No 2015 Posted by fw, July 25, 2017
“Anyone who believes that exponential growth can go on forever in a finite world is either a madman or an economist.” —Kenneth Boulding
“At the heart of the book lies a very simple question. What can prosperity possibly look like in a finite world, with limited resources and a population expected to exceed ten billion people within a few decades? Do we have a decent vision of prosperity for such a world? Is this vision credible in the face of the available evidence about ecological limits? How do we go about turning vision into reality?” —Tim Jackson, Prosperity without Growth
My goal is to compose synopses of every chapter, section by section, of the 2nd edition of Tim Jackson’s book, Prosperity Without Growth. (Routledge, 2016-17). So far, I have synopsized the Prologue, and the opening section of Chapter 1 in a post titled, Tim Jackson: In a finite world, what can Prosperity (without growth) possibly mean?
Today’s post is a synopsis of the second section of Chapter 1, a section Jackson titles, “Prosperity as Growth” — which stands in sharp contrast to his book’s title: “Prosperity without Growth.”
Faced with ecological limits, do we have a decent vision of prosperity for a world population expected to exceed ten billion? asks Jackson. The conventional wisdom associates prosperity with higher incomes driven by economic growth.
Gross Domestic Product (GDP) is a measure of the economic value of goods and services exchanged on the market, the primary metric economists use to calculate economic growth. Per capita GDP is the GDP divided by the population of a country, which facilitates a performance comparison. GDP per capita will lead to rising income only if the economy grows faster than the population does.
Equating prosperity with rising incomes through continued economic growth explains why growth drives governments’ policy goals. But does GDP per capita truly reflect “real prosperity”?
For poor regions of the world, there is no question that economic growth is a path towards prosperity. But what of richer nations? Can a case be made to halt the relentless pursuit of growth in affluent nations? Is there not some other path towards a more sustainable, more equitable form of prosperity for all?
GDP is so ingrained in economists’ DNA that it is now axiomatic that “there is no alternative” to achieving prosperity, other than by means of economic growth – “Prosperity as Growth”.
Relentless pursuit of GDP growth is a given in rich countries. The circular logic goes something like this – Per capita GDP growth usually translates into higher incomes, which means more spending on goods and services, which means GDP growth. We spend more because we’re told the things we buy will improve our lives, increase our prosperity, and make us happier.
The premise is perverse – prosperity is not synonymous with income or wealth. And equating prosperity with income growth is a corruption of the original meaning of prosperity — of “things going well.”
Consider a primary argument against growth as a path to prosperity — it contributes to gross inequality in the distribution of incomes and wealth. And these disparities are worsening. Some critics suggest that inequality was a cause of the 2008 global financial crisis.
Moreover, notes Jackson, beyond a certain point, “the continued pursuit of economic growth doesn’t appear to advance and may even impede human happiness.” The author cites Ecuador’s concept of buen vivir – “good life” – as a model of living based on a “the communion of humans and nature.”
But the most important challenge to continued economic growth is the finite ecological and resource limits of Earth.
Economists, of course, reject this logic. Some reject the notion of any limits. “Their rejection is not entirely mad. But as we shall see it is fundamentally flawed,” says Jackson.
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