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Book Review: Prosperity without Growth: Economics for a Finite Planet

Aiden Lloyd is the temporary Coordinator of the Irish Network of the European Anti-Poverty Network and a member of the board of the Society of Cooperative Development Studies Ireland (CDSI). He was previously the national community development & equality coordinator with Pobal, an organisation that manages social inclusion and equality programmes on behalf of Government and the European Union. He has been involved in a range of community development, local development and regeneration initiatives in Ireland and Europe.

This book looks to our future viability, indeed our very survival, and in doing so presents a number of harrowing dilemmas. How do we reinvent an economic system that is leading us towards the destruction of life on the planet? How do we break our obsession with material goods? And do we have governmental systems strong enough to embark on the massive transformative processes required to steer us away from environmental destruction?

At a time when we are still anxious to find culprits, rather than systems, to blame for economic collapse, Tim Jackson is forthright in pronouncing the unsustainability of growth-led models of development. He begins by stripping capitalism down to its technical core, a system whereby people invest their labour and savings in businesses in return for an income; this in turn provides the capital required to produce goods upon which people spend a portion of their income and thus complete the cycle. The problem arises from the sheer efficiency of capitalism, which will eventually require less labour (and greater output) necessitating continuous expansion to create new jobs. This introduces the first dilemma.

Growth is necessary for employment but utterly unsustainable in climate change terms. Growth is also a core requirement for third world countries. Here Jackson uses the evidence of Wilkinson and Picket to illustrate how growth is necessary to raise the health and well-being of millions in these countries – until it levels off as core requirements are met. But why do advanced industrial countries, which incidentally produce most of the earth’s carbon emissions, need to maintain this level of growth? The answer is linked to the human condition and the appetite for novelty.

It appears that humans are not just mindless consumers of labour saving devices and gadgets but actually use material goods to carry out a social dialogue – to assert status, express aspiration, define and convey who they are, etc. When this is added to the ‘creative destructiveness’ of capitalism – the continuous overthrow and replacement of technical processes and products – we have the ingredients that maintain long-run growth. The obsessive entrepreneur and the pathological consumer are at the nub of the problem, but there is another influential player, one, hopefully, without obsession or pathology.

Jackson contends that novelty-driven consumption is almost entirely socially constructed. While the needs that are met through consumption may be innate, the patterns of behaviour that we adopt to meet these needs are set by institutions; and institutions are set by the state. The majority of democratic states govern within an understanding of the social contract. This involves individuals yielding up some of their individual freedoms for the protection and common good that the state provides. In return the state introduces rules and regulations to protect and enhance the commonly accepted virtues and aspirations of society. If we take the premise that individuals tend to be short-sighted, capricious and acquisitive then rules and regulatory institutions protect us from the follies of impulse and instability – marriage, health and, dare one need reminding, banking, are illustrations of this. The problem is that the state has taken on the prioritising of economic growth as the provider of common wealth and well-being and has contoured institutions to promote novelty and consumption, while simultaneously setting ecological goals: Jackson points to the UK’s widely acclaimed Sustainable Development Strategy sitting within one of the most extreme liberal market economies in the world as an example of this paradox.

So what of the solutions? How do we delink development and prosperity from destructive growth? In drilling down for answers, Jackson assembles a compelling package of measures that we need to adopt. Many are not new, but it’s the comprehensive nature of the package that makes it different. Encouraging an alternative hedonism directing us towards sources of satisfaction and social fulfilment that lie outside the conventional market would free us from material consumption. Promoting social enterprises capable of delivering social and economic goals would also reduce our blinkered focus on profit as the sole motivator. Breaking our dependence on carbon energy sources and investing in alternative sources and energy efficient buildings and transport is another. Facilitating investment in different forms of productive activity, where yields will be smaller, more long-term or even unquantifiable in monetary terms, is another change that will require a much greater presence of the state in financial and commercial activity.

Jackson starkly sets out the complex interplay of economic, social, political and environmental dynamics that need to be factored into solutions, and in indentifying the scale of transformation and sheer endeavour required to divert us from destruction. He pins most of his hopes on governance, and the capability of states and global networks to make decisions that protect our long term interests. But is this within their capabilities? In terms of the potential of the nation state only the USA is influential enough to provide leadership, and it may be too tightly locked into an ethos of individual freedom to be a torch bearer. Global networks and institutions do not at first glance seem like a better proposition – Rwanda, events in the former Yugoslavia and the inability to alter the dynamics of famine and imbalanced development cloud any hopeful perspective. Yet there are some indicators of hope for audacious interventions of the required scale. For instance, in this, the biggest economic downturn since the Great Depression, governments have committed $7trillion to save the global banking system, a truly massive collective undertaking. Are we capable of an even more profound intervention?

This is a compelling book, if not an easy read at times – particularly when it gets into macro economic theory and in driving the reader to engage with new concepts –  but it is worth bearing with for its analytical honesty and its ability to maintain a direct line between problem and solution. It is particularly important for those involved in working with the materially poor, the socially excluded and those who experience inequality, for it is they who will first bear the brunt of climate change. I believe this is a most important book of our time – merging as it does the issues, concerns and insights essential for the transition to a new sustainable and equitable society. The responsibility now rests with environmentalists, community workers and social activists to carry these frameworks of understanding out to a wider constituency, preparing the way for the more intense participative dialogue that will be required between state and society if we are to be consensually directed towards our very survival.

[1] The Spirit Level: why more equal societies almost always do better: Richard Wilkinson & Kate Pickett. Alan Lane 2009

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