Sustainable growth; an oxymoronic myth

Above: Sustainable growth on a finite planet – it is an oxymoronic myth. Image credit: Ian McKay / Deeper Green

“What kind of growth would you like today? Angela Merkel suggested ‘sustained growth’. David Cameron proposed ‘balanced growth’. Barack Obama favoured ‘long-term, lasting growth’. Europe’s José Manuel Barroso was backing ‘smart, sustainable, inclusive, resilient growth’. The World bank promised ‘inclusive green growth’.

Kate Raworth, Doughnut Economics[1]

Reading Kate Raworth’s brilliantly assembled set of world leader quotes, one gets the feeling that they are all grabbing at straws, trying to make an old financial model fit for the Twenty-First Century. If you ask a financial expert to explain why we must have ‘economic growth’ they will tell you it is a basis for ensuring that each subsequent generation gets an improved standard of living, it is about making more for less and that we need a birth rate of at least 2.1 to ensure we have a population that can sustain our economy, or something along those lines. Economic growth is seemingly the central focus of policy and mission for economists, politicians and industrialists but is it right for the planet? Is ‘sustainable growth’ a real and achievable thing or is it just an oxymoronic myth?

Over the past decades we have seen monetary levers being pulled and pushed to maintain the illusion that all is well with our economic system. As the current system has an inexorable tendency for the rich to get richer and the poor to get poorer, every now and then rich nations have to agree to cancel developing country debt. More and more rich countries reach for the magic money tree for a bit of ‘quantitative easing’ or ‘recapitalisation of the banks’.

There is a distinction to be made about the type of growth we are talking about. There is growth in ‘environmental impact’ or ‘ecological footprint’ which directly impacts our planet and its ability to sustain and then there is ‘economic value added’ which in theory does not necessarily need to end in runaway climate change, resource depletion and species extinction. Unfortunately, the theory is more difficult to define in the real world and many believe that decoupling ‘human ecological footprint’ from ‘economic value added’ is not a realistic proposition[1]. So the question has to be asked, is growth-based economics the central reason why we are rushing headlong towards irreversible climate change and mass extinction events? It is one of those taboo subjects which never seems to be questioned hard enough. There are however a growing number of critics who are warning that we must move away from growth and start planning for ‘de-growth’.

“The earth has finite limits – a difficult idea for Americans to adjust to.”

John D. Rockefeller III (1906 – 1978)

Many have cited the industrial revolution as the major accelerator of humankind’s over-consumption of the natural world. It is certainly true that this is when society became really good at burning stuff and particularly of the fossilised carbon locked under the ground. However, it was not until we really started to mess around with the concept of money, particularly after WWII that economic growth and resource depletion really took off. According to James Bruges in The Big Earth Book a major hinging point was the Bretton Woods Conference in July 1944 when delegates from 44 allied nations got together to decide how the world financial system was going to operate in the post-war era. John Maynard Keynes proposed there should be a currency for trade between nations, the ‘bancor’ and a number of other rules to keep financial discipline and equilibrium running between nations. The US overruled, insisting that national currencies would suffice and that nothing but the dollar should be used to trade oil (the ‘petrodollar’). According to Bruges, “President de Gaulle called it “an exorbitant privilege”. The value of this privilege was limited so long as the dollar was linked to gold, but in 1971 President Nixon broke that link and the supply of dollars multiplied.”[3]

Many will cite the unprecedented raising of living standards during this time and rebuff any criticism of growth-based economics but these commentators completely ignore planetary depletion in their assessment. There were only a few voices expressing concern at what was going on including Rachael Carson and Bill Mollison who could see how industrialised forms of farming were causing a collapse to the eco-system. Others thought we would just run out of oil and gas by now. Planetary systems scientist James Lovelock also had his head in his hands, seeing the bigger picture of what was unfolding.

Around the time that Nixon was skewing the financial playing field, a team of economists and systems researchers were commissioned by the Club of Rome to study the effects of continual population and financial growth on finite Earth. The report entitled, The Limits to Growth came out in 1972 and its findings, although rubbished at the time, are worryingly close to our developing reality. The study used a computer model to simulate the Earth / human system interactions. In short, it predicted “…a rather sudden and uncontrollable decline in both population and industrial capacity”, with the former happening in the 2030’s and later happening in the 2020’s.[4] This might explain recent years of stagnant growth seen in many developed economies.

When our economy is working hard, in a crowded developed place like the United Kingdom, you can hear the deep droning din of our civilisation at work rolling across our townscapes and landscapes. You can even feel the ground quake with the clamour and thrust of transport, industry, farming and power consumption. How many of us endure the crazed rush of us all trying to be somewhere other than where we happen to be and all at the same time? We are all caught-up in lives stoked by the hedonistic mixture of aspirational desires implanted by commercial advertising and deeply embedded instincts to succeed.

Above: Humanity is not well equipped to respond to slow moving existential threats, like runaway climate change. Image credit: Ian McKay / Deeper Green

We do not question this way of life enough because as human beings we are not very good at reacting to slow-moving existential threats like climate change and the collapse of the biosphere.

Let’s face it, life is tough and for so many of us there is no spare time, cash or space available for rewilding, rain forest protection, seabed restoration, carbon capture or even insulating our own homes. The only way for most of the 8 billion people on this planet to exist is to continue to exploit rather than nurture its ever-reducing bounty.

Even if we try to pretend we can do growth by transitioning to a ‘green’ economy, we will never truly grasp the reality that exponential rises in economic intensity and population is inextricably linked to our depletion of the planet’s resources and it’s ability to sustain life. Our planet is not getting any bigger so how can growth as an economic and population model be sustainable? Are we ready to have a chat about that or just continue to ignore it?

Above: When it comes to a slow moving existential threat like human induced climate change, society continues to put its head in the sand. Image credit: Ian McKay / Deeper Green

As Kate Raworth points out in her book, Doughnut Economics, if you draw ever-rising gross domestic product (GDP) over time you get the familiar logarithmic rising curve that just keeps rising until it reaches the top of the diagramme.[5] The economic theory does not seem to include a proposal for what happens at the top of the curve for surely, on a finite planet, there must be a top? That is the bit our mainstream economic thinkers and political leaders continue to ignore or at least have no answer for. It is the mother of all head in the sand moments of human history as climate catastrophe and mass extinction events gather pace around us.

In a free-market economy, without imposed limits to kerb excessive consumption, our captains of industry are left to invent desires and wants we never realised we had. They take us further and further away from the basic needs of being alive on this planet. Their aim is to make their product offering part of a must-have lifestyle. The more desirable they can make it, the more of it we will purchase. This leads to an almost pathological inter-reliance between capitalism and consumerism. This economic system however almost always fails to accept any environmental cost in the business model. If we were to responsibly account for our use of natural capital, how many business plans would still be in the black?

Free-market leaders however are often more aware of the environmental situation than political leaders. At COP26 one of the big messages which came out of Glasgow in the autumn of 2021 was an acknowledgement from private industry that greener directions were clearly needed. For businesses to adopt more sustainable operations they stressed, policymakers would need to define the rules necessary for a level commercial playing field across international boundaries. The stumbling blocks though are the politicians who are only ever thinking about their election prospects, the policies that are going to be popular to voters and avoid at all costs anything which might put negative pressure on their own country’s GDP. Global agreements are needed urgently in this arena as are additional check and balance mechanisms to limit the environmental damage potential of a shamelessly ‘popularist’ election campaign.

The Covid lockdowns were miserable because we had to stay at home for weeks on end, people were dying in greater numbers than normal and an existential threat was a real and sudden menace in our lives. However, because of what we did in protecting ourselves, it gave us an unprecedented glimpse of a society which was quieter, calmer and consuming far less of our planet’s precious resources than when the economy was set to ‘FULL-AHEAD’. For a moment, the cultural and economic concerns of the Twenty-First Century were more focused on human need and well-being than it was on satisfying aspirational desires. Having had that opportunistic glimpse, should we not now be having an urgent and frank discussion about reshaping our unsustainable economic model into one which puts environment, basic human well-being and targeting equilibrium front and centre?

We need to get back to lifestyles and jobs which are about real and environmentally responsible activity; shift our life pursuits away from being consumers and exploiters of the planet towards being good custodians of it.

As James Bruges wrote in the Big Earth Book published in 2007, “We have already passed the limit of growth and any further economic growth may reduce nature’s ability to provide us with adequate energy, food and clothing. Agriculture has had to adopt unnatural practices that conflict with nature’s processes. Individual problems with health and the environment are being swamped by pandemics and general degradation. Virtual wealth, concentrating power in the hands of a few, has now reached unimaginable levels and is causing endemic conflict and the breakdown of society. Economists have created a make-believe world that has nothing to do with reality. To aim at yet further economic growth is suicidal.”[6]

When things are really bad, as indeed they have been recently, we ask ourselves, what do we as human beings, as socially dependent families and communities, need to keep going? How can we thrive and be happy in ourselves, be fulfilled with our lives? How do we nurture and sustain? How do we do that within the carrying capacity of the Earth’s ecosystem? If we build an economy based on answers to those questions, we might just have a chance of keeping spaceship Earth going.

[1] Raworth, Kate, Doughnut Economics, Penguin Random House, London, 2017. Pg. 41.

[2] Randers, Jorgen et al, Limits and Beyond, Ed. U. Bardi and C. A. Pereira, Exapt Press, 2022. Pg. 46.

[3] Bruges, James, The Big Earth Book, Alistair Sawday Publishing, Bristol, 2007. Pg. 131.

[4] https://en.wikipedia.org/wiki/The_Limits_to_Growth

[5] Raworth, Kate, Doughnut Economics, Penguin Random House, London, 2017. Pg.39.

[6] Bruges, James, The Big Earth Book, Alistair Sawday Publishing, Bristol, 2007. Pg. 101.