Part 1 of a 3-part series
As you look around at what is now 5 years of temporary financial crises and market uncertainty, then consider the Occupy movement and rising concern about systemic inequality and Jeremy Grantham’s views on the end of cheap resources, what do you think? When you add in climate change and associated economic risks, then peak oil, then high and rising food prices, are you getting nervous yet? Is this just one more period of a “bad few years”, or is there something more profound going on?
If your answer is the latter, that perhaps we have a system problem, then you’re not alone. As if out of nowhere, the long acceptance that economic growth is always good and would go on forever, is slowly but surely breaking down. For a long time one couldn’t even raise this idea without being ridiculed. Environmentalists like myself had to always couch it as “growth is not bad, it just needs to be green growth”. Political leaders who didn’t support and deliver growth were no longer political leaders, because it was accepted that delivering economic “prosperity” (i.e. more growth), was essential to political success and survival.
Now we are facing reality. Whatever one’s political philosophy or view on how things should be, the facts are pushing philosophy out of the way. The issue is no longer if growth is good or bad, it’s that growth is coming to an end. The global growth economy is – messily and inconsistently – grinding to a halt. This is not a few bad years, this is game over for the economic philosophy that has guided human progress for hundreds of years.
It will still take some time given the mighty political, economic and cultural momentum behind it, as well as the power of our denial, but the signs are clear that both the actual end of growth and the breaking down of denial has begun.
Let me repeat, I’m not talking here about the long philosophical debate on the relative merits of growth – the argument that, for rich countries, getting richer no longer improves our average quality of life. What we face now is not a political choice – it’s too late for that. We have put in place the processes that will force the end of growth and nothing can now be done to change course.
Denial will still be the dominant response for some time. A recent UN report on this topic, led by 22 global political leaders, raised an urgent call for greener growth, pointing out the core risks to progress in our current approach. They don’t yet accept that infinite growth is not possible, but they at least understand that continuing our current approach isn’t possible either.
What they and others are realising is that economic growth that increases GDP at the expense of our natural capital, is actually what Herman Daly calls “uneconomic growth”. It’s what draws Joe Romm from Climate Progress to say the global economy is a giant Ponzi Scheme. Adding in the issue of crushing debt, Richard Heinberg’s excellent new book “The End of Growth” has joined in calling time on the growth model.
What they all know is that we basically only have growth now because we’re taking it from the future, which makes it not actually growth at all – just debt driven consumption. And we know from recent experience where that leads us…….
Next week in this 3-part series we will consider China as an accelerated example of the upside and downsides of growth. We welcome and encourage your comments and input.