So what would a steady state society look like?

When I went to the launch of Tim Jackson’s Prosperity Without Growth: Economics for a Finite Planet before Christmas, the London Review of Books shop in Bloomsbury was packed to the last usually-quiet corner, even though it was a foul, stormy evening. It was a curiously mixed crowd – environmental campaigners from the “respectable” (generally no dreadlocks) end of the movement, lots of civil servants with folding cycles, and a few real “suits” from the Treasury, as well as the usual large (since the crisis, enormous) collection of hopeful interns from just about everywhere.

Launching the book, Jonathan Porrit said, “This book is so subversive it won’t be allowed through the doors of Defra.” He gave a telling account of the launch of the report from the Sustainable Development Commission from which the book is a development: “No 10 in an unnamed street had gone ballistic. It was the weekend the G20 was in London to talk about kickstarting growth. It fell into a deafening media silence. It is a complex message and hard for people to get their head around.”

But, he said, there had been great public interest. The volume of downloads had been huge, and public meetings around the country had been held to discuss it. In Bath, 200 people had crowded into a small room and had two hours of intense discussion.

I’ve finally had time to read Prosperity Without Growth and while it is a sober book of economic theory, not flashy nor overtly radical in its language – it even contains a few traditional economists’ equations – I can now see why its ideas are so hard for traditional economic thinkers to stomach. And yet they are so obviously sensible.

The idea that there are ecological limits on the planet is one of the starting points – okay that even some traditional economists are starting to get a handle on, although as Jackson explains, none have developed any sort of macro-economic theory that starts to take account of the value of the natural world and the services it provides us – that flashy stuff like air to breathe, water to drink and soil to grow things in.

His use of Amartya Sen’s “capability for flourishing” (forced into polite academic notice by the writer’s Nobel Prize) is also within the range of most forward-thinking bureaucrats and academics. He quotes Sen on what this means for people’s functioning: “Are they well nourished? Are they free from avoidably morbidity? Do they live long? Can they take part in the life of the community? Can they appear in public without shame and without feeling disgraced? Can they find worthwhile jobs? Can they keep themselves warm? Can they use their school education? Can they visit friends and relations if they choose?”

So far, so in the environmental mainstream. But it is when Jackson starts to look at carbon decoupling – the idea that economic growth can continue so long as its carbon emissions (and implicitly or explicitly its other environmental impacts) are greatly reduced. Jackson makes it very, very clear that this is nonsense. (And this is where, as the Earthscan MD Jonathan Sinclair Wilson said at the launch, the Al Gores and Sir Nicholas Sterns are.)

“In a world of 9 billion people all aspiring to Western lifestyles, the carbon intensity of every dollar of output must be at least 130 times lower in 2050 than it is today. By the end of the century, economic activity will need to be taking carbon out of the atmosphere, not adding to it. Never mind that no-one knows what such an economy looks like. Never mind that decoupling isn’t happening on anything like that scale. Never mind that all our institutions and incentive structures continually point in the wrong direction. That dilemma, once recognized, looks so dangerously over our future that we are desperate to believe in miracles. Technology will save us. Capitalism is good at technology. So let’s keep the show on the road and hope for the best.”

Jackson takes to task even those generally “green” economists who have suggested adopting a service-based economy looks like a way out. He stresses that they mean something much more than the few Western economies we have now that have been so labeled (which mostly means they’ve exported the manufacturing jobs and their resource usage). What about these “new” service economies? Jackson says:

“So what exactly constitutes productive economic activity in this economy? It isn’t immediately clear. Selling ‘energy services’, certainly, rather than energy supplies. Selling mobility rather than cars. Re-cycling, reusing, leasing, maybe. Yoga lessons, perhaps, hairdressing and gardening, so long as these aren’t carried out using buildings, don’t involve the latest fashion, and you don’t need a car to get to them. The humble broom would need to be preferred to the diabolical leafblower, for instance. The fundamental question is this: can you really make enough money from these activities to keep an economy growing? And the truth is we just don’t know. We have never at any point in history lived in such an economy. That doesn’t mean we couldn’t. Again, having a convincing macro-economics for such an economy would be a good starting point. But it sounds at the moment suspiciously like something the Independent on Sunday would instantly dismiss as a yurt-based economy.”

But Jackson says, there is still something here, in the valuing of jobs and activities that clearly do add to human flourishing, and that yet traditional economics dismiss as “inefficient," “unproductive.” “Their labour productivity is ‘dismal’ — in the language of the dismal science.
This is where Jackson, unusually in the book as a whole, lets his heart hang out:

“We’re getting perilously close here to the lunacy at the heart of the growth-obsessed, resource-intensive, consumer economy. Here is a sector which would provide meaningful work, offer people capabilities for flourishing, contribute positively to community and have a decent chance of being materially light. And yet it is denigrated as worthless because it’s actually employing people … it shows up the fetish with macro-economic labour productivity for what it is: a recipe for undermining work, community and environment.”

And, as he’s explained earlier, it is the hunt for and success in achieving “improved productivity” that is one of the drivers of the desperate seeking of economic growth – for without it, and with the “improved productivity,” unemployment grows. Yet of course, as Jackson points out, there is another alternative in a non-growing economy – working shorter hours. (And he quotes the sociologist Gerhard Bosch: “One of the fundamental pre-conditions for the working time policy pursued in Germany and Denmark was a stable and relatively equal earning distribution.”)

And in the economic model Jackson is working towards, he suggests restricting working hours is likely to be one of the key levers of economic management.

Another change he suggests is needed is in balance between investment and consumption. He looks at the need to balance new investments in energy efficiency and fossil-fuel replacements:
“If we invest too slowly, we run out of resources before alternatives are in place. Fuel prices soar and economies crash. If we invest too fast, there’s a risk of slowing down the economy to the extent that the resources required for further investment aren’t available… If the savings ratio is increased and more of the national income is allocated to investment, the flexibility to achieve the transition is higher.”

Which is where Jackson gets even deeper into politics:

“The ecology of investment will itself have to change. Investment in long-term infrastructures and public goods will have to be judged against different criteria. And this may mean rethinking the ownership of assets and the distribution of surpluses from them. … The public sector is often best placed to identify and protect long-term social assets. Public sector rates of return are typically lower than commercial ones, allowing longer investment horizons and less punishing requirements in terms of productivity.”

He acknowledges that traditional industries will have to continue, if on a much reduced scale, and in significantly different ways: “Manufacturing will need to pay more attention to durability and repairability. Construction must prioritize refurbishment of existing buildings and the design of new sustainable and repairable infrastructures. Agriculture will have to pay more attention to the integrity of the land and the welfare of livestock. Financial intermediation will depend less on monetary expansion and more on prudent long-term stable investment.”

He sums up the three clear principles he wants this economy to operate on:
• Positive contribution to flourishing
• Provision of decent livelihoods
• Low material and energy throughput

And his main economic levers are:
• Structural transition to service-based activities
• Investment in ecological assets,
• And, working time policy as a stabilizing mechanism.

You can see why UK bureaucrats might have filed this in the

"too-hard" file. It says: go back to the drawing board, forget everything learnt in Economics 101 and thereafter, and create an entirely new model for the economy. All previous assumptions must be re-examined. That’s a tough assignment, and as Porritt said at the launch, bureaucrats usually want to know what they can do about a report on Monday.

But while Jackson clearly doesn’t have – and doesn’t claim to have – all of the answers, he got a start here of an entirely new thinking as well as some practical suggestions. For example: if you hear someone proclaiming an innovation as great for productivity, ask questions (and if it means workers won’t spend 10 hours a day breaking rocks, great, but if it means a machine replaces a person doing a decent, proper job, ask why? then ask again).

8 Comments

  • January 17, 2010 - 11:09 am | Permalink

    I think long-working hours are one of the UK’s biggest ills. It not only makes people over-worked and exhausted, contributing not only to ill-health, but to drug and alcohol misuse (as people try to get their bodies to sustain their output), but it is one of the biggest cause of sexism as women with children or other caring responsibilities are frequently unable to work long hours and fulfill their other obligations. This leads to them stuck in low-paying, non-skilled and often part-time work. Long hours also continue to be expected of parents, despite no equivalent provision of childcare- or discussion over whether long hours of formal childcare are good for children, parents or society.

  • January 17, 2010 - 12:53 pm | Permalink

    I am a bit worried about this:
    “The fundamental question is this: can you really make enough money from these activities to keep an economy growing? …the truth is we just don’t know”
    It suggests that he hasn’t quite got it. The question is, how do we produced the money necessary to stop the economy growing like a Ponzi scheme, and turn it into a stable, manufacture, repair, reuse, recycle mode? At the moment, banks create nearly all the new money in the economy (money supply doubling rate =~10 years), by lending at interest. There are alternatives, but banks will do all they can to stifle competition. We need a sketch map of where we are trying to get to.

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  • January 19, 2010 - 5:34 pm | Permalink

    I don’t see why a carbon intensity 130 times lower than today should be impossible, if we were to get all our energy from nuclear and renewables.

    On productivity – surely this should be the friend of reduced hours, not the enemy. Obviously, you say we don’t want to be breaking rocks by hand, but I don’t see the difference in principle between one kind of labour-saving and another. If you’re against labour productivity then you’re in favour of wasting people’s time.

  • January 23, 2010 - 3:31 pm | Permalink

    Priosperity without more prosperity.

    Seems like a typical eco-fascist attempt to redefine words. Orwell understood.

  • January 24, 2010 - 8:14 pm | Permalink

    Hi Joe,

    On productivity – well imagine a nurse who sits all night comforting a dying patient. By all the productivity measure we use now that’s dreadful – she’s used all that time, and no measurable outcome at the end of it – but if I were that patient, I’d want her to do it.

    Neil, re prosperity, I didn’t go into it in the review, but Jackson looks at alternatives to our current definitions of prosperity, including those for which in part Amartya Sen won the Nobel – which means basically a happy, fulfilled life meeting your basic physical and social needs. And if you look at both Keynes and J.S. Mill, both assumed there was a point where there’d be enough stuff and the focus would turn to quality of life rather than quantity

  • January 25, 2010 - 2:29 pm | Permalink
  • Susan Levitt
    February 1, 2010 - 1:42 pm | Permalink

    Why does an economy have to grow in the first place? I have asked myself that question for years, and to date the only reason I have found is because Joe 1 wants to make more money than Joe 2, possibly to prove that he is a better human being than Joe 2 since it is no longer acceptable to hit each other with brickbats. The industrial revolution allowed humans to contemplate economic gluttony on a scale never before conceived. To my way of thinking, this gluttony results in all sorts of social and personal ills. So I say as Darwin aficionados say, “Change or die.”

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