No 2062 Posted by fw, September 28, 2017
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To recap —
In Chapter 4, titled “The Dilemma of Growth”, Tim Jackson tackles a pivotal question: “Could it be that, without growth, our ability to flourish diminishes entirely?”
In Section 1 of Chapter 4, Jackson declares in his brief introduction that any one of three related propositions, discussed at length in Chapter 3, could place us on the “horns of an extremely uncomfortable dilemma”:
The first is that material opulence – though not synonymous with prosperity – is a necessary condition for flourishing.
The second is that economic growth is closely correlated with certain basic entitlements – health or education, perhaps – that are in themselves essential for prosperity.
The third is that growth is functional in maintaining economic and social stability.
Jackson frames the dilemma these propositions could create this way: “on the one hand, continued growth looks ecologically unsustainable”; “on the other hand, it appears essential for lasting prosperity”.
In Section 2, Jackson addressed the first of the three related propositions: that material opulence is a necessary condition for flourishing. His analysis is brilliant, touching on explanations from neuroscience, brain circuity, consumer capitalism, and the influence of social and psychological meanings we attach to material things. Jumping to his conclusion, Jackson writes:
But as the author declared in Chapter 3, “The prevailing vision of prosperity as a continually expanding material paradise has come unravelled.” Contributing to the unravelling of this ruling-class vision of prosperity, Jackson includes: climate change, loss of biodiversity, resource scarcity, failing financial markets, and inequality.
Turning now to Section 3, titled “Income and basic entitlements”, Jackson examines the implications of the second of the three related propositions: that “certain basic entitlements – such as life expectancy, health and education – rely inherently on a rising GDP would cast a serious doubt on our ability to flourish without growth.”
In this section, Jackson reviews a number of studies to explore the possibility that certain basic entitlements – such as life expectancy, health, and education – rely essentially on rising income (measured as per capita GDP) Findings of a positive correlation between the two would strengthen the argument that human flourishing is a function of economic growth.
Jackson cautions: “correlations in themselves don’t prove or disprove a causal link.” But they provide a starting point in understanding the relationship between basic entitlements and incomes (measured as per capita GDP).
Here’s a summary of selected findings drawn from Jackson’s review of the evidence related to life expectancy, child mortality, education, and life expectancy in times of economic crisis
A study in London found that life expectancy in a poorer area is 17 years shorter than it is in a richer region. More to the point, “the economic growth of the previous decades had done nothing to narrow health inequalities within the UK. Some of them had even widened.”
Mapping per capita income data across more than 180 countries against selected reliable indicators of health reveals –
Life expectancies are less than 50 years in parts of Africa and more than 80 years in many developed nations. The advantage of being richer as a nation appears to show diminishing returns in terms of longer lives, beyond a certain income level.
Each doubling of income is associated with around 2.9 years of additional life expectancy. The biggest gains come far faster for the poorest nations.
High life expectancy is achieved at relatively low incomes. Life expectancy in Cuba, Costa Rica and Chile, for instance, is higher than life expectancy in the USA. Indeed, in Chile, which has an average per capita income of just $12,000 a year, life expectancy is higher than it is in Norway, which has an average per capita income seven times higher than its Latin American counterpart. These anomalies underline the fact that culture and social organization matter. There is no simple magic formula which translates high income into good health. Or low income into bad health. On the other hand, of course, persistent extreme poverty over long periods of time has a devastating effect on health.
There is a steep decline in child mortality as per capita income rises from less than $1,000 to around $15,000, and the near flat trend in mortality rates for incomes between $15,000 and $84,000 per capita. Striking is the speed with which the gains from growth diminish. Some rather poor countries achieve mortality rates that are as low or even lower than some very rich countries. The under-5 mortality rate in Armenia is lower than it is in the USA, even though Armenians enjoy an average income of barely £2,500 per capita; less than 5 per cent of the income enjoyed by Americans.
Regarding the relationship between income and education, it is possible to find low-income countries providing educational participation rates that are as high as the most developed nations. Estonia, for example, with an average income of just $15,000, scores higher on the index than Japan, Ireland or Norway, countries with income levels four and five times higher.
Mean years of schooling and income per capita, the same levels of access to good health or to education or even to happiness appear possible on much lower incomes that those associated with Western nations.
Life expectancy in times of economic crisis –
Following the breakup of the Soviet Union, the formal economy in Cuba more or less collapsed, partly because of the sudden removal of subsidized Soviet oil. GDP per capita fell by over 40 per cent in the space of a few years. Astonishingly, though, life expectancy in Cuba continued to improve at more or less the rate it had done prior to the collapse.
One study identified significant health improvements in Cuba in the aftermath of the collapse. Calorific intake was reduced by over a third, but obesity was halved and the percentage of physically active adults more than doubled. Between 1997 and 2002, ‘there were declines in deaths attributed to diabetes (51%), coronary heart disease (35%) [and] stroke (20%).
In Argentina, economic output was erratic to say the least over a quarter of century between 1980 and 2005, with two major and sustained economic contractions. But the gains in life expectancy over the same period were substantial and consistent.
In Japan, income growth has been more or less stagnant for two decades. But during the two ‘lost decades’ (between 1990 and 2010), life expectancy in Japan grew faster than it had done at any point during the previous three decades.
Health and happiness in times of economic crisis
In Iceland, both health and happiness improved in the wake of a banking crisis that hit the country even harder than most.
On the basis of the evidence, Jackson concludes: There’s an undeniable urgency to come to terms with some harsh realities. However, there’s no denying that —
Above a certain income level, the life benefits from economic growth swiftly diminish;
For those living below the poverty line, income growth delivers huge advantages; and
Some poorer countries are able to enjoy levels of human wellbeing on a par with the richest nations on earth with a fraction of the income.
All of these lessons are vital in our ability to understand the complex relationship between GDP growth and prosperity.