Green Party conference panel: “The failure of the growth economy: towards new economic solutions”

I left this session with a very clear sense of where we need to go.

The highly practical point was made that what gets measured gets done. Need to two types of indicators – ecology side – how is the natural environment going? then on social side – measure the progress that we are achieving as a society? Then it is probably necessary to combine that (sensibly) into one number and make that the single goal of optimisation.

Sounds simple when you say it quickly…

Some of my notes from the session that help explain how I reached that conclusion…

Dan O’Neill
Centre for the Advancement of the Steady State Economy

What is wrong with the growth economy?
Biophysical limits on growth
Even if it could continue, no longer desirable, not making people given any happier
Growth is driven by increasing debt – no longer sustainable or desirable

Increasing production and consumption as measured by GDP (i.e. money spent) and seeking to maximise it is a. fairly recent policy goal. It was developed (as GNP) by the allies during WWII as way to maximise wartime production. Since then we have basically continued with model of wartime economy.

What this ignores is that the economy is a sub-system of the environment – as it grows have to put more resources, and there are more wastes that the environment has to absorb.

GDP depends strongly on energy supply – map 130 countries against each other, very close correlation. Still highly dependant on fossil fuels, but peak oil appears imminent.

The statistic of the ecological footprint depends on how much land society needs to produce resources and assimilate waste – grows with GDP. Up until now it has only dropped during recessions.
We, i.e. the human race, now have an ecological footprint greater than suitable land – we are using resources faster than can be generated and producing wastes faster than they can be absorbed.

Steady state economy: what does this mean?
Stable population
Stable consumption
Energy and material flows minimised within ecological limits
Constant stocks of human built and natural capital

Sustainable scale
Just distribution
Efficient allocation (still a role for markets, but careful not to apply to inappropriate things)
High quality of life

Policies need
1. Limit the range of inequality in income distribution
(Currently growth is used as an excuse to avoid dealing with poverty)
2. Shorten the working day, week and year
3. Reform monetary system

Nic Marks – New Economic Foundation

If you measure the result of use of discretionary time – If spend it building friendships get much better return than building income in terms of happiness.

We need to move from asking “which products?” to “whether products?” – do we need them?

Molly Scott-Cato
National debt is a means of transferring wealth from poor people to rich people. People who have money now get income. Poor people pay in future to pay back.
1. Taxation
2. Gilts/treasuries/govt bonds are how govts spend money from the future
3. Creating money directly – “quantitative easing”

Shortage of employment has become more important than the shortage of products. Now we have to keep increasing production to keep people employed. But can’t keep increasing amount of stuff we make because of environmental constraints.

Going to have to move away from fossil fuels. When talk about efficiency and techno progress have substituted fossil fuels for human labour. Have to move back in some ways to human labour. Agriculture for example going to have to move back to having farmers. We do not want to not bring back drudgery from 18th and 19th century habits, but can use renewable energy sources to prevent that happening.

Had we not bailed out banks we would have had a catastrophe. But we need to make sure this doesn’t happen again – we can’t stay in an economic system that is unstable and enviro destructively. Should have been done with more political control and eco management.

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