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Reviewed by Charles Siegel When a British government commission publishes a report calling for an end to economic growth, it suddenly seems that we live in a world that is changing its direction. Growth has been the central goal of economists since the beginning of the industrial revolution. But Prof. Tim Jackson, the Economics Commissioner of the UK's Sustainable Development Commission has written a book that sums up the current state of our knowledge about economic growth and that demonstrates convincingly that growth should end. We have all heard about the environmental effects of growth, such as resource depletion and global warming, but the conventional wisdom says that better technology can deal with these problems. This book argues that, if growth continues at its present pace, better technology alone cannot reduce greenhouse gas emissions sufficiently. "The global economy is almost five times the size it was half a century ago. If it continues to grow at the same rate the economy will be 80 times that size by the year 2100." That rapid rate of growth is likely to overwhelm our attempts to use better technology to reduce greenhouse gas emissions: by 2050, carbon emissions per unit of gross world product would have to be 130 times lower than today to avoid the worst effects of global warming. If we are serious about controlling global warming, we must adopt better technologies as quickly as possible, but we must also move beyond the technological fix and deal with economic growth itself. Reining in growth will not necessarily involve hardship. The book summarizes the evidence showing that, beyond a certain point, growth does not increase our well being. For example: We in the developed nations are at a point where economic growth does us little or no good. But economic growth threatens to do us and the rest of the world great harm by bringing global warming, resource shortages, and potential ecological collapse. Yet it is very difficult for us to break our addiction to growth. The conventional wisdom says that growth is needed to control unemployment and to promote economic stability. As we can see during the current recession, when growth stops and demand falls, businesses' revenues drop, which leads them to reduce their levels of investment and to lay off workers, which makes the economy less efficient and generates high unemployment. Growth also seems necessary to help us pay off our high levels of personal and national debt. In response to these concerns, this book cites the studies of Peter Victor, a Canadian economist, who has run computer models of how the Canadian economy would react to the end of growth with differences in macroeconomic variables such as the savings rate, the rates of public and private investment, and the length of the work week. Results are dramatically different with different values for these variables. In one run, the end of growth brings economic instability, high unemployment, and rising poverty. In another run, the end of growth brings economic stability, cuts both the unemployment and poverty rates in half, and reduces the ratio of debt to GDP by 75%. In part, the difference comes because the second scenario has a higher savings rate, a lower rate of private investment, and a higher rate of public investment. In addition "unemployment is avoided ... by reducing both the total and the average number of working hours. Reducing the working week is the simplest and most often cited structural solution to the challenge of maintaining full employment with non-increasing output." There are very few macroeconomic studies of this sort, and we clearly need more to help us make a successful transition to a slow-growth or no-growth economy. The book consistently emphasizes that a two-fold change is needed to end growth: in addition to these economic changes, we need social changes and changes in our values. Unfortunately, the book is weaker on these social changes than on economics. For example, it summarizes an essay by the economist Amartya Sen that calls for a shift from an economy that aims at opulence or at utility to an economy that aims at human flourishing, but it never provides a convincing vision of what this human flourishing could involve - a vision of what life could be like in a society where people have a comfortable standard of living and have abundant free time to develop their talents and their humanity as fully as possible. There is a long tradition of philosophical thought about this subject, going back to Aristotle and beyond, but this book, written by an economist, is not strong on philosophy. Despite this limitation, Prosperity Without Growth? is the best discussion available of the economic issues involved in ending growth. It should be required reading for everyone working to avoid ecological collapse. The fact that it is published by a British government commission gives me hope that we may do more than just avoid collapse. If we follow the suggestions in this book, we could have a far better world at the end of this century than we have today, with widespread prosperity that people devote not to consumerism but to living well. The entire book is available to read at http://www.sd-commission.org.uk/publications.php?id=914 Up to Top |
