Time to Stop Worshipping Economic Growth

By Brent Blackwelder

Brent Blackwelder

There are physical limits to growth on a finite planet. In 1972, the Club of Rome issued their groundbreaking report—Limits to Growth (twelve million copies in thirty-seven languages). The authors predicted that by about 2030, our planet would feel a serious squeeze on natural resources, and they were right on target.

In 2009, the Stockholm Resilience Center introduced the concept of planetary boundaries to help the public envision the nature of the challenges posed by limits to growth and physical/biological boundaries. They defined nine boundaries critical to human existence that, if crossed, could generate abrupt or irreversible environmental changes.

The global economy must be viewed from a macro-perspective to realize that infringement of the planetary boundaries puts many life support ecosystems in jeopardy. Without functional ecosystems, the very survival of life forms, as well as human institutions, is put in doubt, including any economy. There is no economy on a dead planet!


Scientists are concerned that we have already overstepped the boundaries on biogeochemical flows (nitrogen) and biosphere integrity (genetic biodiversity). [click image for larger view] Image Credit: F. Pharand-Deschênes /Globaïa. 

These boundaries apply to the economy because the economy is a wholly-owned subsidiary of the ecosystems that make life on earth possible. (Some understanding of ecology should be a prerequisite for an advanced degree in economics!) Scientists are concerned that we have already overstepped the boundaries on biogeochemical flows (nitrogen) and biosphere integrity (genetic biodiversity).

Today’s global economy and the various regional and national economies regularly neglect planetary boundaries. Crossing a boundary is tantamount to crashing through a guardrail and plunging over a cliff. The blind encouragement of economic growth that does not respect these boundaries is setting up human civilizations for collapse. Two of the most harmful types of growth are ruthless and futureless.

Ruthless growth benefits a few at the top but does nothing for the middle class. One of the reasons that Bernie Sanders’ presidential campaign has attracted larger and larger audiences is that he says the most crucial issue facing the United States is the gross discrepancy between the middle class and the billionaire class.

Futureless growth destroys resources, such as water, forests, fisheries, and farmland that will be needed by our children and grandchildren, and by wildlife. Futureless growth directly conflicts with common family values. We tell our children to save for the future rather than squander their money. We don’t tell them to outspend their peers. We don’t tell them to judge the quality of their lives based on material possessions and quarterly financial reports.

To remain within the nine planetary boundaries, nations must shed the fetish of economic growth and transition to a true-cost, steady state economy. Some of the critical transition steps include:

  1. Replacing the GDP as a measure of well-being (lots of work has been done on coming up with an index of sustainable productivity).
  2. Getting the Securities and Exchange Commission (SEC) to require corporations to disclose their pollution externalities (the SEC is not hopeless, as can be seen by its recent decision to require CEOs to publish their salaries along with those of the average workers at their companies).
  3. Going to a four-day work week to secure fuller employment (this has happened in some European countries; Canadian economist Peter Victor has papers on why this is a crucial transition step).
  4. Dematerializing the economy (i.e., so that it’s cheaper to repair an appliance than it is to buy a new one).
  5. Identifying the areas in which the economy should grow—and those where it should shrink or degrow (i.e., the usage of fossil fuels must shrink sharply, and in so doing, roof-top solar will grow to become a much larger part of the global economy).
  6. Identifying the most heinous types of economic growth (ruthless and futureless) and showing how their costs exceed their benefits.
  7. Stabilizing population to keep humanity from further transgression of the nine boundaries.

There are about seven billion people on earth today, and forecasts indicate there will be nine billion by 2050. Already, almost one billion malnourished people are feeling the squeeze, as they painfully bear testimony to the truth of what Malthus predicted two centuries ago. Key first steps to stabilizing population in a progressive way are:

  1. Empowerment of women.
  2. Requiring all foreign assistance to be designed so that women will be better off as a result.
  3. Making contraceptives widely available.

Our global economy is treating the planet as if it were a business in a liquidation sale. Even environmental organizations—devoted to environmental protection— have been slow to acknowledge the major causes of environmental degradation, such as perverse economic incentives encouraging raw resource extraction and non-renewable energy use. We need environmental leaders to speak out for a new, just, and true-cost economy; and to challenge the mindless embracing of economic growth—even ruthless and futureless growth. Environmental leaders should be driving the push toward refocusing economic thinking on the changes that we will have to make if we are going to move to a healthier economy that exists within the nine planetary boundaries. Only if humanity stays within these nine boundaries can it continue to develop and thrive for generations to come.



A Post-Growth Economy in France?

by Dan O’Neill

Dan O'NeillI’ve recently returned from France’s first high-level “beyond growth” event, entitled An Innovative Society for the 21st Century. The conference, which included five separate sessions for the 250 or so attendees, was officially sponsored by François Hollande, President of the French Republic. It is one of only a handful of events that has received official government support for the topic of building a post-growth economy. The event was organised by IDDRI, the Institute for Sustainable Development and International Relations, and was held in one of the historic buildings of the French National Assembly.

A number of politicians spoke at the event, including Claude Bartolone, the President of the National Assembly, who gave the opening address. Mr. Bartolone was more to the point than I was expecting and seemed to accept the end of the era of economic growth in France. He was careful to say that low growth does not mean an end to progress, and that the “social economy” could provide answers to the problems that we face. He made the particularly strong statement that “we can accept a 4 percent deficit, but we cannot accept 4 degrees of global warming”. To close, he said that “we must invent the world we want, starting now”.

The session that followed, entitled “Have our models of growth entered into an exhaustion phase?”, included talks by both Nicholas Stern (author of The Stern Review) and Andrew Simms (the unofficial ambassador of the New Economics Foundation). Stern opened by saying that he was not going to talk about “growth indefinitely”, because — in the words of Woody Allen — “eternity is a very long time, especially towards the end”. He did, however, say that he believed growth is needed over the next twenty to thirty years to drive investment and innovation to avoid climate change.

Stern’s reasoning was challenged by Andrew Simms, who provided one of the liveliest talks of the event. He emphasised that relying on economic growth to solve our problems is not a scientifically credible strategy due to the multiple planetary boundaries that we face. Simms also highlighted the diminishing social returns of growth, and the appearance of “jobless, voiceless, and futureless growth”. He likened our situation to a man falling from a 100-storey building. The man will pass the first 99 storeys unscathed, and may become increasingly confident about his predicament, until he passes the final floor and his fall is abruptly ended. In closing, Simms suggested that economic policy should pass three tests: Does it reduce the pressure that we put on the environment? Does it make society more equal? And does it contribute to human well-being?

The second panel of the day moved on to ask the question, “Can we build a post-growth society?” The first speaker was Laurent Baumel, a French MP and member of the governing Socialist Party. He said it was useful to question the need for growth, and to challenge GDP as a measure of progress. However, he claimed that growth still remains necessary for the functioning of society. He seemed particularly concerned about what a lack of growth would mean for the government’s ability to reduce inequality and fight unemployment.

Claude Bartolone

Claude Bartolone at the post-growth conference, “An Innovative Society for the 21st Century” (photo credit/copyright: M. Brun)

Baumel’s talk was followed by my own contribution, in which I described some of the policy changes needed to achieve a prosperous economy without growth (ideas that are discussed in Enough Is Enough). I pointed to the weak relationship between economic growth and the level of employment and to the ways that greater equality may act as a substitute for growth. I also discussed the importance of financial reform, in particular the need for a full-reserve banking system. Finally, I stressed that the goal of a steady-state economy is not zero GDP growth. The goal is to achieve a high quality of life for all people within ecological limits, something that GDP can’t possibly measure.

My talk was followed by a contribution from Jean Pisani-Ferry, the director of the French Prime Minister’s economic policy planning staff. Pisani-Ferry claimed that a post-growth perspective was “fatalistic and Malthusian”, but did not respond to any of the policy proposals that I made, despite an attempt from the chair to get his opinion on these issues. Instead, he focused on the price system and the need to invest in low-carbon infrastructure while interest rates remain low.

The final speaker of the session, the former Swedish Environment Minister Lena Sommestad, emphasised the role of human capital and the need to invest in social programs. She made the important point that more equal societies are better at dealing with environmental problems like climate change.

The next two sessions focussed less on growth and more on social innovation, and I did not find them as engaging overall. One exception was a talk by Rob Hopkins, founder of the Transition Towns movement. Hopkins discussed what a bottom-up response to the challenges of a post-growth society might look like, drawing on examples from the Transition movement. He stressed that the main reason people are engaging in Transition projects is not the environmental benefit of these projects, but the social connections and greater sense of community that people gain from them.

The final session of the conference, which was entitled “What development model for the 21st Century?”, included contributions from Pascal Canfin (the French Deputy Minister for Development), George Papandreou, (the former Prime Minister of Greece), and Jeffrey Sachs (the well-known economist from Columbia University).

To my surprise, Sachs led with what was probably the most direct criticism of the pursuit of growth at the conference. He said that it’s a hard reality to accept, but growth is no longer a viable strategy for the planet, and politicians need to accept this. He said that even the notion of allowing developing countries to “catch up” before beginning the transition to a new development model is unrealistic. Instead, he emphasised that all countries need to pursue a new model of development, and not just “follow the one in front”. He was also the only speaker to raise the issue of the need to stabilise global population.

The strong speeches continued with George Papandreou, the former Prime Minister of Greece. Papandreou suggested that the collective response of policy makers to the Greek deficit, Lisbon Treaty, and Copenhagen Climate Change Conference had been wrong. These issues were dealt with separately, he lamented, when they should have been addressed together. He claimed that the Greek government had borrowed unsustainably in the name of increasing GDP, and the result was recession, unemployment, a democratic crisis, and no progress on climate change. He said that the financial crisis had happened too quickly for the political system to deal with, and that too much power now rested with institutions beyond national boundaries. He also said that politics had become unpopular and the trust of citizens had been lost, which made it difficult to implement big changes. Much like proponents of degrowth, he advocated a deepening of democracy as the solution. Finally, Papandreou suggested we need new indicators and new values, and that “maybe happiness is more important than GDP”.

Although the conference was high on rhetoric and low on solutions at times, I still believe it was a success. For the first time, politicians and researchers were discussing the possibility of a post-growth economy in the halls of the French National Assembly — no small achievement. It was clear from who was present, however, that the idea of a prosperous non-growing economy still resonates more with the left than the right. Moreover, it seemed like there were quite a few former left-wing parliamentarians offering their support. A more cynical person might question whether they would still do so if returned to power!

Nevertheless, as I was saying my goodbyes on the stairs of the National Assembly, Damien Demailly, the head of IDDRI’s New Prosperity program assured me, “This is only the beginning”.

Dan O’Neill is the coauthor of Enough Is Enough: Building a Sustainable Economy in a World of Finite Resources.  He is also a lecturer in ecological economics at the University of Leeds and the chief economist for the Center for the Advancement of the Steady State Economy.