Citizen Action Monitor

Will the emergence of a post-growth economy mean the end of capitalism as we have known it?

Jackson calls for a focus on growing the “economy of tomorrow”, don’t waste time on “irresolvable turf wars.”

No 2151 Posted by fw, January 26, 2018

To access all other synopses from Prosperity without Growth, click on the Tab titled “Prosperity without Growth” — Links to All Posts in the top left margin of the Home page.

In Section 4, Chapter 11, Tim Jackson alleged that decades of a growth-driven economy have unjustly oppressed human flourishing, asserting that if we want to create a prosperity without growth, we must envision a fundamentally different kind of economy. He then proceeded to outline, in broad-brush strokes, the main features of an economy built for prosperity for all.

In his opening sentence to Section 5, he questions whether the development of an economy built for prosperity for all will mean the end of capitalism as we have known it. For those who champion an unending growth-based capitalist economy, Jackson anticipates that his call for a post-growth economy will be considered heresy.

He devotes Section 5 to a discussion of how the inevitable emergence of a post-growth economy might transform capitalism as we have experienced it in recent decades.

Tim Jackson is a British ecological economist and professor of sustainable development at the University of Surrey.

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The end of capitalism?, a synopsis, from Chapter 11, “A Lasting Prosperity” of Tim Jackson’s book, Prosperity without Growth, Routledge, 2nd edition, 2016-17

In Section 4, Chapter 11, Tim Jackson alleged that decades of a growth-driven economy have unjustly oppressed human flourishing, asserting that if we want to create a prosperity without growth, we must envision a fundamentally different kind of economy. He then proceeded to outline, in broad-brush strokes, the main features of an economy built for prosperity for all.

In his opening sentence to Section 5, he questions whether the development of an economy built for prosperity for all will mean the end of capitalism as we have known it. For those who champion an unending growth-based capitalist economy, Jackson anticipates that his call for a post-growth economy will be considered heresy.

He clarifies his position somewhat by identifying the two kinds of capitalism he has in mind:

“The fundamental changes to the economy that I have advocated in this book are totally incompatible with the ‘casino capitalism’ or the ‘consumer capitalism’ that has characterized the richest economies in recent decades. But this is not the same thing as saying that we have arrived at the end of capitalism entirely.”

To make any kind of progress in a debate about the role of capitalism in a post-growth economy, Jackson first contends that “much depends on how, precisely, capitalism is defined.” Having said this, he then appears to be ambivalent about “the act of definition,” which “is itself so distorted by the inherently politicized nature of the debate as to be virtually impossible.

However, regardless of how problematic “the act of definition” may be, Jackson concludes that absent a definition, further debate would be an exercise in futility, so, “we have to settle on a usable definition of the term.

He starts with William Baumol’s ‘definition” (which Jackson calls an ‘assumption’) that “capitalistic economies are those where ownership and control of the means of production lies in private hands, rather than with the state.

However, Jackson foresees that a “more sustainable” “economy of tomorrow,” will attract “less productive investments” that will be “less attractive to private capital.” Consequently, “the role of the progressive State in protecting these assets is going to be vital.

Some State ownership is not going to mean the end of capitalism. As Jackson notes, “capitalistic economies often have always had some element of public ownership and control in the means of production.” And the range of possibilities beyond pure state and pure private ownership is surprisingly wide.

For example, Jackson cites the recent growth of employee ownership of both small and large enterprises, including the takeover of failed, privately owned enterprises.

Clearly, a more flexible definition of capitalism, allowing for a wider range of enterprise ownership arrangements, would be one way to retain the concept of capitalism in a post-growth world.

Perhaps, suggests Jackson, there are “more trenchant reasons to abandon the concept” entirely. Marxists would heartily agree.

Even so, reasons Jackson, “some other form of growth imperative inherent in capitalism” cannot be ruled out, including, for example, “the pursuit of increased labour productivity by the owners of capital.” However, he rules out that eventuality in a Cinderella economy which resists labour productivity growth.

One way or another,” argues Jackson, “the economy of tomorrow calls on us to revisit and reframe the concepts of productivity, profitability, asset ownership and control over the distribution of surpluses. It demands a revitalization of social investment. It requires us to redress income and wealth inequality. It calls for a renegotiation of the role of the progressive State.

He calls on us to get on with the business of “reforming economic structures and rebuilding social institutions without wasting time on irresolvable turf wars.”

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