of an infinitely expanding upward arrow (that in reality crashes every few years with terrible social consequences) to a steady state economy that creates sustainable livelihoods within the means of the planet's ecological limits. This is not pie-in-the-sky utopian fantasy, it is grounded in serious economic history and natural science.

Czech cautions against jumping too quickly to "what we can do" before fully absorbing the implications of the problem of growth and the solution of the steady state. He wants to build a broad movement for a steady state economy first. Once that movement is big enough, then a whole set of policies will follow, and have a chance of being adopted in our democracy with its checks and balances. If not, we may be "putting the cart before the horse" as he says in Part Four.

As many ecological economists know, it is a challenge to cultivate and preserve a non-growth-oriented mindset in our consumer-oriented society. Supply Shock is countercultural, in the sense that it provides a direct counterpoint to a television set tuned to CNBC or the local news' fixation on the Dow Jones Index, or browsing a few articles in the Wall Street Journal or Forbes.

Humans understand the world through metaphors, and in American culture, up is good, and down is bad. That sets up a potential communications barrier for advocates of the steady state economy. Supply Shock provides readers with historical, scientific, socio-political understanding that will overcome this barrier, and perhaps turn your world upside down.

Note: Mike Sandler has worked as a consultant for the Center for the Advancement of the Steady State Economy (CASSE). Brian Czech is CASSE's founding president.