by Rob Dietz
Here is a point in time where our institutions are wrong. Our economics is not fit for purpose. The outcomes of this economic system are perverse. But this is not an anthem of despair. It’s not a place where we should give up hope. It’s not an impossibility theorem. The impossibility lives in believing we have a set of principles that works for us. Once we let go of that assumption anything is possible.6
This book tries to provide a new set of principles that can work for us. We don’t want to mislead you into thinking we have a precise set of directions for fixing everything that’s wrong with the world—after all, the economy and the ecological systems that contain it are highly complex. We do, however, have an economic plan that can help move humanity toward a better future where sustainable and equitable human well-being is the goal, not economic growth. Successful implementation of this plan rests on three requirements:
1. Widespread recognition that our planet is finite. Humanity (along with all the other species here) draws life and comfort from a limited pool of resources. Recognition of this fact requires us to change the way we regard our relationship with nature, especially within our economic institutions.
2. Practical policies for achieving a steady-state economy. A set of well-conceived steady-state policies can replace and outperform the obsolete growth-oriented policies in use today. But people need a strong sense of these new policies before they’ll be willing to embrace them.
3. The will to act. The economic changes that are required won’t materialize on their own. We must dismantle the prevailing institutions and policies that have produced a destructive and unfair economy. At the same time, we must initiate and nurture the required changes.
This book is organized around these three requirements. If you’re already on board with the first one, you may recognize some familiar ideas in the next two chapters. Even so, it’s worth spending some time considering the problem of “too much” before jumping to the solution of “enough.” But the purpose of this book (in fact, the feature that sets it apart from others) is to describe how to establish a prosperous yet nongrowing economy. This is not a book that focuses on problems while relegating solutions to the last few pages.
That said, Part I, Questions of Enough, is more about why than how. It’s where we summarize some of the scientific evidence that condemns the pursuit of continuous economic growth. Part I also considers what constitutes desirable levels of population and consumption, and then makes the turn toward how by describing the defining features of a steady-state economy.
Part II, Strategies of Enough, provides solutions—an escape route from the perpetual growth trap described in Part I. It’s the part of the book that explains how, in a steady-state economy, we can:
• Limit the use of materials and energy to sustainable levels.
• Stabilize population through compassionate and noncoercive means.
• Achieve a fair distribution of income and wealth.
• Reform monetary and financial systems for stability.
• Change the way we measure progress.
• Secure meaningful jobs and full employment.
• Reconfigure the way businesses create value.
Taken together, the policies described in Part II form an agenda for transforming the economic goal from more to enough. But these policies will sit on the shelf unless we can gain extensive support for, and concerted action toward, achieving an economy of enough.
Part III, Advancing the Economy of Enough, provides the call for action. This part of the book contains ideas for moving past the culture of consumerism, starting a public dialogue about the downsides of growth and the upsides of a steady-state economy, and expanding cooperation among nations. All this discussion leads up to the presentation of an economic blueprint that summarizes the components and steps needed to build a steady-state economy.
This blueprint offers hope at a time when we need it most. It provides a viable way of responding to the profound environmental and social problems of our era. The ever-present drone of what we can’t do has become both tiresome and unproductive. The time has come to figure out what we can do. We can build a better economy. We can meet our needs and care for the planet at the same time. We can live balanced lives, including time for the occasional game of checkers. This is our checkerboard, after all, and we don’t have to play by the old rules anymore. Let’s get to it. Enough is enough.
[ CHAPTER 2 ]
WHY SHOULD ENOUGH BE THE GOAL?
Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.
KENNETH BOULDING1
To appreciate why an economy based on enough is worth striving for, it is useful to examine the failings of an economy that forever chases more. It’s no secret that the dominant economic philosophy of modernity is more—more people and more production, more money and more consumption. Employees try to earn more income, business managers try to report more revenue on the balance sheet, and politicians try to ensure that the economy churns out more goods and services. On the surface, more seems like a good idea. For an employee, more money can mean financial security; for a business manager, more revenue can result in a promotion; and for a politician, more national income can generate votes in the next election. But if you dig beneath the surface, you begin to uncover the fatal flaws of more.
One person who has dug deeply is Jack Santa-Barbara. The story of his career serves as a personal case study for choosing enough instead of more. After earning a doctorate in psychology and working in academia for a while, he founded Corporate Health Consultants (CHC), a company with a mission to reduce stress on working people and help them improve their mental health. His company succeeded in both achieving its mission and turning a considerable profit. But money was never the motivation for Santa-Barbara. He says, “I’ve taken on work in my career only because I thought it was useful and interesting,” a sentiment that’s supported by his determined pursuit of other interests.2
For example, he made volunteer trips to Nicaragua with International Physicians for the Prevention of Nuclear War, an organization that won the Nobel Peace Prize in 1985. Those trips intensified concerns he had about economic development as practiced in the West. Not one to ignore these concerns, he waded into the literature on sustainable development, including a book given to him by a friend: For the Common Good,3 written by Herman Daly and John Cobb, Jr. Santa-Barbara says, “I had to read it a couple of times. The ideas needed to incubate for a while. That book laid out a radically different worldview.” This worldview is based on themes from the emerging field of ecological economics, which accepts that there are limits to economic growth and questions the dominant philosophy of more.
Santa-Barbara was hooked—he saw promotion of ecological economics as the most useful way he could spend his time. “I wanted to get involved in ecological economics … but CHC was growing like stink, and I couldn’t do both. I knew the business would survive without me, so I followed my passion and took a leap.” He sold CHC, and since then has undertaken projects to help people understand the failings of more and the virtues of enough.
Jack Santa-Barbara made a profound transformation in his own life. He could have followed the path of more and kept growing his business. He could have pursued more money and more prestige, but something told him that path wouldn’t lead to his desired destination. What exactly did he intuit? What’s wrong with the philosophy of more, especially when applied to the economy as a whole?
In the remainder of this chapter, we explore the downsides of continuous economic growth, which fall into two broad categories:
1. Environmental. An economy that forever chases more is destined to fail environmentally as it exhausts natural resources and exceeds ecological limits.
2. Social. Diminishing returns to growth mean that, after a point, more fails to improve people’s lives.
THE ENVIRONMENTAL FAILURES OF ECONOMIC GROWTH
The main problem with purs
uing never-ending growth stems from the fact that the economy is a subsystem of the biosphere. All of the inputs to the economy come from the environment, and all of the wastes produced by it return to the environment. As the economy expands, it consumes more materials and energy, and emits more wastes. But since we live on a finite planet, this process can’t go on forever. Like an inner tube inside a tire, the subsystem can only grow so large compared to the system that contains it.
The size of the economy is typically measured using gross domestic product (GDP). GDP is the total amount of money spent on all final goods and services produced within a country over the course of a year. Since one person’s spending is another person’s income, GDP is also the total income of everyone in the country. GDP functions as an indicator of the overall level of economic activity—of money changing hands. Economic growth, as reported in the media at least, refers to GDP growth, which is essentially an increase in the amount of money changing hands.
A helpful place to turn for a long-term perspective on GDP growth is the work of economic historian Angus Maddison. During his distinguished career, Maddison compiled a remarkable data series on population and GDP starting in the year 1 C.E. and running to 2008. A graph of population and GDP per capita drawn from his data tells a compelling story (Figure 2.1).
For most of human history, the size of the economy was small compared to the size of the biosphere. But over the last hundred years or so, this balance has changed remarkably owing to the increase in the number of people in the world and the growth in each person’s consumption of goods and services.
Between 1900 and 2008, world population increased from 1.5 billion to 6.8 billion people—more than a factor-of-four increase. At the same time, GDP per capita increased from $1,260 to $7,600—a factor-of-six increase. The result is that world GDP increased by an astounding factor of more than twenty-five over the last century, from about $2 trillion to $51 trillion (and this is after adjusting for inflation).4
On its own, an increase in GDP would not be a problem, except that economic activity is tied very closely to energy and resource use. As GDP increases, the economy requires more energy and resources, and produces more wastes. While Maddison’s work provides a picture of the phenomenal growth of GDP, the work of ecological economists provides a picture of the growth in material and energy use that has accompanied it. As a result of GDP growth, humanity now uses eleven times as much energy, and eight times the weight of material resources every year as it did only a century ago (Figure 2.2). And most of this increase has occurred in the last fifty years.5
The connection between GDP and the use of materials and energy raises a subtle but important point. When we discuss “economic growth” in this book, what we’re really concerned with is not GDP growth per se, but the increase in material and energy use that comes with GDP growth. Ultimately, the flow of materials and energy is what impacts ecosystems, not the exchange of dollars and cents (although the latter drives the process).
What is the environmental upshot of this growth? Plenty of evidence suggests that the global economy is now so large that it is undermining the natural systems on which it depends. This evidence presents itself as a wide range of global environmental problems: climate change, biodiversity loss, stratospheric ozone depletion, deforestation, soil degradation, collapsed fisheries—the list goes on.
FIG. 2.1. Global population and GDP per capita have both grown exponentially, with the fastest growth occurring over the last two hundred years.
SOURCE: see note 4.
In a landmark study published in 2009, Johan Rockström and his colleagues at the Stockholm Resilience Centre showed that the economy is placing an excessive burden on the biosphere.6 In reaching their conclusion, the researchers analyzed nine planetary processes that profoundly influence life on earth:
1. Climate change
2. Biodiversity loss
3. Nitrogen and phosphorus cycles
4. Stratospheric ozone depletion
5. Ocean acidification
6. Global freshwater use
7. Changes in land use
8. Atmospheric aerosol loading
9. Chemical pollution
FIG. 2.2. Humanity’s use of materials (including minerals, fossil fuels, and biomass) has increased steeply in the last fifty years.
SOURCE: see note 5.
Where sufficient data allowed, the authors of the study estimated how far humanity could go in altering these processes and still avoid dangerous levels of disruption. They were able to define “safe operating boundaries” for the first seven processes in the list above. A safe operating boundary is a sort of safety threshold—stay below it, and humanity incurs a low risk of abrupt and hazardous environmental change; go beyond it, and humanity faces a high risk. For three of the planetary processes (climate change, biodiversity loss, and the nitrogen cycle), humanity is now exceeding the planet’s safe operating boundary, and by a large margin in some cases (Figure 2.3). The potential consequences are severe: the authors warn that transgressing one or more of the planetary boundaries could lead to catastrophic changes at the continental to planetary scale.7
Other analyses, such as those conducted by the Global Footprint Network, corroborate the Rockström study. The ecological footprint is a measure of how much biologically productive land and water area a population requires to produce the resources it consumes and absorb the wastes it generates.8 According to the latest data, humanity’s ecological footprint is 50 percent larger than global ecosystems can accommodate.9 This situation is called “ecological overshoot,” and it’s akin to living in debt (Figure 2.4). We can only continue to consume at our current rate by liquidating the planet’s natural resources or overwhelming its waste absorption capacities. For example, we can cut forests faster than they can grow back and emit carbon dioxide faster than it can be absorbed by oceans and forests. Although we can behave in this way for a short time, ecological overshoot ultimately depletes the resources on which our economies and societies depend.
FIG. 2.3. Humanity is exceeding the safe operating boundary for three planetary processes: climate change, biodiversity loss, and the nitrogen cycle. Biodiversity loss is so far beyond the safe operating boundary that there’s not enough space to draw it on this chart. Note that the safe operating boundary is measured differently for each planetary process.
SOURCE: see note 6.
Indicators like the ecological footprint and scientific analyses like the planetary boundaries study suggest that the global economy has become too large for the encompassing biosphere. So long as this situation continues, we are risking environmental catastrophe. Even if we manage to avoid environmental collapse, the steady depletion of resources threatens to reduce the long-term carrying capacity of the planet, and with it the capability of future generations to flourish.
FIG. 2.4. Humanity’s ecological footprint surpassed the capacity of global ecosystems to regenerate resources and absorb wastes in the mid-1970s. Since then, we have been living in “ecological overshoot.”
SOURCE: see note 9.
This unsettling state of affairs is causing some well-known advocates of economic growth to question their long-held views. Robert Solow, who won the Nobel Prize in economics in 1987 for his theories on economic growth, has said, “It is possible that the United States and Europe will find that, as the decades go by, either continued growth will be too destructive to the environment and they are too dependent on scarce natural resources, or that they would rather use increasing productivity in the form of leisure.”10 Economic journalist Thomas Friedman questions growth further. He asks, “What if the crisis of 2008 represents something much more fundamental than a deep recession? What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall—when Mother Nature and the market both said: ‘No more.’”11
The final year of Angus Maddison’s dataset (2008) coincid
ed with the implosion of the global financial system. Since that time GDP has stumbled on its upward march. And although it’s too soon to discern whether the long-term trend has changed, more and more analysts are suggesting that substantial economic growth in the future may not be possible.
Richard Heinberg is one such analyst. He is a fellow of the Post Carbon Institute and one of the world’s foremost experts on both the state of energy supplies and the history of energy use. He believes that the age of economic growth is over, the victim of three converging crises: (1) the depletion of fossil fuels and other critical resources, (2) the snowballing costs of environmental impacts, and (3) the inability of financial systems to adjust to the new reality.12 In his book The End of Growth, he explains each of these crises in detail, but he focuses most intensely on oil depletion as the limiting factor for economic growth.
Why is oil depletion so important? A growing economy, with all of its individual sectors—from transportation to agriculture to manufacturing to financial services—requires supplies of cheap energy, and oil has fit the bill for decades. But the fact is, we’re using it up. We’re not on the verge of running out, but we have entered the era of peak oil production, a situation in which Exxon Mobil, BP, Shell, and other oil companies are unable to meet rising demand. The cheap and easy oil fields have been exploited. Now we’re stuck with trying to wrest oil from places that require serious feats of engineering and carry significant risks. As a result, the price of a barrel of oil is susceptible to major price swings, and these swings produce cascading volatility in the rest of the economy.
