In the Ottawa Citizen’s strangely named “Business” section, Peter Victor argues against economic growth. It’s a common argument in my circles, but not one typically espoused at a CanWest newspaper.
If we choose to rebuild our shattered economies, a return to the blind and obsessive pursuit of “economic expansion” isn’t just impossible, but also disastrous and self-destructive.
Times have changed. We’ve destroyed and are destroying our ecological supports, have run out of cheap energy, of water, of accommodating atmosphere, have built an empty financial system based on deceit and corruption, and have seen genuine measures of well-being fall since the 1970s.
Key to these civilizational failures is the West’s belief that all problems can be solved through limitless expansion of the economy at any cost.
Victor argues it is time for a rethink and it is refreshing to read the argument in a major commercial daily.
The way out, he says, is to look to the rather ignored field of “ecological economics.”
Ecological economists understand economies to be subsystems of the earth ecosystem, sustained by a flow of materials and energy from and back to the larger system in which they are embedded. It is understandable that when these flows were small relative to the earth they could be ignored, as they have been in much of mainstream economics.
[The] mainstream perspective teaches that if resource and environmental constraints are encountered, scarcities will be signalled by increases in prices that will induce a variety of beneficial changes in behaviour and technology. Should this system of scarcity-price-response fail then economists can estimate “shadow” prices which can be imposed directly through taxes or used indirectly through policies based on cost-benefit analysis to fix the problem.
To ecological economists, this is an inadequate response to the myriad problems of resource depletion, environmental contamination and habitat destruction confronting humanity in the 21st century. They question the pursuit of endless economic growth and contemplate a very different kind of future.
To visualize this in practice, he offers examples from his own work and action being taken elsewhere.
I have examined whether and under what conditions a country like Canada could have full employment, no poverty, much reduced greenhouse gas emissions, and maintain fiscal balance, without relying on economic growth. Using a comparatively simple model of the Canadian economy I have explored scenarios in which these objectives are met. The ingredients for success include a shorter work year to reduce unemployment yet retain the advantages of technological progress, a carbon price to discourage greenhouse gas emissions, and more generous anti-poverty programs.
In such an economy, success would not be judged by the rate of economic growth but by more meaningful measures of personal and community well-being. We would adjust to strict limits on our use of materials, energy, land and waste, guided by prices that provide more accurate information about real rather than contrived scarcities. We would enjoy more services and fewer but more durable and repairable products, and we would value use over status when deciding what to buy.
Rampant consumerism would be history, advertising would be more informative and less persuasive, and new technologies would be better screened to avoid problems to be fixed later, if at all. Infrastructure, buildings and equipment would be more efficient in their use of energy and we would think and act more locally and less globally. With more free time at our disposal we would educate ourselves and our children for life not just work.
While that’s a pretty high-level summary of how an ecologically-minded economy would be experienced it’s far more appealing than anything I’ve heard from a policy-maker since the crisis manifested.
So why is there such a mechanical rejection of this when it hits legislators, candidates, or city councillors? Or the most corporate media?
The status-quo isn’t acceptable, nor is it even possible. There is an opportunity to adjust voluntarily and positively. If we deny the world as it is and as we have made it, our adjustment will be involuntary and much more unpleasant.
Bigger isn’t better – Ottawa Citizen
