PROSPERITY WITHOUT GROWTH

Over the last 18 months during which the credit crunch has dominated our thinking, many people have expressed the view that business as usual is not an option, pointing out that we have a climate crunch and a nature crunch on our hands as well. So simply getting the existing system back up and running is insufficient. However, old habits die hard, and this is just what seems to be happening – without any regard to the long-term validity or viability of the existing economic framework and the assumptions on which it is based. These five books all address the wider issue of the relationship between economic, social and ecological systems, calling for new thinking and appropriate economic policies. Before plunging in, readers should remind themselves that the new economics has been written about for nearly 40 years, starting with EF Schumacher in the early 1970s, then James Robertson's Sane Alternative in 1978, followed by his books Future Wealth and Future Work. It was James who was instrumental, along with others like Paul Ekins (his Living Economy came out in 1985) who helped set up The Other Economic Summit (TOES) in the early 1980s and subsequently the New Economics Foundation; the work of Hazel Henderson has also been significant.

The dilemma of growth is expressed by Tim Jackson, economics commissioner at the Sustainable Development Commission, whose book is based on a report of the same title that came out last summer. I understand that the Treasury insisted on a question mark after the Report title , which has been removed in the book. Our current idea of prosperity is based on material consumption and economic growth, which is unsustainable in its current form, even before taking into account the enormous inequalities inherent in the system. However, when this growth falters, 'de-growth' or recession is unstable since declining consumer demand leads to rising unemployment. So we have a Hobson's choice between unsustainability and instability. An additional element of instability is the enormously high levels of consumer and government debt, which is subject to periodic crises of confidence. It is not surprising that governments focus on economic growth and its drivers of novelty and consumerism as a means towards rising prosperity out of which social expenditure can be funded. The short-term framework of capitalism, lobbies and the democratic electoral cycle reinforce this kind of thinking. And yet, as Jackson and the other authors point out, this trajectory of growth – or more strictly speaking volume of economic throughput – cannot continue indefinitely. On a more technical note, he shows how decoupling economic growth from ecological impact, whether relative or more drastically absolute, is unlikely to happen – this is an orthodox 'solution' to the growth dilemma.

This brings up two imperatives: resituating the economic subsystem within the ecological system that sustains it, and redefining prosperity as more than increase in material consumption. Many readers will be familiar with data showing that wellbeing or happiness does not increase at the same rate as economic growth beyond a certain level of income. So a wider definition of prosperity includes the quality of our relationships, health, environment, community and job satisfaction along with one's overall financial situation: hence the need for new quality of life indices to replace GDP. Having said that, many developing countries do need to grow economically to reach anything like Western living standards; the problem here is that we would need at least four planets for this to be possible. Jackson outlines the variables of an ecological macro-economics which combines economic stability with the need to remain within ecological limits. This will involve sharing work and a good deal of ecological investment to enhance resource efficiency; also limits on carbon and an index of the resource dependency of the economy. These two imperatives can be summed up as flourishing within limits – physically, psychologically and socially.

What Jackson calls the social logic of consumerism is driven by the production and consumption of novelty and emulation of conspicuous consumption. Until now, for reasons given above, this trend has been reinforced by governments, who have tended to lose sight of their role as custodians of longer-term public goods as opposed to short-term private interests. Government itself is caught in the dilemma of growth. However, as Jackson reminds us, citing the work of Shalom Schwartz, human values and motivation are a balance between altruism and selfishness, which governments should take into account. He puts forward a raft of possible policy measures necessary in order to make a transition to lasting prosperity and a sustainable economy. Summing this up, he proposes establishing ecological bounds on human activity, fixing the illiterate economics of relentless growth and transforming the damaging logic of consumerism. Nor should one forget the imperative of global equity and consider these issues solely from a Western European perspective. This magnifies the challenges a hundredfold when one considers what needs to be done in terms of stark choices to meet carbon emission targets and achieve even minimal economic prosperity for an ever-increasing global population. If you only read one of these five books, this has to be it.

David Boyle and Andrew Simms provide an accessible introductory overview to the new economics with Ruskin's motto 'There is no wealth but life.' They tackle the problems of economic indices and measurement, money and markets, resources, energy and climate, trade, community and debt. Inequality has continued to grow, while the winners in the system are burdened by rising debt and experience increasing levels of stress and mental ill health. Wealth is more than money and has to include health, personal development and social wellbeing, as the other books also point out. They make many useful policy suggestions. Molly Scott Cato is Economics Speaker for the Green Party and provides a personable introduction to Green Economics as a system aiming at balance rather than growth. She explains its history, values and theory, its vision for work, money and business, then policies for a Green economy, including globalisation and trade, taxation, welfare, land and the re- localising of economic relationships, a theme that also comes up elsewhere in discussions of the conflict between processes of globalisation and 'glocalisation', of which the transition town movement is an excellent example. This offers greater community cohesion and conviviality, helping build up the loss of social capital. A Renewable World is a comprehensive report for the World Future Council covering renewable energy, climate, carbon, the green collar economy and the renewal of cities. It is particularly strong on energy, giving fascinating examples of policies already implemented in Germany, including an illustration of cities like Dardesheim which are already running on 100% renewable energy. There are many inspiring practical examples in the book of how the global Green energy economy can come about, but equally there are warnings about the impending meltdown in Greenland and the Arctic and what they call problem technologies like nuclear power and biofuels. Highly informative, with an excellent executive summary.

Lester Brown will be well-known to many readers as the instigator of the State of the World reports and now as president of the Earth Policy Institute. This is the latest substantially revised edition of the book whose earlier editions I have also reviewed. Plan B is an ambitious and coherently thought through alternative to business as usual consisting of four components: cutting carbon dioxide emissions by 80% by 2020, stabilising global population at 8 billion or lower, eradicating poverty and restoring the Earth's natural systems, including soils, aquifers, forests, grasslands and fisheries. The figure of 8 billion may surprise some readers, but the countries in which much of the projected population increase will occur are already in decline, with many failed states. This plan is an integrated programme with these four interdependent goals, implying a restructuring entailing a fundamental ordering of priorities. The bulk of the book is devoted to analysing the challenges we face, especially in terms of population pressure on land and water, and climate change and energy transition. There are chapters detailing responses to stabilising climate, shifting to renewable energy, redesigning cities, eradicating poverty and stabilising population, restoring the Earth and feeding 8 billion people well. This sounds like a tall order, but Brown gives many examples of what is already happening and proposals for further action.

The key question, addressed in the final chapter, is whether we can mobilise quickly enough. Brown points out that we are in a race between political tipping points and natural tipping points in that negotiations frequently take a very long time and result in compromises suggesting action quite inadequate to the challenges we face. He sees massive change as inevitable, and quotes Peter Goldmark, former president of the Rockefeller Foundation, as saying that the death of our civilisation is no longer a theory or academic possibility, but rather the road we are currently on. Brown proposes three models of social change: the catastrophe model, where a dramatic event fundamentally changes our thinking and behaviour, the Berlin Wall model, with an extended period of gradual change, and a sandwich model where there is strong grassroots pressure supported by equally strong political leadership. Wartime mobilisation is unlikely except for the catastrophe so we are left with each of the other two possibilities. It is sobering to learn that the annual Plan B budget is only $187 billion a year, or 13% of annual global military expenditure. This is a useful feature for campaigners to bear in mind. Readers can download the whole book free from www.earthpolicy.org where they can also sign up for electronic updates, which I myself for some time.

So we have the necessary information and models for a new economics and a coherent proposal for restoring the Earth, and we know that they must be applied sooner or later. The question is when and under what circumstances. In the meantime these books serve to inform and enable readers to grasp the situation and bring pressure to bear on elected representatives to take note and modify their policy proposals accordingly.