The Tyranny of Growth – How Raising Our Standard of Living Destroys Our Quality of Life

In 1972 the world respected Club of Rome issued it’s report, Limits to Growth which concluded:

Conclusions

After reviewing their computer simulations, the research team came to the following conclusions:[2]: 23–24 

1. If the present growth trends in world population, industrialization, pollution, food production, and resource depletion continue unchanged, the limits to growth on this planet will be reached sometime within the next one hundred years.[c] The most probable result will be a rather sudden and uncontrollable decline in both population and industrial capacity.

2. It is possible to alter these growth trends and to establish a condition of ecological and economic stability that is sustainable far into the future. The state of global equilibrium could be designed so that the basic material needs of each person on earth are satisfied and each person has an equal opportunity to realize his individual human potential.

3. If the world's people decide to strive for this second outcome rather than the first, the sooner they begin working to attain it, the greater will be their chances of success.

— Limits to Growth, Introduction

The introduction goes on to say:

These conclusions are so far-reaching and raise so many questions for further study that we are quite frankly overwhelmed by the enormity of the job that must be done. We hope that this book will serve to interest other people, in many fields of study and in many countries of the world, to raise the space and time horizons of their concerns, and to join us in understanding and preparing for a period of great transition – the transition from growth to global equilibrium.

We can contrast this with the general societal term for economic disaster, referred to as a recession, although in reality it is more a matter of economic decline rather than disaster, but mention the word and wait for the ensuing panic.

The Canadian Encyclopedia defines recession as:

A recession is a temporary period of time when the overall economy declines; it is an expected part of the business cycle. This period usually includes declines in industrial and agricultural production, trade, incomes, stock markets, consumer spending, and levels of employment. In purely technical terms, a recession occurs when two or more successive quarters (six months) show a drop in real gross domestic product (GDP), i.e., the measure of total economic output in the economy after accounting for inflation. In this sense, recessions are broad and can be particularly painful and challenging times for a country.

It is ironic that we have a problem, unrestrained growth that we know is not just bad for the planet environmentally but also a threat to our economic system and yet we consider the solution, degrowth as the worst thing that can happen to the economy.

The middle class of western industrialized countries have been taken in by the myth of raising one’s standard of living being the be all and end all. The point of an increased standard of living is to increase one’s quality of life which is about more than just producing and consuming more stuff at the expense of the habitat we have to live in. Indeed this myth is used to promote an anti-taxation theology that leads to the under-funding of the very things that increase a society’s quality of life, health care, education, social safety nets and environmental protection among others.

Yes a certain level of income is necessary for a good quality of life and this can be provided by raising minimum wages to a living wage and providing a guaranteed annual income (universal basic income) for everyone.

The problem is that we measuring the wrong things when we want to measure how successful our economies are. A strong economy must be a reflection of a strong society. If we want to measure the success of our society it is not by measuring how rich the wealthiest people are or even so-called per-capita GDP numbers that are distorted by excessive wealth and income levels of a minority of privileged people. If we want to improve the quality of life of a society we must improve everyone’s economic status and build a society that provides everyone with more than just more stuff.

We need to start by measuring poverty and inequality and setting our economic goals at reducing those rather than increasing abstract measures of stuff acquired.

Channeling Stephen Harper

"You know that recession we just had. The one where you lost your job, your home and your pension. It really wasn't that bad" - Stephen Harper March 10, 2011

Building A New Society From The Collapse of Capitalism

This is the first of a series on the economic crisis opportunity.

Karl Marx said “from each according to his ability, to each according to his needs”. In other words we are all expected to contribute to society what we can and only expected to take what we need. Under socialism laziness and greed are both vices.

Unfortunately under modern capitalism greed is considered more of a virtue than a vice and has become the driving force of the economic system. It is greed that has brought capitalism to where it is today.

So is socialism the answer. Rather than try to insert a lengthy treatise into the middle of this post let us just all agree that we are not ready to move to that stage at this point in time.

But we do need to change our way of thinking and the way we live in this world for the good of the planet and it’s peoples.

Capitalism has simply gotten out of control, especially American capitalism where most corporations today operate on the principle that “corporate officers have a fiduciary duty to maximize shareholder value”, that is profits, without regards for employees or customers, or communities, or the broader public good.

We have seen it in our communities with the decline of local businesses and the growth of mega corporations. As owners become more disconnected from their businesses concerns for workers and customer value disappear to be replaced by the pursuit of, not just a fair profit, but maximized profit.

And we are all complicit as we sell out our friends and neighbours who worked in the locally owned businesses and local factories, for cheap goods produced abroad by near-slave labour.

Alongside greed, but driven by it, are false assumptions. The first false assumption is that wealth creation is all that matters, and wealth redistribution is an evil of socialism. The assumption being that as long as we keep creating wealth the rich will keep getting richer but enough “crumbs” will trickle down to working people and the poor to keep them happy. This is based on the same theory that sees recessions as the worst thing that could possibly happen. But it is a theory based on continuous and unlimited growth, a dangerous false assumption, The planet simply does not have the resources to support unlimited economic growth without self-destructing.

So where do we go from here. For the moment those responsible are still living their lavish lifestyles, pausing only to fly to Washington in their corporate jets to ask the common people to bail them out with their tax money. But the fact is that the American economy, and even the Canadian economy is so dominated by these mega corporations that their failure would have serious implications for working people.

In the short term governments need to keep the economy from collapsing, for the broader good, But they should not do it on the corporations terms but in a way that serves the common people. In the long term this is an opportunity to change the way the economy works – to an economy that serves the common good, not just corporate interests.

We have seen that countries with mixed economies, in particularly Canada, with a greater degree of government regulation and involvement in the economy have done better than the American pure capitalist approach. We need to learn from that, and build on it. But we need to go much further in building an economy for the people and the planet rather than an economy just for the corporations.

We can build an economy that can provide everyone with a decent quality of life if we responsibly and sustainably utilize and distribute the planet's resources.

Future posts will look in more detail at what we need to do in the short and long term.

NewSpeak Environmental Economics

According to an article on the CBC website:

Canada remains committed to the principles of the Kyoto protocol, but meeting its promises on reducing greenhouse gas emissions would require taking Canada into a recession, Environment Minister John Baird said Thursday.

Appearing before a sometimes hostile Senate environment committee in Ottawa, Baird said a Liberal bill calling for the government to honour Canada's commitment under the Kyoto treaty is "bad economic policy" that would result in 275,000 Canadians losing their jobs by 2009.
...

The economics just don't add up," Baird said, and warned that gasoline prices would jump 60 per cent and natural gas prices would double.

There is only one way to make it happen: to manufacture a recession."
...

I do not know what definition of a recession the Environment Minister uses but it is not the one I was taught. In a recession economic activity and productivity declines as does employment, disposable income and spending. This inevitably leads to a reduced demand for energy such as gasoline and natural gas. The Minister thinks this will lead to an increase in the price of gasoline and natural gas. I do not know what definition of the law of supply and demand the Minister uses but it is not the one that I was taught, that requires a reduction in price in response to a decline in demand.

I suppose, given that level of understanding of economics, we cannot expect the Environment Minister to understand the economic benefits to be gained from a more energy efficient economy driven by new environmental technologies that will be in high demand by countries and economies that understand what the disastrous economic impact of failing to act on global climate change will be.

I suppose we should be thankful that Mr Baird is not the Minister of Finance.