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How Studying in Asia Made Me See the Need for a Steady State Economy

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by Jan de Graaf

Crossing the border from Singapore to Malaysia allows anyone to see the real-life benefits that can come with economic growth. Singapore is modern, prosperous, organized, clean, safe and efficient. Malaysia less so. On Malaysia’s side of the border the roads aren’t as good, the traffic signs not as clear, the sidewalks not as clean and the greenery not as well maintained. Singapore’s transformation looks impressive, especially since it was expelled from Malaysia only in 1965.

I noticed this cross-border difference during a two-year master’s program in public policy at the National University of Singapore. Soon I learned that Singapore’s rapid economic transformation came with considerable tradeoffs. A lack of political freedom is one of them. Singapore’s political system — dominated by one ruling party since independence — has yet to prove its resilience. But Singapore’s economic growth has provided obvious benefits too; many citizens in southeast Asia would forego political freedoms for Singapore’s level of prosperity. Who wouldn’t want to raise children in a safe, efficient, tropical but air-conditioned country with little corruption and top-quality education and healthcare?

Paradoxically, the answer seems to be: Singaporeans themselves. Singapore has one of the lowest fertility rates in the world. The government is vigorously encouraging couples to have babies, though so far with little effect. The former prime-minister Lee Kuan Yew — one of Singapore’s founding fathers — stated last year that Singapore can “fold up” if citizens do not reproduce. He said, “The answer is very difficult but the problems, if we don’t find the answers, are enormous.” Like many other countries, Singapore is being blinded by fears of a shrinking population and ignoring an obvious fact: one of the tiniest countries in the world can’t grow its population forever. The optimal population size is likely less than what it is now, not more.

Singapore’s population has increased almost 280% since independence: from 1.9 million in 1965 to 5.3 million people today. Its land area, on the other hand, has increased by only 23% (it was 224 square miles at independence and after some reclamation of land from the sea, it is now 276 square miles — about the size of Chicago). The country is squeezed in between Malaysia, a narrow sea strait and Indonesia. Physical expansion in such a physically bounded space cannot continue indefinitely. It has to stop growing at some point, a principle that applies not just to the number of people, but also to economic production and consumption.

Singapore and Malaysian Slum

The glitz of Singapore (photo by C. Andersson) and the slums of Malaysia (photo by D. Nunuk) are different, but equally unsustainable results of continuous economic growth.

Singapore like any country, needs to achieve demographic, political, economic and environmental sustainability. Maintaining a healthy environment is often under-appreciated, even though it is just as important as (and directly related to) the other types of sustainability in this list. I recognized this when I lived in China during a semester abroad and traveled through other parts of Asia. I breathed the toxic air in Beijing and Shanghai, walked through piles of waste in India’s urban slums, and saw the vast palm-oil plantations that have replaced tropical forests in Malaysia and Indonesia. If all these countries were to emulate Singapore, which is in a state of ecological overshoot, the environmental impact would be disastrous.

China seems to be doing its best to follow in Singapore’s ecological footsteps. It has managed to lift more than 600 million people out of poverty in roughly thirty years, an unprecedented achievement. Real GDP growth averaged 10% per year from 1978 to 2011. Its economy is more than 30 times bigger than it was in the late 1970s. It will soon be the biggest economy in the world. At the same time, China is in absolute terms now also the world’s largest energy consumer, greenhouse-gas polluter, crop importer, cement consumer and potash consumer, to name only a few things. How many more examples of explosive growth like China’s can the planet withstand?

India, another Asian giant, cannot do the same thing China has done. India has about as many people as China (1.2 billion versus 1.35 billion; each country has about one-sixth of the world population). Yet, India’s economy is less than one-fourth the size of China’s as measured by GDP. What if India’s economy had already grown to the size of China’s economy, with similar physical inputs (e.g. minerals, food, coal, etc.) and outputs (e.g. air pollution, soil depletion, biodiversity loss, etc.)?

Clearly, we need to take steps to achieve sustainable and equitable prosperity around the world. But trying to achieve prosperity through ever more growth — a method that irreversibly damages the planet, depletes natural resources and destabilizes societies over the long term — is not the way. The elephant in the room, the global problem that needs to be solved is “us” — the rich, industrialized part of the world that generates an unsustainable ecological footprint. “We” have only been able to live beyond our means because enough other people don’t. Communities in rural India, Namibia or Costa Rica could continue living their lives, with modest ecological footprints, for centuries without being a threat to global civilization and the planet. “We” in Europe, North America, Singapore, Shanghai and other rich parts of the world, on the other hand, cannot.

Still, many people in the world aspire to the lifestyles of Singapore, coastal China and the West. What if more and more people demand their fair share? Aside from the energy received from the sun, the Earth is a closed system with finite resources, so “we” the over-consumers have to get used to living with a much more modest ecological footprint. The predicament of the over-consuming countries raises some fundamental questions: how can we call our current economic growth “progress” if it can never be attained by all? And how can we call our current economic growth “progress” if it is based on depleting precious nonrenewable resources?

Real progress would take the form of new political and economic models that achieve a sustainable and resilient equilibrium. Unfortunately, as my home country (the Netherlands) and the nations I visited in Asia are demonstrating, we are far from it. That’s why I volunteer with CASSE to promote the concept of a steady-state economy. The over-consuming nations of the world are teaching an important lesson: the current spoils of continued economic growth come with a spoiled foundation for achieving continued prosperity in the future. Are we smart enough to heed the lesson?

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Since graduation in Singapore, Jan de Graaf has been an intern at the United Nations headquarters and a trainee at the European Commission. He now works in the clean energy sector in Africa for an American start-up company.

The Top Three Actions to Fix the Economy

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by Rob Dietz

Fixing the economy will require more than tax code tweaks and stock market peaks.  Anyone who’s been paying attention knows that we need big changes to the way we run things on this planet. Even a partial list of today’s social and environmental problems sounds grim:

  • An unfathomable number of people (2.7 billion) live in poverty, scraping by on less than $2 per day.
  • Our penchant for burning fossil fuels has increased carbon dioxide in the atmosphere such that scientists are throwing around phrases like “runaway climate change.”
  • National governments are drowning in debt, while the global financial system teeters on the verge of ruin.
  • The health of forests, grasslands, marshes, oceans, and other wild places is declining, to the point that the planet is experiencing a species extinction crisis.

ResultEnoughIsEnough_Final_LoRess like these arise because the global economy has grown too big for the broader systems that contain it. We have too many people consuming too much stuff. Sure, the engine of economic growth has driven technological advances and provided a dizzying array of consumable goods. But it’s hard to argue that these material benefits outweigh the costs of social breakdown and environmental upheaval.

So we need a systemic change, but what are our options? We could try to increase the size of the planet, or try to find another one that’s habitable. But maybe it would be more prudent to focus on changing the economy. That means shrinking, and then stabilizing, the economy so that it can meet humanity’s needs while conserving and protecting the ecosystems that support life on Earth. The book I wrote with Dan O’Neill, Enough Is Enough, describes policies to do that, but as Peter Victor has noted:

The dilemma for policy makers is that the scope of change required for managing without growth is so great that no democratically elected government could implement the requisite policies without the broad-based consent of the electorate. Even talking about them could make a politician unelectable.

Victor’s statement rings true. For example, in the last U.S. Presidential election, the candidates sparred with each other over who could grow the economy faster and create the most jobs. Suppose that instead of trying to “outgrow” his opponent, President Obama had run on a platform of stabilizing the economy. You can almost hear President Romney’s inaugural address about more oil pipelines, more highways, more consumption, more, more, more. But to the climatologists, conservation biologists, and ecological economists (and even the butchers, bakers, and candlestick makers) who are tracking the limits to growth, it is becoming increasingly clear that we need to make room for our leaders to discuss economic stabilization. It’s time for them to begin working on an economy that aims for enough instead of always chasing more.

Victor_Managing_wo_GrowthFrom Victor’s quote, we can deduce the top three things we need to do to begin the transition to such an economy.

1. Achieve widespread recognition that our planet is finite and that our economy has to fit within ecological limits. Politicians can’t talk about the limits to growth because most of the electorate remains unaware of the limits. Even with increasing attention paid to climate change and other developing crises, the conversation rarely turns to overconsumption in the economy. Schools are not teaching ecological economics, and people are too distracted by the routines of daily life to pay much attention. We need compelling stories and broad public education to get people discussing critical topics  such as the relationship between environmental and social systems, humanity’s place within nature, and the benefits of a steady-state economy.

2. Provide a set of practical policies for achieving a steady-state economy. All citizens (even the politicians) need to understand what can replace the growth-obsessed policies in use today. As soon as people begin to get a feel for how a well-conceived set of steady-state policies can outperform the obsolete policies of endless growth, politicians will gain the broad-based support they need to overhaul the system. The heart of Enough Is Enough describes this set of policies, but even a quick glance at them confirms Victor’s point: the scope of change required is indeed great. That’s why we need more than just awareness of the problem and a set of policy proposals.

3. Cultivate the will to act. Economic changes won’t materialize on their own. People have to want out of the current system, and they have to demand the transition to a new one. Without such pressure, entrenched elites (in both politics and business) have no incentive to overturn the status quo. There’s an awful lot of networking and organizing to be done.

With these three actions, we can get the economy we want and the planet needs. The unelectable politicians will be the ones who cling to the wishful thinking of perpetual growth. It’s time to take a stand, to put aside the destructive mania for more, and let our lawmakers know that enough really is enough.