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Gordon Brown calls for global growth pact

December 6, 2010

Gordon Brown disappeared from public life after the election, concentrating on being a good backbench MP, and on writing a book on the financial crisis. Beyond the Crash is now being trailed, and there’s an excerpt in the papers today.

In it, he calls for a global growth pact to secure recovery and ensure ongoing economic growth.

Stronger, more sustainable growth will not happen just by hoping for Asian consumer spending to rise. Nor from simply hoping for private investment to recover swiftly and strongly. It will require an agreement among the economic powers of the world, bigger, more imaginative, and more lasting than even the Marshall Plan for Europe: a constantly updated plan for economic growth.

He also calls for “a new academic discipline of global growth economics”. I’m calling for that too, but I don’t think we mean the same thing.

Enough is Enough: a report from the Steady State Conference

November 17, 2010

Earlier this year I attended the Steady State Economy conference in Leeds, organised by CASSE and Economic Justice for All. It was a fascinating day of talks and seminars. Part of the aim was not just to come together to hear some interesting speakers, but to contribute to the debate too. Workshops on various areas of policy were recorded and ideas pooled, and the result is Enough is Enough: Ideas for a sustainable economy in a world of finite resources.

CASSE’s Brian Czech describes the report as “the single most complete collection of steady state policy initiatives, tools, and reforms in the literature. That alone makes the report worth its weight in steady state gold.”

Browsing it this morning, it’s certainly a valuable contribution to making the steady state economy more visible, showing what it looks like and how we get there. I was pleased to find a couple of my ideas made the cut too.

You can also watch videos of all the presentations on the CASSE website.

A forest of exponentials

November 17, 2010

We believe that an exponentials analysis can alone explain an impending collision between an economic system which, by its nature, must grow, and a finite resource set which, ultimately, cannot grow. When this collision eventuates, it is likely to be one of the most important changes in the lifetime of anyone reading this report.

The aforementioned report, somewhat intriguingly, is from city brokerage firm Tullett Prebon. Dangerous Exponentials is their latest strategy briefing, and it argues that the economy faces a ‘forest of exponentials’. The money supply, energy use, and population are all rising at unsustainable curves.

Very wrong for a very long time

November 10, 2010

As limits to economic growth become more binding, the economists who made their reputations by pushing economic growth as panacea become uncomfortable. Indeed, were basic growth limits recognized, very many very prestigious economists would be seen to have been very wrong about some very basic issues for a very long time.

Herman Daly on why steady state economics has been ignored for 40 years.

UN: Development is possible without growth

November 8, 2010

The UN released it’s latest Human Development Report (pdf) last week. It’s the 20th year they’ve produced the report, and it shows nothing but progress on the Human Development Index, the report’s metric of wellbeing composed of income, life expectancy and literacy rates. This is something they quite rightly celebrate, before exploring the changes in a variety of ways. There are new tools to break the HDI down to show inequality, and some interesting conclusions on economic growth.

If you compare changes in the HDI and in GDP per capita, you get a strong correlation – but then a third of the HDI is income, so that’s not surprising. The graph below right shows schooling and health without the HDI’s income component. Comparing this with GDP per capita over time, “the correlation is remarkably weak and statistically insignificant”, to use the report’s own words.

There are a variety of reasons for this. One is that there is a lag as rises in income translate into improvements in healthcare and education. And once countries are developed, there are fewer gains to be had in wellbeing. As technologies and new medicines filter down, it’s cheaper for poorer countries to adopt them than it was for those who developed them, meaning income is less important.

Nevertheless, the Human Development Index includes countries where income growth has stalled, but gains in wellbeing have still been made. “If economic growth was indispensable for progress in health and education, countries with falling GDP would not beprogressing in health and education” says the report. “But this isnot the case: Iran, Togo and Venezuela experienced income declines, yet their life expectancy has risen an average of 14 years and their gross school enrolment an average of 31 percentage points since 1970.”

That doesn’t mean that income is unimportant of course – rising incomes bring all kinds of benefits, and very poor countries need to grow. But it does show that economic growth is not essential for providing good lives, even in developing countries. This really ought to have consequences for our policy making:

“Much development policy-making assumes that economic growth is indispensable to achievements in health and education. Our results suggest that this is not the case. This does not mean that countries can forget about growth—we have underlined that growth generates important possibilities. Rather, the results imply that countries do nothave to solve the difficult problem of generating growth in order to tackle many problems on the health and education fronts. This is good news.”

I’ll second that. It is good news for developing countries, and even better news for richer ones who have grown as much as they need to. Unfortunately the UN report doesn’t press this point. Having observed that growth isn’t essential even for poorer countries, it still doesn’t waver from the ‘growth is good’ mantra. Get to the section on sustainability, and all the solutions are around de-coupling growth from environmental impact, rather than asking if we actually need more growth:

“The main threat to maintaining progress in human development comes from the increasingly evident unsustainability of production and consumption patterns. Current production models rely heavily on fossil fuels. We now know that this is unsustainable—because the resources are finite and their impacts dangerous. The close link between economic growth and greenhouse gas emissions needs to be severed for human development to become truly sustainable.”

Yes, or…

(cross-posted at The Earthbound Report)

Goals that cancel each other

November 3, 2010

The leaders of nearly all governments of the world – and their opposition leaders – exhibited similar internal conflict and timidity in Copenhagen. Even those with true desire to cut carbon felt that their priority was to also stimulate economic growth for their own industries, at all costs. Without growth, big businesses die, and so do national economies, and jobs. The whole system is threatened. That’s really all anyone talks about now….

Without ever-expanding resources, ever-expanding production and consumption, our economic growth model becomes a relic, instantly obsolete. But so far, no one in leadership roles (with one or two exceptions, as we will see) is admitting to that. If they know it, they’re too scared to say so.

Jerry Mander on ‘climate change vs capitalism’ for The Guardian

The bounds of human flourishing

November 1, 2010

“The mantra of economic growth has become so deafening that it takes precedence over everything, including older and more natural forms of growth. Unending economic growth is unnatural in several ways. First of all, nothing in nature grows for ever; growth towards maturity is followed by decay. Uncontrolled, unlimited growth, in physiological terms, suggests the pathology of the cancerous tumour.

As a bunch of unfashionable economists has been pointing out for decades, there is a mismatch between the idea of unending growth and finite resources on a finite planet.”

Harry Eyres for the Financial Times, who concludes by wondering if it’s time for us to “return to an older idea of growth, according to which we submit to the natural ebbs and flows which are the bounds of human flourishing.”


Cameron going for growth… and wellbeing?

October 25, 2010

David Cameron has spoken critically in the past about GDP and its limits, suggesting that we ought to develop ‘national accounts of wellbeing’. We haven’t heard anything about it for quite some time, but in a speech to the Confederation of British Industry today he dropped a hint:

In the weeks ahead, we will be setting out how we will bring a new emphasis on well-being in our national life, and how we will work with business to spread social and environmental responsibility across our society.

Interesting words. However, today’s event was all about growth. In a statement that echoes Gordon Brown’s promise that going for growth would be “the government’s number one priority”, Cameron assured business leaders that a “forensic, relentless focus on growth is what you will get from this government.”

No surprises there perhaps. I also noted this little passage:

Right now, every part of government is thinking about what it can do to support growth from environmental regulation to local government through better incentives for development so let us know what you think, give us your ideas.

Every part of government? The role of environmental regulation is to support economic growth? That may the most backwards statement of the year from the man who promised us the ‘greenest government ever’.

The Plan 2050 lectures, Sheffield

September 26, 2010

If you’re in or near Sheffield, this looks like a great series of lectures.

The Economy: Servant or Tyrant?

The Case for Zero Growth: Thursday 14 October: Chris Brazier: co-editor of New internationalist. Cathedral 7pm.

Moving Towards a No Growth Society: Thursday 21 October: Saamah Abdallah, New Economics Foundation. Cathedral 7pm.

A Truly Human Economy: Thursday 11 November: Tarek El Diwany & Bishop Peter Selby. Town Hall 7pm.

The Power of Community: Thursday 18 November: Stephanie Bradley, Transition Towns. Cathedral, Campo Lane entrance. Film ‘The Power of Community’ 5.30 – 6.30pm. Lecture 7.00p.m.

More details from Sheffield is my planet.

Tickets: £3 per lecture (Con. £1.50), all three lectures £10 (Con £5) available by post from: J Alder, Diocesan Church House, 95-99 Effingham St, Rotherham S65 1BL (enclosing S.A.E. and cheque made payable to ‘Sheffield Diocesan Board of Finance’). Tel 01709 309133; or in person from the Blue Moon Café, St James Street, Sheffield.

Downshifting the global economy

September 19, 2010

I think the author drastically overestimates the influence of ‘ecofascism’ as he describes it, but Micah White is proposing the right alternative:

Humanity can avert climate catastrophe without accepting ecological tyranny. However, this will take an immediate, drastic reduction of our consumption. This requires the trust that the majority of people would voluntarily reduce their standard of living once the forces that induce consumerism are overcome.

The future of environmentalism is in liberating humanity from the compulsion to consume. Rampant, earth-destroying consumption is the norm in the west largely because our imaginations are pillaged by any corporation with an advertising budget. From birth, we are assaulted by thousands of commercial messages each day whose single mantra is “buy”. Silencing this refrain is the revolutionary alternative to ecological fascism. It is a revolution which is already budding and is marked by three synergetic campaigns: the criminalisation of advertising, the revocation of corporate power and the downshifting of the global economy.

Read the article, The alternative to the new wave of ecofascism.