Posts

Economic Growth, Obesity, and the Creed of Greed

by Garry Egger

Who’s right? Gordon Gekko (greed is good) or Tim Jackson (prosperity without growth)? It should be a simple question, but the answer is not so clear.

Perhaps Gordon Gekko’s position was over the top, even in his day — it takes a sort of blindness to conclude that greed is good, but back then, it did have a purpose. Greed played a role in how we got to where we are. And not just the big house and car, but the best health of any human beings throughout history. And after all, isn’t health and human well-being what economics is all about?

Still, the question remains: does the philosophy of greed and the system of economic growth (a system to which we’ve tied our aspirations) produce the health and well-being we’re after? To find an answer, it’s useful to examine the early days of the industrial revolution. Economist-philosophers of that era, from Adam Smith down to John Stuart Mill, figured that a growing economy was a productive one. And a growing economy requires more people, more production, and more consumption. Individual acquisitiveness was one way of getting this, so greed worked as a serviceable means for driving economic growth.

The system hit a glitch in the 1930s during the Great Depression, but John Maynard Keynes helped sort things out. He suggested that individual greed could be propped up, when needed, by public pooling. The growth model took off like an adolescent at a booze party, with the strength of his parent’s admonition to “be careful” inversely correlated to the fun to be had.

Early admonitions about the economic growth party came from the parents of the system. John Stuart Mill, in the Principles of Political Economy (1848), warned that once the work of growth was done, a stationary economy would ensue. And he viewed the transition to such an economy as a positive development for humanity. Keynes himself, in 1930, said we may need a growth-based system (propped up by greedy behavior) for up to 100 years, but after that, we could look forward to better times in a system driven by our more virtuous character traits.

Of course, the most prominent warnings about growth were issued by Thomas Robert Malthus. His admonitions about overpopulation were akin to telling the party-going adolescent to stay at home and read a book.

A simple and logical definition of growth is “maturation till maturity.” And these early economic “parents” were trying to guide the young economy through the maturation process. In more recent times, however, their guidance has been ignored. The rapacity-building economic framework of the Chicago School has prevailed. The overall economic plan has morphed into continuous growth, and warnings about the dangers of too much growth have been swept away.

Gordon Gekko himself may indeed have been wringing the last juice out of the growth lemon in 1987, before leaving us sucking on the bitter sub-prime-lending rind. Now left with a troubling combination of economic and environmental problems, perhaps we should reconsider the warnings.

Even so, big-picture discussions about the continuing usefulness of economic growth are rare. In the absence of such discussions, governments are doing their best to revive a dying system. In 2008, the New Scientist was the only mainstream publication to question growth, tackling controversial issues such as immigration, population stabilization, and reduction of both production and consumption.

The concept of reducing carbon footprints (to address climate change), especially in the Western world, has received some attention in the media. But a reduction from about 20 tonnes of CO2 per person per year to 15 tonnes (a big enough task in itself), would be totally negated by a 50 percent population increase. And an increase in population is not only predicted, but encouraged, at least in Australia where policies exist to grow population through both immigration and domestic births.

Many people who work in the health industry can build a strong case for questioning economic growth. Obesity and diabetes represent a health crisis of epidemic proportions. Some mistakenly believe that tackling this epidemic is a simple issue of individual restraint, but it’s a side-effect of the system. Growth in personal size (obesity) is the collateral damage from continuous pursuit of growth in economic size.

Health data from the last 200 years convincingly show that economic growth has a tipping point, beyond which costs accrue more quickly than benefits. Health improved dramatically over this period, but in recent years the improvements have been drying up. We don’t yet have the cure for cancer that was promised 30 years ago. And contrary to expectations, doctors see fewer cases of depression when economic growth slows down, as in the aftermath of the global financial crisis.

From the perspective of a health practitioner, Tim Jackson’s philosophy has supplanted Gordon Gekko’s. For an economy that has reached maturity, greed is bad. We stand at the start of a new era, in which we must capitalize on the past benefits of growth and make the transition to a steady state economy.

This transition doesn’t mean an end to human development. On the contrary, we need to enhance our cultural and economic institutions to create a truly sustainable economic system. Doing so will test our capacity for adaptability more than anything else since leaving the trees. It will also leave a few traditional economists still dangling from the branches.

Garry Egger is a professor of health and applied sciences at Southern Cross University in Australia.  He is also the author, with Boyd Swinburne, of Planet Obesity: How We Are Eating Ourselves and the Planet to Death.

A Mindful Path to a Steady State Economy

by Rick Heller

The Occupy Wall Street movement has struck a chord with its protests against growing inequality in the United States. Suddenly, it is conceivable that policies may be enacted in the next Congress that would raise taxes on the rich and make the American dream more affordable. But if all the Occupy movement does is to restore middle-class demand for large homes and late-model automobiles, it will have been a failure.

The United States faces two economic crises: one is a crisis of severely unequal wealth and political power; the other is a climate crisis driven by an economic model based on insatiable consumption. A Robin Hood approach that redistributes wealth from the rich to the less affluent but does not address the dynamic of excess consumption will not fix and could even exacerbate the climate crisis.

These two economic crises have a common driver — greed. Is it possible that the Occupy movement could take on greed itself, or is that pie-in-the-sky dreaming?

Consider this. Back in 1966, only 42 percent of college freshman considered “being very well off financially” to be an important personal goal. That figure rose to about 75 percent by the time President Ronald Reagan left office. If it is possible to promote greed, it must also be possible to promote generosity.

A traditional way to discourage greed is by shaming those who engage in elaborate displays of wealth. But if criticizing excess consumption made a powerful difference, we would have seen results already. Allow me to introduce a practice that can address greed called mindfulness. Although derived from Eastern thought, it has been appropriately secularized for Western audiences.

I’ve led mindfulness meditations at the Occupy Boston spirituality tent. Mindfulness is the practice of paying attention to the present moment with a nonjudgmental accepting attitude. Many Americans have been exposed to it as part of Mindfulness-based Stress Reduction, a hospital-based program that helps people deal with physical and emotional pain. Indeed, the program I am trying to create could be called Mindfulness-based Greed Reduction.

When one pays close attention to the present moment with a welcoming attitude, the here and now becomes more vivid and joyful. Mindfulness can make negative experiences feel neutral. It also makes neutral experiences feel positive, by restoring a sense of freshness to the wonderful things in life you take for granted. When you realize how much you already have, you feel less need to accumulate more and more. It thus promotes modest appetites in place of greed.

The best way to verify this is to start practicing mindfulness yourself and see if it works. But for those interested in a technical explanation, let me go into the neuroscience.

Our appetites go through a cycle of wanting and liking — which reinforces further wanting. When we desire something, the brain transmits a chemical called dopamine. When we get what we want and like it, the brain releases internal opioids. The latter are chemically similar to morphine and heroin, which helps explain how desires can become addictive.

Addicts need increasingly higher doses of a drug in order to continue to get the same high. People who get their satisfaction from having and spending money likewise need more and more of it to feel rewarded. This is because of habituation. Dopamine neurons in the brain react most strongly to unexpected rewards. When rewards come in steadily and predictably, handling them shifts to the habits system, which operates with little conscious involvement and little sense of pleasure.

This presents a challenge to advocates of a steady state economy. How can you keep people excited when the stream of rewards fails to grow?

Spirituality Tent at Occupy Boston

Mindfulness addresses this challenge by showing how to find novelty in the smallest details of daily life. As you tend your own garden, you become absorbed by each blade of grass. This absorption produces a steady flow of dopamine and a continuous feeling of satisfaction. Mindfulness generates novelty and excites the dopamine neurons not by covering a lot of ground fast, but by delving deeper into familiar turf. As the poet Allen Ginsberg once wrote, “You own twice as much rug if you’re twice as aware of the rug.”

Mindfulness practices, including yoga, are spreading rapidly in the United States. They will spread even more quickly if movements like Occupy embrace them. But will this be quick enough to make a difference for the climate crisis? Although I can’t predict the future, it may be easier to change young people’s minds about consumption that it is to alter the energy infrastructure of the United States.

Ultimately, we need to pass legislation that restrains carbon emissions. But it will be easier to do if Americans realize we can continue to grow in happiness even as we shrink our dependence on the planet’s resources.

Rick Heller is the author of Occupy the Moment: A Mindful Path to a New Economy.

Why Do So Many People Believe in the Fantasy of Infinite Growth on a Finite Planet?

by Rob Dietz

How do you feel about the economy these days? How about the environment? Do you think we’re sitting in a better spot than we were ten, twenty, or thirty years ago? It’s hard to find folks who are satisfied with either economic or environmental conditions. In the first place, the way we run the economy is producing appalling results. We have a mix of financial fiascos, unacceptable unemployment, and a dismal disparity between the haves and the have-nots. And if you’re not soiling yourself (or at least somewhat concerned) about what’s happening on land, sea and air, then you’re not paying much attention to the omnipresent signs of environmental breakdown.

Each day it becomes more apparent that we are on a misguided mission. Pursuit of perpetual economic growth is not a winning proposition for a lasting prosperity. Building a bigger economy can make sense in some circumstances, but always aiming to build a bigger economy means taking an ever-bigger chunk out of the earth’s ecosystems and the life-support services they provide. Why, then, do so many people believe in the fantasy of infinite growth on a finite planet? Is it because we can’t come up with a better idea? Is it because the rich and powerful have trapped the rest of us in their web of conspiracy? Is it because people are hopelessly greedy and materialistic?

At various times and places we might answer these questions affirmatively, but we can more commonly answer, “No, no, and no.” Putting aside conspiracy theories for the moment, there are three honest (but bogus) reasons why we pursue economic growth past the point of effectiveness and reason.

Bogus Reason #1: We think we have to have economic growth to create jobs.

People, and especially politicians, want jobs. We’ve used the blunt tool of economic growth to create jobs for decades, but do we really need economic growth to have good jobs? It’s true that there are typically more job openings in a growing economy, but there are other, less costly ways to make sure jobs are available. Growth, however, gives corporate elites an easy out. They can point to economic growth as the job creator while doing what they want without considering the impacts of their decisions on jobs.

If jobs are really the priority, then we wouldn’t replace people with machinery. And we wouldn’t eliminate service jobs to shift more and more burden onto people to serve themselves. My friend Chris works as a gas station attendant and provides a valuable service pumping gas for customers. He wouldn’t have a job, however, if he lived elsewhere. He happens to live in Oregon where the law says that only professional attendants can pump gas. In most states, gas station attendants have been replaced by customer labor and credit card readers. This sort of substitution has become commonplace in the name of efficiency — policy makers find it easier (or at least they’ve found it easier in the past) to avoid considering jobs explicitly. Just grow the economy and let Chris find a job elsewhere — that’s just the way it goes if his job is eliminated and the customer is forced to pick up the slack.

The truth is that we can have good jobs without producing and consuming evermore stuff. For starters, we can institute policies to make job-sharing an attainable reality. Many people would gladly trade some salary for more time. We can also stop the process of eliminating jobs through outsourcing and machinery-for-people swaps. Of course stopping this process would require a change in corporate incentives…

Bogus Reason #2: Screwy corporate incentives require growth.

Shareholder corporations are severely flawed. In my household, let’s say my overriding goal is to maximize my earnings. What would I do? I would take the highest paying job I could get. I certainly wouldn’t be involved in public policy or a not-for-profit enterprise. I wouldn’t spend much time with my wife or daughter — that would be time away from my career, and it could eat into my earnings (cue the Cat’s in the Cradle). If the goal is so single-focused, the results aren’t surprising. Profit maximization, whether it occurs in my household or in a corporation, produces perverse outcomes.

We know this about shareholder corporations. We know there are better ways to set up productive enterprises that have more worthy goals, but we don’t make the change. The reason is that we are addicted to two things corporations do well. First, we’re addicted to consumer novelty. We’ve gotta have the latest and greatest. People chase after I-phones, I-pods, I-pads, and plenty of other I-wants. Second, we’re addicted to receiving unearned income from investments in stocks or mutual funds. People who can afford it are invested in corporations. Their personal wealth is tied to the ability of corporations to grow. We’ve become accustomed to the idea of passive investment — we put extra money into an account and do absolutely nothing but watch the size of the account get bigger. Are we really entitled to get something for nothing?

Bogus Reason #3: We refuse to pay attention to the downsides of economic growth.

Few people are studying ecology and understanding how economic growth is degrading environmental resources. In fact, a whopping 21% percent of college students are business majors. And as Dr. Seuss noted in his classic book, The Lorax, “Business is business, and business must grow!” While we continue to tempt fate by disrupting and dismantling natural systems that we only partially understand, our attention is locked on the results of reality TV shows, Tiger Woods’s sex life, Jennifer Anniston’s and Justin Bieber’s haircuts, fairytale weddings of figurehead monarchs, and other matters of critical importance.

While we’re failing to pay attention, those who benefit most from growth — the corporate elites — will keep on doing what they do, and they’ll keep on selling it to the rest of us. If we don’t start asking, “why?” real soon, our kids will one day be asking “How did we let this happen?”