Unfurling the Banner at the Steady State Herald

~Steady State Herald Premiere~

By Brian Czech

It’s been quite a run with our CASSE blog, the Daly News. Regular readers will recall a consistent weekly column from March 2010 through late 2015. Then for a couple years it was hit-or-miss, for reasons already explained (in a Daly News entry, naturally.) Now we’re back to blogging regularly under a new banner: the Steady State Herald!

Well, almost regularly. We do have a technical glitch to overcome first. The CASSE website has gotten bogged down with old plug-ins, programming bugs, and a generally creaky platform. We must fix it, thoroughly, and that process begins this week. This also means our blog (which happens to be at the center of the technical difficulties) will be static for the time being.

We will notify our subscribers and signatories when we’re rolling again with the next article of the Steady State Herald, most likely before summer is officially upon us. Meanwhile it won’t be such a bad thing for readers, new and old, to reflect a bit on the topics and events we covered with the Daly News. This article should help us do just that.

So as we unfurl the new banner of the Steady State Herald, let’s toot the old horn one last time for the Daly News.

“Daly News” was a play on words for capitalizing on the good name of Herman Daly, the champion of steady state economics. The Daly News was the flagship communications tool for CASSE during our formative stages. We published approximately 246 Daly News articles, with Herman Daly and yours truly penning 60 apiece. Brent Blackwelder wrote 50 more, and Rob Dietz (serving concurrently as CASSE executive director) another 40. We’ve had dozens of guest authors and semi-regular contributions from James Magnus-Johnson (20) and Eric Zencey (15).

With the Daly News, we proved there is plenty of news – not to mention opinion – on limits to growth and/or the steady state economy. Even given that theme, our articles ranged far and wide in style and in substance. We came at our topics from philosophical, theological, ecological, economic, historical, political, sociological, and psychological angles.

We used every tenor from sober prescriptions for public policy to hyperbolic parody. We celebrated anniversaries and we posted obituaries. We covered the terrain from local to global. Through it all, we kept to the tenets of a 501(c)(3), non-profit educational organization. We never lobbied for a candidate, but we sure critiqued a number of them, all across the political spectrum.

We should all – producers and consumers of the Daly News – thank Herman Daly for the privilege of using his name. Those familiar with Herman’s modesty won’t be surprised that he was never comfortable with the moniker. But “Daly News” helped to put us – CASSE and our blog – on the map, especially in the field of ecological economics and in the surrounding, broader terrain of political economy.

With Herman’s name gracing our blog, each new article came out of the starting blocks with the traction of credibility. The name also compelled our authors to take their task seriously and to seek… if not perfection, the best of our abilities and perhaps a more civil discourse. The quality of articles was such that the Daly News was often cross-posted at the request of other organizations. It compelled or provoked many follow-ups; numerous articles still do. The Daly News helped CASSE win the 2011 Best Green Think Tank Award.

So yes, we did capitalize – in the best sense of the word – on Herman’s name. We also recognized some trade-offs from the beginning. One of them was the opportunity cost of not being able to send other valuable signals with the name of the blog. And so we come to the naming of the Steady State Herald.

Naming a blog is a bit like designing a logo. With a logo, you only have so much space, and the image must send a clear and instant message. Ideally it will also pique the curiosity required for further contemplation, and in the process convey additional nuance.

With a blog, you only have so many syllables, and they must send a clear and instant message. Ideally they will also pique the curiosity for further contemplation, and in the process convey additional nuance.

“Steady State Herald” has five syllables and readily rolls off the tongue. It’s a phrase that clearly conveys what our blog is about, especially with the subtitle, “Ushering in the Steady State Economy.” Now it’s true that “steady state economy” is not yet in the vernacular. So, just as some had to contemplate the meaning of “Daly News” (because not everyone knew of Herman), “steady state” won’t instantly connect with everyone. Yet the phrase remains the best thing we have going to convey, very quickly, the concept of a stabilized, sustainable economy. (See how quickly the syllables add up without using “steady state”?)

We’ve analyzed the rhetorical properties of “steady state economy,” as well as the technical and linguistic. We’re committed to using the phrase. We are, after all, the Center for the Advancement of the Steady State Economy. We remain confident the phrase “steady state economy” has the potential to be writ into public policy as well as implanted in the vernacular. We come a step closer, we think, by using the phrase as the very title of our blog.

That said, you can’t just call a blog “Steady State,” or even “Steady State Economy.” A blog is not a state (unless you really want to argue), nor is it an economy. So what else could you call it? We considered many examples, and among them were:

  • Steady State Times
  • Steady State Chronicles
  • Steady State Gazette
  • The Steady Statesman
  • The Steady Statement

You get the picture. We thought of the usual suspects; the news-papery nouns to couple with “Steady State.” We considered a few minor plays on words, too. We ultimately chose “Herald” as the proper coupling.

We’d all be happier if “Chronicles,” for example, was the appropriate coupling. Such would be the case if there was enough public awareness about limits to growth. Things would be happening toward steady-state policy reform and steady statesmanship in international diplomacy, and these happenings would warrant chronicling.

Unfortunately the vast majority of citizens haven’t connected the dots from biodiversity loss, pollution, climate change, noise, congestion – and many other indicators of illth– back to GDP growth. It may be the case that the majority doesn’t even recognize some of the indicators themselves. That seems to be true of climate change, for example, which happens so slowly (so far) as to escape the notice of casual citizens. The human race has become the frog in the metaphorical pot, oblivious to the perils of perpetual economic growth.

So we need a herald to awaken our fellow frogs from their slumber. This herald can’t be just another big mouth. He or she – or it, in the case of a blog – isn’t going to help matters by shouting oxymoronically for “green growth” or belting out a chorus of Kuznets Curve Kumbaya. Some people like to complain about “Cassandras,” but we think it worse to live in an age with so many Pollyannas. Certainly it’s a dangerous world when naïve notions of perpetual GDP growth prevail in the midst of melting ice caps, the Sixth Great Extinction, and the Anthropocene in general.

Let’s also recall that Cassandra was always right – never wrong – with her warnings to the Trojans. Her only curse was that no one believed her. If there were fools in this mix, Cassandra wasn’t one of them. The Pollyanna, on the other hand, is disastrously wrong. Her naïve “optimism” leads others astray, right down the path of least resistance.

So we eschew simplistic notions of “positive” messaging. We’re not optimists, pessimists, or notionists at all. We are, first and foremost, realists. We understand limits to growth, and we know we must do the yeoman work of rowing upstream in the river of political economy. We’re equal parts Cassandra, David, and Paul Revere. We won’t suffer Pollyannas, we’ll fight Goliath, and we’ll awaken you with our warnings. We ask only that you spread them, because we long for the day the Herald may be aptly renamed the Chronicles, Times, or Gazette.

Stay tuned for the blogroll of the Steady State Herald…

 

 

Setting Things Straight for the Steady State

By Brian Czech

Editor’s Note: The forthcoming A Future Beyond Growth (Routledge, 2016), edited by Haydn Washington and Paul Twomey, explores the vision and process for moving toward a steady state economy. This edited volume stemmed from the Australian Academy of Science’s 2014 Fenner Conference on the Environment. Haydn is the co-director of the New South Wales chapter of CASSE. The following is Brian Czech’s foreword to “A Future Beyond Growth.”

Brian CzechExtremely dangerous political rhetoric has proliferated over the past several decades, seducing the masses onto a path that leads to the destruction of nature and civilization. This rhetoric is centered on the claim that “there is no conflict between growing the economy and protecting the environment!” Politicians are all about economic growth but, at the same time, none of them want to be seen as willful destroyers of the environment. Therefore they stretch, warp, and corrupt the truth with the win-win rhetoric that we can have our cake and eat it too.

Such is the world that CASSE—the Center for the Advancement of the Steady State Economy—was born into on May 1, 2004. In fact, the win-win rhetoric about growing the economy while protecting the environment was the primary impetus for establishing CASSE. The CASSE position on economic growth sets the record straight that “there is a fundamental conflict between economic growth and environmental protection,” leading up to this fact with seven “whereas” clauses and following it with eight other “therefore” findings.

Those having a counter-reaction that “there doesn’t have to be a conflict; it’s not a fundamental conflict” should read the full CASSE position. The fundamentality of the conflict between economic growth and environmental protection stems from the first two laws of thermodynamics. “Laws of thermodynamics” might sound intimidating to the uninitiated, yet the first two laws can be summarized in such common-sensical terms as: Law 1) You can’t get something from nothing; Law 2) You can’t be 100% efficient in the production process. These laws set up a limit to economic growth, as well as the fundamental conflict between economic growth and environmental protection, as evidenced most clearly by the erosion of biodiversity in lockstep with economic growth.

Haydn1

Haydn Washington, co-editor of A Future Beyond Growth and co-director of the NSW chapter of CASSE, speaking at the Australian Academy of Science’s 2014 Fenner Conference on the Environment. Photo Credit: Anna Schlunke.

So read the CASSE position, and read this book. While the relationship between economic growth and environmental protection is not an overly simple matter, the key points are readily grasped by sober readers, with the benefit of a clearly written book such as A Future Beyond Growth.

Among the 13,000 signatories of the CASSE position are some of the world’s leading sustainability thinkers, including authors of A Future Beyond Growth. Over 200 organizations have endorsed the position. Despite growing support for its central position, CASSE has been David to the Goliaths of Wall Street, neoclassical economics, and mainstream politics worldwide. Economic growth remains the top domestic policy goal among nations and lesser states as well, even as it causes more problems than it solves in the 21st century.

Of course if you’re going to be a responsible critic of economic growth, much less a long-lasting one, you better have an alternative to offer. Fortunately it is easy to identify the basic alternatives to growth. There are but two: economic degrowth and the steady state economy. The best way to summarize the alternatives is with a reminder of what, precisely, is meant by “economic growth.”

Economic growth is simply increasing production and consumption of goods and services in the aggregate. It entails increasing population and/or per capita consumption. Economic growth is indicated by increasing gross domestic product, or GDP. It entails higher demand for materials and energy, because “you can’t get something from nothing.”

Economic growth should be distinguished from “economic development,” which refers to qualitative change regardless of quantitative growth. For example, economic development may refer to the attainment of a fairer distribution of wealth, or a different allocation of resources reflecting the evolution of consumer ethics.

Degrowth, then, is simply defined as decreasing production and consumption in the aggregate, as indicated by decreasing GDP. Decreasing population and/or per capita consumption is required. The word “degrowth” tends to have political connotations in addition to meaning a smaller economy, especially in Western Europe where the degrowth movement originated as “La Décroissance.” (Frankly, “economic growth” also has marked political connotations, but society has gotten numb to them.) As with economic growth, degrowth in the sense of a shrinking economy is ultimately unsustainable.

The sustainable alternative to unsustainable growth and degrowth is the steady state economy, which has stabilized production and consumption of goods and services in the aggregate. “Stabilized” in this context means mildly fluctuating. A steady state economy has stabilized population and per capita consumption. Energy and material demands are gradually stabilized—in the aggregate and per capita—as the limits to productive efficiency are reached. All else equal, a steady state economy is indicated by stabilized GDP. The “all else equal” (as I described in Supply Shock: Economic Growth at the Crossroads and the Steady State Solution) includes level of technology, inflation, the propensity to use money relative to other means of exchange, and environmental conditions. But the bottom line, so to speak, is that GDP is a fine indicator of one thing: the pure size of the economy. Which makes it a good indicator of one other thing: environmental impact.

Obviously the pursuit of a steady state economy invokes a thousand devils in the details of political and cultural reforms. Macroeconomic goals, tax codes, budgets, interest rates, terms of trade: these are some of the aspects of statecraft to be dramatically overhauled with steady statesmanship. In the private sector, what about the sociology of consumption? Imagine the attitudes toward conspicuous consumption in a world that finally gets it about limits to growth.

A basic measure of justice, with an equally basic measure of logic, suggests that the place to start in moving toward a steady state economy on Earth is with the wealthiest nations. Impoverished nations need economic growth, almost by definition. We all know who the wealthiest nations are—look for example at nighttime lighting imagery—and concerned citizens from these countries have helped raise awareness of the perils of pursuing perpetual growth.

Which brings us back to CASSE, the uphill-fighting, philanthropically disadvantaged, non-governmental organization with the mission of advancing the steady state economy, with stabilized population and consumption, as a policy goal with widespread public support. CASSE is almost entirely a volunteer organization. Its “business model” should be referenced in quotes, as “business” tends to connote things like money, salaries, contracts, and related financial features that are rare in the context of CASSE. But CASSE has a volunteer model that includes international chapters unified by the CASSE position on economic growth.

CASSE’s New South Wales Chapter, led by Haydn Washington and Anna Schlunke, has demonstrated the potential of this volunteer model. When they invited me to give the keynote address at the Australian Academy of Science’s 2014 Fenner Conference (the AAS’s annual environmental conference), with the conference’s theme being the steady state economy, I had to check if it was April Fool’s Day. To convene a major academy on the steady state economy in the United States, where Big Money calls the shots even in “academic” affairs, would have been inconceivable. The fact that the CASSE New South Wales Chapter (and its partners) managed to deliver the goods on a national academy conference for the steady state economy says a lot about the New South Wales CASSE chapter, the Australian Academy of Science, and even Australia itself.

What exactly does it say? For starters, it says Haydn Washington and Anna Schlunke are diligent scholars, determined organizers, and capable communicators. It says that the Australian Academy of Science is a faithful champion of its scientific communities. It suggests, too, that an inquisitive, open-minded spirit prevails at least in Australia, which offers hope to the international community. Open minds in Australia have gleaned crucial insights from CASSE’s tireless Australian National Director, Geoff Mosley (Melbourne), and from one of the world’s leading steady state economists, Philip Lawn (Adelaide), and other Australians who presented at the 2014 Fenner Conference.

A Future Beyond Growth grew out of the proceedings of the 2014 Fenner Conference on the Environment. Not everything from the conference made it to print. My own talk, for example, stays mostly in the pages of Supply Shock, plus the current prefatory remarks. But much of the highly memorable Fenner Conference is presented herein, and I feel delighted to preface the chapters with one more thing:

The next time you hear the win-win spin that “there is no conflict between growing the economy and protecting the environment” or the equivalent in your regional culture, don’t just throw up your hands in resignation to the rhetoric. Think instead about a future beyond growth. That’s where there’s no conflict with protecting the environment, national security, and international stability.

 

The Pope Francis Encyclical And Its Economics

By Brent Blackwelder

Brent BlackwelderThe Encyclical Letter of Pope Francis is attracting extraordinary attention for its message on global warming, deforestation, loss of biological diversity, and other pressing environmental issues. What is less well known is the extensive critique of the global economy found in his 184-page Encyclical. This blog highlights some of the significant points that Pope Francis makes about the need for systemic economic change.

Although the Pope does not use the phrase “steady state economy” or “true-cost economy” his message provides a comprehensive moral argument for a systemicshift to a new economy.

2014 Pastoral Visit of Pope Francis to Korea Closing Mass for Asian Youth Day  August 17, 2014  Haemi Castle, Seosan-si, Chungcheongnam-do  Ministry of Culture, Sports and Tourism Korean Culture and Information Service Korea.net (www.korea.net)  Official Photographer : Jeon Han This official Republic of Korea photograph is being made available only for publication by news organizations and/or for personal printing by the subject(s) of the photograph. The photograph may not be manipulated in any way. Also, it may not be used in any type of commercial, advertisement, product or promotion that in any way suggests approval or endorsement from the government of the Republic of Korea. If you require a photograph without a watermark, please contact us via Flickr e-mail. --------------------------------------------------------------- 교황 프란치스코 방한 제6회 아시아 청년대회 폐막미사 2014-08-17 충청남도 서산시 해미읍성 문화체육관광부 해외문화홍보원 코리아넷  전한

Pope Francis. Photo Credit: Korean Ministry of Culture, Sports and Tourism

I present a series of quotations to illustrate portions of the Pope’s forceful arguments. If we are to obtain systemic economic change, we need new, motivated allies. The Encyclical is a key tool to motivate religious congregations to be front and center in this economic debate to counter the greed and rapacious behavior of numerous governments and large corporations.

In Section 54 the Pope takes sharp aim at the control of politics and finance that prevent urgent changes from being made:

The failure of global summits on the environment make it plain that our politics are subject to technology and finance. There are too many special interests, and economic interests easily end up trumping the common good and manipulating information so that their own plans will not be affected. The alliance between the economy and technology ends up sidelining anything unrelated to its immediate interests. Consequently the most one can expect is superficial rhetoric, sporadic acts of philanthropy and perfunctory expressions of concern for the environment, whereas any genuine attempt by groups within society to introduce change is viewed as a nuisance based on romantic illusions or an obstacle to be circumvented.

Pope Francis repeatedly questions whether the global economy is furthering the common good. In Section 109 he writes:

The economy accepts every advance in technology with a view to profit, without concern for its potentially negative impact on human beings. Finance overwhelms the real economy. The lessons of the global financial crisis have not been assimilated…” In Section 189 he looks again at the financial collapse of 2008: “Politics must not be subject to the economy, nor should the economy be subject to the dictates of an efficiency-driven paradigm of technocracy. Today, in view of the common good, there is urgent need for politics and economics to enter into a frank dialogue in the service of life, especially human life. Saving banks at any cost, making the public pay the price, foregoing a firm commitment to reviewing and reforming the entire system, only reaffirms the absolute power of a financial system, a power which has no future and will only give rise to new crises after a slow, costly and only apparent recovery. The financial crisis of 2007-08 provided an opportunity to develop a new economy, more attentive to ethical principles, and new ways of regulating speculative financial practices and virtual wealth. But the response to the crisis did not include rethinking the outdated criteria which continue to rule the world.

Pope Francis waxes eloquent on the subject of externalities in Section 195:

The principle of the maximization of profits, frequently isolated from other considerations, reflects a misunderstanding of the very concept of the economy. As long as production is increased, little concern is given to whether it is at the cost of future resources or the health of the environment; as long as the clearing of a forest increases production, no one calculates the losses entailed in the desertification of the land, the harm done to biodiversity, or the increased pollution. In a word, businesses profit by calculating and paying only a fraction of the costs involved. ‘Yet only when the economic and social costs of using up shared environmental resources are recognized with transparency and fully borne by those who incur them, not by other peoples or future generations,’ can those actions be considered ethical. An instrumental way of reasoning, which provides a purely static analysis of realities in the service of present needs, is at work whether resources are allocated by the market or by state central planning.

Pope Francis talks about product diversification and consumerism; in Section 129 he extols the virtues of the “great variety of small-scale food production systems which feed the greater part of the world’s peoples.”

As Pope Francis points out, he is building on the messages that popes such as John XXIII, Paul VI, John Paul II, and Benedict XVI have given on these problems. For example, Pope Benedict XVI proposed “eliminating the structural causes of the dysfunctions of the world economy and correcting models of growth which have proved incapable of ensuring respect for the environment.” Pope Paul VI wrote: “the most extraordinary scientific advances, the most amazing technical abilities, the most astonishing economic growth, unless they are accompanied by authentic social and moral progress will definitively turn against man.”

My hope is that the Pope’s message will be translated by religious congregations into tangible actions to make substantive changes in the economic drivers of environmental destruction. New allies are urgently needed.

One good place for tangible action is to go after the cheater economics being used by the G 20 nations to push tens of trillions of dollars into mega-infrastructure projects without regard to social, environmental, or climate impacts. (See my January 2015 blog for details on this subject.)

 

Thoughts on Pope Francis’ Laudato Si

by Herman Daly

Herman DalyAs a Protestant Christian my devotion to the Catholic Church has been rather minimal, based largely on respect for early church history, and for love of an aunt who was a nun. In recent times the Catholic Church’s opposition to birth control, plus the pedophile and cover-up scandals, further alienated me. Like many others I first viewed Pope Francis as perhaps a breath of fresh air, but little more. After reading his encyclical on environment and justice, dare I hope that what I considered merely “fresh air” could actually be the wind of Pentecost filling the Church anew with the Spirit? Maybe. At a minimum he has given us a more truthful, informed, and courageous analysis of the environmental and moral crisis than have our secular political leaders.

True, the important question of population was conspicuous by its near absence. In an earlier offhand remark, however, Francis said that Catholics don’t need to breed “like rabbits,” and pointed to the Church’s doctrine of responsible parenthood. Perhaps he will follow up on that in a future encyclical. In any case, most lay Catholics have for some time stopped listening to Popes on contraception. The popular attitude is expressed in a cartoon showing an Italian mamma wagging her finger at the Pontiff and saying, You no playa da game; you no maka da rules.” Discussing population would not have changed realities, and would have aroused official opposition and distracted attention from the major points of the encyclical. So I will follow Francis’ politic example and put the population question aside, but with a reference to historian John T. Noonan, Jr.’s classic book, Contraception,1 which sorts out the history of doctrine on this issue.

The big ideas of the encyclical are Creation care and justice, and the failure of our technocratic growth economy to provide either justice or care for Creation. Also discussed was the integration of science and religion as necessary, though different, avenues to truth. And yes, the Pope supports the scientific consensus on the reality of climate change, but, media monomania to the contrary, the encyclical is about far more than that.2

Pope Francis.aletela.org

Pope Francis’ environmental encyclical “Laudato Si, On Care for our Common Home” was released on June 18. Photo credit: Aletela.org

Francis’ voice is of course not the first to come from Christians in defense of Creation. In addition to his ancient namesake from Assisi, Francis also recognized Ecumenical Patriarch Bartholomew of the Eastern Orthodox Church, who has for two decades now been organizing conferences and speaking out in defense of rivers and oceans, including the Black Sea. The Orthodox Church lost a generation of believers to Communistic atheism, but is gaining back many young people attracted to the theology of Creation and the actions it inspires. Liberal mainline Protestant Christians, and more recently, conservative Evangelicals, have also found their ecological conscience. So Francis’ encyclical would seem to be a capstone that unifies the main divisions of Christianity on at least the fundamental recognition that we have a shamefully neglected duty to care for the Earth out of which we evolved, and to share the Earth’s life support more equitably with each other, with the future, and with other creatures. Many atheists also agree, while claiming that their agreement owes nothing to Judeo-Christian tradition. That is historically questionable, but their support is welcome nonetheless.

This theology of Creation should not be confused with the evolution-denying, anti-science views of some Christian biblical literalists (confusingly called “Creationists” rather than “literalists”). Mankind’s duty to care for Creation, through which humans have evolved to reflect at least the faint image of their Creator, conflicts headlong with the current dominant idolatry of growthism and technological Gnosticism. The idea of duty to care for Creation also conflicts with the materialist determinism of neo-Darwinist fundamentalists who see “Creation” as the random result of multiplying infinitesimal probabilities by an infinite number of trials. The policy implication of determinism (even if stochastic) is that purposeful policy is illusory, both practically and morally. Creation care is also incompatible with the big lie that sharing the Earth’s limited resources is unnecessary because economic growth will make us all rich. Francis calls this magical thinking. He skates fairly close to the idea of steady-state economics, of qualitative development without quantitative growth in scale, although this concept is not specifically considered. Consider his paragraph 193:

In any event, if in some cases sustainable development were to involve new forms of growth, then in other cases, given the insatiable and irresponsible growth produced over many decades, we need also to think of containing growth by setting some reasonable limits and even retracing our steps before it is too late. We know how unsustainable is the behaviour of those who constantly consume and destroy, while others are not yet able to live in a way worthy of their human dignity. That is why the time has come to accept decreased growth in some parts of the world, in order to provide resources for other places to experience healthy growth.

In the last sentence “decreased growth” seems an inexact English translation from the Spanish version “decrecimiento,” or the Italian version “decrescita” (likely the original languages of the document), which should be translated as “degrowth” or negative growth, which is of course stronger than “decreased growth.”3

Laudato Si is already receiving both strong support and resistance. The resistance testifies to the radical nature of Francis’ renewal of the basic doctrine of the Earth and cosmos as God’s Creation. Pope Francis will be known by the enemies this encyclical makes for him, and these enemies may well be his strength. So far in the US they are not an impressive lot: the Heartland Institute, Jeb Bush, Senator James Inhofe, Rush Limbaugh, Rick Santorum, and others. Unfortunately they represent billions in special-interest money, and have a big corporate media megaphone. The encyclical calls out the opponents and forces them to defend themselves. To give them the benefit of the doubt, they may really think that Francis is rendering to God what actually belongs to Caesar’s oligarchy. But neither Caesar, nor the market, nor technology created us, or the earth that sustains us. Thanks to Francis for making that very clear when so many are denying it, either explicitly or implicitly.

 


Notes:

1. John T. Noonan, Jr., Contraception: A History of its Treatment by the Catholic Theologians and Canonists, Belknap Press, 1986. Noonan demonstrates the lack of a biblical basis for opposition to contraception, as well as the origins of church doctrine in secular Roman law, which was absorbed into canon law. The ancient Roman meaning of “proletariat” was “the lowest class, poor and exempt from taxes, and useful to the republic mainly for the procreation of children.” Clearly contraception was not indicated for them, although tolerated for patricians. This literal meaning of proletariat as the prolific class was lost when Marx redefined the word to mean “non owners of the means of production.” But the Malthusian connection with overpopulation and cheap labor has remained real, even if downplayed by Marxists as well as Catholics.

2. The Pope’s condemnation of carbon trading reflects a common misunderstanding of the cap-auction-trade policy, unfortunately shared by some leading climate scientists. See Joseph Heath, “Pope Francis’ Climate Error,” New York Times, June 19, 2015.

3. Thanks to Joan Martinez-Alier for pointing this out.

 

Review of Collision Course (Endless Growth on a Finite Planet)

Kerryn Higgs, MIT Press, Cambridge, MA, 2014

by Herman Daly

Herman DalyThis informative book is about the rise of economic growth to the status of the number one goal of nations; the short-lived challenge to that dogma from the book The Limits to Growth (1972); the solidity of the Limits position as confirmed by subsequent data and the analyses of others; the intellectual poverty and dishonesty of the growth economists’ reaction against the Limits argument; and how it nevertheless happened that through modern public relations and well-financed ideological think tanks, the intellectually weaker growth arguments prevailed. Higgs focuses on the US story, but with informative parallels from her native Australia.

Higgs documents the cogency of the Limits position and how the business as usual projection of the World Model has for over thirty years fit the data better than any standard economic model. She also exposes how the economists resorted to ridicule and arrogance as a substitute for reasoned refutation in their response to Limits. This story is well known to me because I was a participant in the debate. I can testify that Higgs’ retelling is accurate and insightful. It is also refreshing to me that MIT Press published her book. This indicates the welcome likelihood that some anonymous member of the MIT department of economics no longer has a veto over the decisions of the MIT Press.*

Collision CourseWhat to me was new and challenging was Higgs’ detailed historical consideration of the following question: given that the Limits position is fundamentally correct, and that the growth economists’ “refutation” is based on ignorance, vested interests, and dishonesty, how did it come to pass that the economists’ erroneous position prevailed over the much more cogent and scientifically based Limits position? That it has done so can hardly be doubted, even if one still hopes for better in the future. For those of us who believe in the persuasive power of reasoned argument, this fact, and Higgs’ explanation of it, is a real kick in the head. Nor does it bode well for democracy. How did it happen? Can we learn from it? Can we recover from it?

The starting point for Higgs’ explanation is the classic 1928 work, Propaganda, by Edward Bernays, Sigmund Freud’s nephew, and pioneer in public relations. Bernays wrote:

The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country . . . It is they who pull the wires which control the public mind, who harness old social forces and contrive new ways to bind and guide the world.

Propaganda becomes advertising, which becomes public relations identifying “the greater good” as defined and propagated by well-endowed “public interest” think tanks. According to Higgs, soon-to-be Associate Supreme Court Justice Lewis Powell, Jr.’s 1971 memorandum to the US Chamber of Commerce gave strategy and operational structure to Bernays’ philosophy. It led to the establishment of think tanks with the explicit purpose of defending “free-market capitalism” against labor unions, welfare legislation, and taxes on business. This docket was extended to include combating environmentalism and any questioning of the primacy of economic growth that would only “confuse” the masses. This opposition was already being put in place by the 1972 publication of Limits.

Democracy presupposes a citizenry capable of thinking for themselves rather than being misled by propaganda. But with the average family now holding two full-time jobs that are often uncertain, plus raising kids, there is little time for keeping informed and understanding increasingly complex economic issues. The appeal of easy ready-made answers lends force to Bernays’ cynical view of democracy as the art of manipulating the opinions of the masses.

In addition to the business PR opposition, there was the fierce opposition of academic economists who were religiously committed to the “Keynesian-Neoclassical growth synthesis.” The Limits argument had to be opposed because if it were true, then very many very important economists would have been very wrong about a very important issue for a very long time. So Limits faced the united opposition of business interests represented by the Chamber of Commerce, the National Association of Manufacturers, the propagandistic think tanks, and the academic economists. In the face of such concerted opposition, it is remarkable that Limits, by virtue of logical argument based on scientific premises, managed to get the significant hearing that it temporarily did. But it has not prevailed against the overwhelming growth coalition.

One of the verbal PR tricks is to use the word “free” as in “free market” and “free trade,” instead of the more precise word “deregulated.” The deregulated market, with deregulated global trade and deregulated finance, is destroying the freedom of the vast majority to attain a sufficient income for a decent life. Higgs shows how income and wealth have been enormously concentrated by the growth economy, and chides the Left, with which she is usually sympathetic, for being stubbornly slow to recognize the costs of growth, and for persisting in the belief that the “bigger pie theory” is the best hope for the working class.

The anti-Limits PR apparatus is so strong now that it even dares to oppose science in order to defend growth. This is most evident today in the denial of climate change and the attack on climate scientists financed by the fossil fuel industry. This strategy of “sowing and selling doubt” was previously used with some success by the tobacco industry. The American Enterprise Institute, the Cato Institute, the Heritage Foundation, The Club for Growth, the Heartland Institute, etc. can be counted on to conduct “independent” studies that reach conclusions supporting deregulated international trade, deregulated finance, repeal of environmental and welfare legislation, etc., all in the name of growth.

Even the public policy schools in universities, which have been relatively independent and objective, are now often staffed by joint appointments with these moneyed think tanks. This I have observed from having taught in a school of public policy for fifteen years. Economics departments, where I also have long experience, have become almost irrelevant, as Joan Robinson put it some time ago, having “run off to hide in thickets of algebra, leaving the important questions to journalists,” –who by default then get their information from the think tanks. And of course the corporate media are only too happy to eat what they are freely fed.

At least the Limits debate aroused economists from their dogmatic slumber enough to make a few ad hominem counter-attacks in self-defense. But they are too self-confident to see the need for actual thought, and have gone back to sleep. Higgs’ book is a wake-up call, but offers little on specifically what policies to adopt once awake. Maybe that will be the subject of a future effort–first things first, she might well say.

A short review cannot do justice to such an excellent and detailed book. In conclusion I want to return to the point that Higgs’ explanation of the ascendancy of the weaker anti-Limits position constitutes a kick in the head for those of us who believe in the persuasive power of reasoned argument. Higgs’ book itself is a reasoned argument. She has clearly not given up on persuasion. But she reminds those of us who have a tendency to forget, that reason and honesty must confront power and corruption, not just honest error. Even correcting the honest error requires a substantial paradigm shift–a change from the pre-analytic vision of the economy as the whole with nature as a part, to the recognition that the economy is the part. The economy is an open subsystem of the enveloping ecosphere that is finite, non-growing, materially closed, and entropic. Reason and truth will ultimately prevail, but Higgs makes it clear that it will take longer and be a more costly fight than many of us have imagined.

 

*For details the interested reader may see H. Daly, Beyond Growth, fn. 5 on p. 225.

Peace, Love, and the Gift

by James Magnus-Johnston

“You can’t have community as an add-on to a commodified life” Charles Eisenstein

Johnston_photoFor many Westerners, Christmas Day is one of the most sacred days of the year. Perversely, perhaps, the holidays are also marked by excessive materialism, consumerism, and the creation of false needs. Today happens to be “Boxing Day” in Canada, Black Friday’s Christmas equivalent, marked by mad and even obscene rushes for the best post-holiday deals. How have we reached such a disconnect between the meaning of our traditions and the way we practice them?

It might be hard to see with our consumer lens, but there is a deeply important connection between the sacredness of December 25th and the practice of gifting. As Charles Eisenstein has eloquently and passionately argued, gifts are an expression of love that begins with the gift of life itself:

We didn’t earn being born, being fed as babies, having an earth to live on, air to breathe, water to drink. All came as a gift. Ancient cultures often recognized this explicitly; theirs was a gift cosmology that was echoed in their economic systems.

Therefore our natural state, he says, is gratitude. And therefore, we have a built-in desire to give and be generous.

An obsession with money, on the other hand, has contributed to “alienation, competition, and scarcity, destroyed community, and necessitated endless growth.” Today, money acts as a profane separator when seen as an end in itself rather than a means to an end. Rather than understanding money as a tool that helps facilitate the exchange of goods or truly improve our quality of life, we tend to see money–its accumulation and growth–as the ultimate end. Undoubtedly, money is required to move us towards a level of material sufficiency, but beyond sufficiency, more money won’t make you happier. Are you dissatisfied with your life regardless of how much money you’re making? Will the growth imperative behind the accumulation of money improve the planet’s life support system?

Millennia of ancient thought–including that of the Christian tradition–reminds us that traditional gift practices are expressions of love. Expressions of love aren’t luxury items any more than the planet’s life support system is. Expressions of love keep human beings connected, because they remind us that we actually need one another! Eisenstein writes,

One thing that gifts do is that they create ties among people–which is different from a financial transaction. If I buy something from you, I give you the money and you give me the thing, and we have no more relationship after that. . . But if you give me something, that’s different because now I kind of feel like I owe you one. It could be a feeling of obligation, or you could say it’s a feeling of gratitude. What’s gratitude? Gratitude is the recognition that you’ve received, and the desire to give in turn. And that’s why we are driven to give. Because everything we’ve received is a gift.

Gifts - Andy Noren

Let’s take a step back from the excessive materialism of the holiday season to think about why we really give gifts. Photo Credit: Andy Noren

Peace, love, and community are fostered through the gifts we provide for one another not only on December 25th, but throughout every day of the year. In the grand cosmic scheme of things, gift practices can make us more aware of the miracle of life itself, and the gift of existence we received–and continue to receive–from planet earth and the universe, or God, depending on your inclination.

The purpose of our existence can’t be quantified in monetary terms. Perhaps as this year comes to a close, it’s worth taking a moment to consider the gifts you received at birth or the gifts you have honed and developed throughout your life. Why are you here? Are you able to express your innate gifts? Do you need to unplug from the formal economy to explore and give of yourself more meaningfully?

If you can’t make more money exploring your gifts and skills, embrace the challenge. If we are to degrow the economy towards a steady state, we’re going to need to be a whole lot more generous, a whole lot happier, and more grateful for what we have already. Gift practices might shrink the formal economy a little, but they will engender precisely the love and community that we often feel is missing in modern life.

Charles Eisenstein’s full book “Sacred Economics” is available on his website at http://sacred-economics.com.

The Guardian and Monbiot versus Forbes and Worstall

Dalyby Herman Daly

In his Guardian column, criticizing growth as “The Insatiable God,” George Monbiot writes:

Is it not also time for a government commission on post-growth economics? Drawing on the work of thinkers like Herman Daly, Tim Jackson, Peter Victor, Kate Raworth, Rob Dietz and Dan O’Neill, it would investigate the possibility of moving towards a steady state economy: one that seeks distribution rather than blind expansion; that does not demand infinite growth on a finite planet…

It is no surprise that we at CASSE strongly agree with Monbiot. Nor does it come as a surprise that a columnist for Forbes, Tim Worstall, would disagree. What is surprising is that Worstall uses me in support of his position (with which I disagree) and against Monbiot (with whom I agree). How does he manage such a reversal? By conflating growth (quantitative physical increase) with development (qualitative improvement), and claiming that 80% of GDP increase is due to qualitative “growth” (total factor productivity), and is therefore independent of increase in physical resource use–when in reality the “total” factor productivity increase in question is mainly caused by an increase in physical resource throughput. This requires further explanation.

In a previous article, also criticizing Monbiot, Worstall states his position more completely, as quoted below, [my brackets inserted].

Value add [added] is economic growth, not more stuff. And we can take this insight to an extreme as well, that extreme being the steady state economy proposed by Herman Daly. In this world resources are only abstracted from the environment if this can be done sustainably. And we recycle everything of course [not energy or highly dispersed materials]. So, in such a world can we still have economic growth? We have no more access to more stuff to make stuff out of: so is growth still possible? Yes, of course it is. For we can still discover new methods of adding value to those resources that we do have available to us through our recycling. Daly calls this qualitative growth rather than the quantitative growth that we cannot have. [Actually I speak of “qualitative improvement” to emphasize that technology is not a cardinally measurable quantity that can properly be said to grow]. But there’s absolutely no difference at all between this and the more conventional economic descriptions of growth. Qualitative growth is akin to growth through an increase in total factor productivity as opposed to growth via the use of more inputs [only remember that “more inputs” should include natural resources, but does not]. And Bob Solow once pointed out that 80% of the growth in the market economies in the 20th century came from tfp (total factor productivity) growth, not the consumption of more resources. We’re just using different words to describe exactly the same thing here [not really].

Now if this were true we could keep resource throughput constant, avoiding most of the increasing environmental costs of growth, and still have 80% of historical GDP growth. Once matter-energy throughput is stabilized at an ecologically sustainable level we could presumably have significant GDP growth forever with minimal environmental costs, thanks to increasing total factor productivity. I would be happy if that were true, but I am pretty sure that it is not. Nevertheless, if Forbes believes it, maybe they would then endorse a policy of limiting resource throughput (cap-auction-trade or carbon tax), and be content with still significant GDP growth based only on total factor productivity increase? Don’t hold your breath. Worstall explicitly discounts any notion of resource scarcity, so why limit throughput? But, just for good measure, he argues here that even with resource scarcity, technology can, by itself, provide most of our accustomed growth, as it supposedly has in the past.

Worstall’s source for the 80% figure is the “Solow Residual,” which is commonly misinterpreted as a measure of total factor productivity. As calculated, it is a measure of “two-factor” productivity, the two factors being labor and capital. The Cobb-Douglas production function that underlies this calculation omits natural resources, the classical third factor. This means that it cannot possibly be an accurate analytical representation of production. It is like a recipe that includes the cook and the oven, but omits the list of ingredients.

Photo Credit: Claire.Ly

As natural resources becomes increasingly scarce, can we afford to ignore their contributions to increases in production? Photo Credit: Claire.Ly

Value added has to be added to something, namely natural resources, by something, namely labor and capital. The cook and the oven add value to the ingredients, but nothing happens without the ingredients. Our empty-world economic accounting attributes all value to labor and capital, and treats natural resources in situ as superabundant free gifts of nature. But in today’s full world, resources are not only scarce but have become the limiting factor. Leaving the limiting factor out of the analysis makes the Cobb-Douglas production function not only incomplete, but also actively misleading.

Nevertheless, Worstall’s 80% figure comes from respected economists who have used the Cobb-Douglas production function in a statistical correlation–an exercise to see how much of increased production can be statistically explained by increases in labor and capital. The residual, what is not explained by labor and capital increase, is attributable to all causes other than labor and capital, including, for example, technology improvement and increased material and energy throughput (natural resource use).

A large residual indicates weak explanatory power of the theory being tested–in this case the Cobb-Douglas theory that production increase is due only to capital and labor increase. But instead of being embarrassed by a large unexplained residual, some economists were eager to “explain” it as an indirect measure of technological progress, as a measure of improvement in total factor productivity. But is technology the only causative factor reflected in the residual? No, there are surely others, most especially the omitted yet rapidly increasing flow of natural resources, of energy and concentrated minerals. The contribution of energy and materials from nature to production is also part of the residual, likely dwarfing technological improvement. Yet the entire residual is attributed to technology, to total factor productivity, or more accurately “two-factor” productivity, in the absence of natural resources, the classical third factor.

As the natural resource flow greatly increases, and capital and labor transform that growing resource flow into more products, then of course the measured productivity of capital and labor increases. This increased “total” factor productivity, due mostly to increase in the ignored factor of natural resources, is then appealed to as evidence of the unimportance of natural resources, given the “empirical finding” that total factor productivity improvement (technology) “explains” so much of the observed increase in production. This reasoning is clearly specious. It is the increased resource use that explains the increase in total factor productivity (i.e. two-factor productivity), which cannot then be used as a reason to discount the importance of its own cause, namely an increased flow of natural resources. Indeed, the unimportance of natural resources could not possibly be an empirical finding of any statistical analysis based on the Cobb-Douglas production function, because that function assumes the unimportance of natural resources from the beginning by omitting them as a factor of production. This is a big confusion and Worstall is not the only one misled by it.

In conclusion, I think the Guardian and Monbiot’s position is not in the least weakened by the criticism from Forbes and Worstall, but that reliance on the Cobb-Douglas production function should certainly be weakened.

Hedonism, Survivalism, and the Burden of Knowledge

by James Magnus-Johnston

Johnston_photoIn my last post, I asked whether human beings are naturally predisposed to deny the precarious reality of our planet’s health, which would help explain the undeserved endurance of the growth narrative. Self-imposed ignorance, in other words, is bliss. It absolves us from the responsibility of action.

What about the rest of us? For those of us that have ‘quit denial,’ so to speak, can conscious awareness be channeled to motivate positive action? Or is hope futile in the face of an enormous task?

A recent article by Madeline Thomas in Grist featured the headline, “Climate depression is for real. Just ask a scientist.” Scientists’ intimate understanding of climate change has led to depression, substance abuse, suicide, and post-traumatic stress disorder. Camillie Parmesan, who shared the Nobel Peace Prize for her work as a lead author of the Third IPCC Assessment Report, became “profoundly depressed” at the seeming futility of her work. She had been screaming from the scientific rooftops, yet the best we could offer in response was little more than a call for more carbon-intensive growth.

Evolutionary psychologists Ajit Varki and Danny Brower believe that some of the earliest humans fell into depression due to their awareness of mortality, while others were able to carry on without becoming crippled by this realization. Mind-over-reality became humanity’s defining characteristic, enabling us to maintain sanity in the face of danger. On a society-wide basis, anxiety and depression could cause an avoidance of procreation, which would be an evolutionary dead-end.

We’re now confronting not only our individual mortality, but perhaps even the mortality of our species, according to a few controversial voices. Ecologist Guy McPherson is among those who have suggested that near-term human extinction is inevitable. James Lovelock, author of the Gaia hypothesis, believes that climate catastrophe is inevitable within 20 years. With an awareness of the rate of species loss and climate change, among other symptoms of breakdown, it isn’t hard to fall into paralysis and despair.

But others seem able to carry on without being crippled by this realization. Proponents of the steady state economy are among those who remain optimistic in the face of long odds, and generally, I think we fall into one of three camps: survivalists, hedonists, and denialists.

Photo Credit: hardworkinghippy

The survivalists among us are easiest to spot. Photo Credit: hardworkinghippy

We all know the survivalists among us. They’re the lot that want to voluntarily extricate themselves from known civilization before the imagined $h!t hits the fan in some kind of imagined catastrophic event. They dream of a semi-pastoral existence in the agrarian hinterlands, far from the commercialized zombies who wouldn’t know how to take care of themselves without the convenience of a department store. They’re hard workers who romantically hope to re-kindle the low-carbon self-sufficiency of generations past.

Then there are the hedonists, and I’d be willing to wager that a great many well-educated millennials fall into this category, sometimes by accident. Hedonists might accept the ecological challenges we face and withdraw from the growth-obsessed formal economy. But rather heading for the hills, they do what they love. I think these are many of the artists, dumpster-divers, and coffee-enthusiasts among us. You can’t measure their contribution to change in terms of GDP. Both McPherson and Lovelock seem to prescribe hedonism, with Lovelock calling for us to “enjoy life while we can” because “in 20 years, global warming will hit the fan.” McPherson, for his part, calls upon us to “passionately pursue a life of excellence,” and practice the radical generosity associated with hospice care. For the hedonist, “carpe diem” is the modus operandi. They’re always asking themselves: what must we do, knowing that we only have a little bit of time left?

And finally, the denialist. A little bit of overconfidence and denial can come in pretty handy from an evolutionary perspective, because it keeps us from obsessing about the abysmal end. In this case, I’m not referring to outright denial of climate change–the “climate deniers.” I’m referring to those of us who accept planetary life support breakdown, but hope that maybe–just maybe–human civilization has enough wiggle room to squeak by. Just enough methodological uncertainty to restore this blue dot to health. After all, careful skepticism is the essence of good science. Hydrogeologist Scott Johnson, for instance, has written a long rebuttal to the claims of Guy McPherson. Denialists would be more inclined to lean on the kind of methodological uncertainty emphasized by Mr. Johnson, and reject the kind of claims offered by McPherson and Lovelock.

I fall into each of these camps from time to time. As a survivalist, I hope to learn how to garden a little bit every summer and support the DIY economy. As a hedonist, I will do what I love and passionately engage in conversations about catalyzing the steady state economy, because I believe it sets a new standard of excellence for the 21st century. In fact, all things considered, I believe the steady state economy represents a balanced “middle way” between the ignorance and paralysis. And with a healthy dose of denial, I will continue to hope that somehow, the margin of error is just wide enough to turn spaceship earth around.

Are We Hard-Wired to Think We Can Grow Forever?

by James Magnus-Johnston

Johnston_photo

Humanity is an irrational lot, prone to denial and short-termism. If rational arguments were primary catalysts for social change, perhaps a steady state economy would already be a reality. Research in behavioural economics and cognitive psychology is beginning to help us understand why human beings don’t always make decisions that are in their best interests. Can we overcome our irrational, maladapted mental hard-wiring to thrive in a post-growth future?

Trailblazing behavioural economists like Daniel Kahneman have discovered that human beings are highly irrational creatures prone to delusion, cynicism, and short-termism. In ecological economics, Bill Rees has argued that our mental genetic presets have hard-wired us for overconsumption and ecological doom. And now, according to a new theory by Ajit Varki and Danny Brower, perhaps it all stems from an overarching psychological predisposition to denial.

In ecological terms, denial might be characterized as the failure to accept the deleterious consequences of economic growth in favour of accepting comfortable fictions that reinforce the status quo. Head-scratching environmentalists often use the word “denial” to reference the irrational “climate change deniers,” who accept the science of familiar things like internal combustion engines, modern appliances, or GDP growth, yet are dismissive of climate science and planetary boundaries. Why are human beings so good at denial?

Ecological economist Bill Rees argues that our ancient “triune” brain is hard-wired for short-term rewards, and those rewards have been amplified by the abundance of our fossil fuel driven economy. Our brain, which runs on an outdated OS, has leveraged its propensity for denial to construct a myth of perpetual growth wherein we can grow the economy and achieve short-term rewards forever.

Elephants - Hadi Zaher

Is it our ability to deny reality that separates us from other highly intelligent animals? Photo Credit: Hadi Zaher

In Denial: Self-Deception, False Beliefs, and the Origins of the Human Mind, Varki and Brower take it one step further. They argue that while our intelligence and use of tools set human beings apart from the rest of the animal kingdom, our capacity for denial may be the greatest differentiating factor. The late Danny Brower asked Varki, a biologist, why other smart, self-aware animals such as elephants, apes, dolphins, whales, or magpies, had not achieved levels of intelligence seen in human beings. Many of these animals can recognize themselves, communicate with one another, and mourn relatives or companions. They have all had more time on Earth to evolve.

The theoretical, though as yet unverifiable, answer put forward by Varki and Brower revolves around two things: (1) that human beings are aware of the thoughts of others, and (2) that they have ability to deny reality. According to them, denial is the essence of what it means to be human! They argue that as human beings became aware of their mortality, some fell into depression while others were able to carry on without becoming crippled by this realization. Mind-over-reality became our defining characteristic, enabling us to maintain sanity in the face of danger. Those who suffer from depression are often more aware of reality, they note, which in turn can cause crippling anxieties. On a society-wide basis, such anxiety can cause an avoidance of procreation, which would be an evolutionary dead-end.

But in the Anthropocene, have the tables turned? Now, reality-accepting behaviour may be an evolutionary boon. Rather than leading to a dead-end, accepting the reality of overconsumption and overpopulation may result in actions that increase the likelihood of human survival. Could it be that those who accept reality have suddenly become cultural (r)evolutionaries better adapted for long-term human survival? Can the shift happen quickly enough to improve our survival prospects?

Perhaps the very evolutionary mechanism which led to our propensity for denial may also temper our unfortunate inclinations. At the point when human beings theoretically developed a capacity for denial, we would have changed the cultural software on our mental hardware, which demonstrates that change is possible. We are capable of changing the way we interact with reality.

Although if one does not accept the premise that we can change our cultural software quickly enough, Varki and Brower point out that reality-denial also leads to optimism, confidence, and courage in the face of long odds–a “can do” attitude. If we can’t accept reality, maybe we can focus instead on denying the current economic “reality” of growth!

Dr. Varki calls for us to temper our denial in order to avoid climate destabilization. Most types of denial, he says–about high national debt loads, eating too much red meat, smoking cigarettes, or refusing to wear seatbelts–aren’t fatal to the entire species. Climate destabilization, like a nuclear holocaust, is a different matter. A shift towards reality-accepting behaviour would help us see the validity of policy prescriptions like reducing the debt load and living within planetary constraints.

More often than not, post-growth thinkers are using rational arguments among a very irrational lot. While rational arguments are certainly necessary, we also need to work on how to ‘nudge’ individuals and communities towards a steady state economy with a pitch that leverages or mutes our irrational operating system. In the meantime, let’s harness our optimism, confidence, and courage in the face of long odds.

Paul Krugman on Limits to Growth: Beware the Bathwater

by Brian Czech

BrianCzechCongratulations to Paul Krugman, whose New York Times opinion on “Slow Steaming and the Supposed Limits to Growth” hit the bulls-eye of at least one balloon. Landing at Washington-National the very day his opinion column appeared was like crashing back into the growth fetish of the American Fourth Estate. Out came the fresh air of an Australian balloon; back to the polluted, cynical rhetoric that “there is no conflict between growing the economy and protecting the environment.”

Why the drama with Krugman’s column? Partly due to uncanny timing; partly due to the stark juxtaposition of opinions. Having delivered the keynote address–on limits to growth no less–at the Australian Academy of Science’s annual conference on environmental science, it struck me that decades of careful research could be undermined by the presumptuous pen of a well-placed economist. Something is wrong with that picture.

But only for so long, because those of us who recognize limits to growth have sound science, common sense, and burgeoning evidence on our side. The same cannot be said for Krugman’s opinion.

Krugman got off to a shaky start with the very title of his column. No matter what he could say about “slow steaming,” this was bound to be an article wrong-headed in using one sector (shipping) for drawing broad conclusions about a macroeconomic issue (economic growth). To extend a conclusion from the part to the whole is to commit the fallacy of composition. In this case, it’s a bit like Krugman saying, “Your fingernails keep growing; why not the rest of you too?”

The mistake is common and destructive. When this mistake is made by a highly acclaimed economist in a widely-read opinion, the potential for destruction is multiplied. Politicians hide behind such Pollyannaish opinions to pull out all the stops–fiscal and monetary–for economic growth. The casualties include not only environmental protection but the future economy and ultimately national security.

Next, in Krugman’s lead-in paragraph he laments the “unholy alliance on behalf of the proposition that reducing greenhouse gas emissions is incompatible with growing real GDP.” Already we have two more problems. First, the argument alluded to in the title–that is, refuting limits to growth–is reduced to refuting just one negative impact of growth (that is, climate change). What about all the other impacts and limitations of economic growth: liquidation of natural resources, pollution at large, habitat loss, biodiversity decline, and social side effects such as noise, congestion, and stress?

Second, in a maxed-out, over-stimulated, 90% fossil-fueled economy, Krugman wants us to believe we can grow the economy even more while reducing greenhouse gas emissions. No need to worry about little trends such as tar-sands mining in Canada, coal mining in China, and fracking in the USA. Slower steaming will save the day on climate change, and presumably for the rest of the planetary ecosystem.

Let’s not let Krugman delude us. “Growing real GDP” isn’t about an efficiency gain here and there. It means increasing production and consumption of goods and services in the aggregate. It entails a growing human population and/or per capita consumption. It means growing the whole, integrated economy: agriculture, extraction, manufacturing, services, and infrastructure. From the tailpipe of all this activity comes pollution.

Krugman seems to have fallen for the pixie dust of “dematerializing” and “green growth” in the “Information Economy.” He may want to revisit Chapter 4 of The Wealth of Nations, where Adam Smith pointed out that agricultural surplus is what frees the hands for the division of labor. In Smith’s day that included the likes of candle-making and pin manufacturing. Today it includes everything from auto-making to information processing, but the fundamentals haven’t changed. No agricultural surplus, no economic growth. And agriculture is hardly a low-energy sector.

Adam Smith was among the great, classical economists who readily recognized limits to growth, all the way until at least John Stuart Mill. After that and throughout the 20th century, things got murky for economists as they turned increasingly to microeconomics, losing the forest for the trees. Mr. Krugman appears to be yet another victim of the “neoclassical” evolution of economics. Look to him for insightful opinions on banking regulations, fiscal politics, and other such topics that fit naturally under the rubric of an economics columnist. These are his babies, but beware the bathwater. Take his opinion on limits to growth at your peril, and that of your grandkids.