New Internationalist

Oops, no brakes!

Issue 434

When the economy falters, people suffer; when the economy booms the earth suffers. How can we escape from this dilemma? Rowenna Davis asked Oxfam policy analyst Duncan Green and zero growth advocate Tim Jackson for their solutions.

Duncan Green calls it the bicycle problem. If you don’t keep pedalling, you risk collapse. The same is true of the economy – without growth, the system becomes unstable. Capital is reluctant to invest in alternatives, so job creation falls flat. But when we look up, we realize that our economic bicycle seems to be heading towards a cliff. Without a sharp pull on the brakes, environmental catastrophe looms.

Zero growth proponent Tim Jackson from Surrey University sums up this dilemma brilliantly in his book, Prosperity without Growth, where he argues that while de-growth will be unstable, growth is simply unsustainable. Green, head of research for Oxfam, is sceptical of Jackson’s zero growth solution, but agrees that we’re at a crossroads.

The two men have come together to discuss their differences in a quiet green garden in the heart of Surrey, southeast England. Jackson is a small, neatly dressed man with trimmed silver hair and dark glasses. Green arrives with his bicycle helmet under one arm. He’s got bright blue eyes and uses passionate hand gestures as he talks.

From the start, there’s plenty of overlap. Both agree that 150 years of economic growth and material progress has vastly improved human welfare, but that the benefits of extra income get smaller as citizens become richer. And both concur that hyper-consumerism makes us neurotically competitive and obsessively materialistic. In theory, both agree that the ‘ideal world’ would see the poorest countries continue to grow (although they disagree on how many countries that would include) whilst growth in richer countries would be capped. The poor would escape poverty, the rich would reclaim control of their lives and the planet would be saved.

In practice, though, Green has his doubts: ‘The ecologist in me says we need a cap, but the economist and the political scientist in me says, “How the hell are we going to do that?” Technology might be a better way forward. It would take a massive amount of investment to achieve sustainable growth – we’d need something like the Manhattan Project (the World War Two effort by the US and allies to develop nuclear weapons to defeat Nazi Germany) – but it may be easier than limiting growth.’

For Jackson, relying on technology is a non-starter. To understand why, you have to look at carbon intensity – the amount of carbon it takes to produce a dollar of output. If everyone were to aspire to European income levels by 2050, Jackson says that carbon intensities would have to fall 16 times faster than they have done since 1990. In 40 years, in a world of nine billion people, we’d need six grammes of carbon to produce a dollar of output – a carbon intensity rate 130 times lower than today. To continue the metaphor, it would be like expecting the bicycle to develop wings and fly over the precipice.

‘We don’t have a workable model of a decent future,’ Jackson laments. ‘It seems irresponsible not to ask these big questions just because we don’t know the answers. We’re driving towards the edge of a cliff – failing to acknowledge that is just denial.’

Our economic system will not adapt on its own, he argues, because of the bicycle problem – growth is hard-wired into the system: ‘If the economy doesn’t grow, there is a downward pressure on employment. People lose their jobs, output falls and spending is curtailed. A spiral of recession looms. Growth is necessary just to prevent collapse.’

Which leads to the crunch question – if our economic model really is headed towards a cliff and technology can’t help, what on earth can we replace it with? What would a ‘zero growth economy’ look like? And how could it function?

Jackson argues that the approach we need is staring us in the face – albeit on a micro level. Take the UK’s carbon targets. However inadequate, we now have a clear set of CO2 targets for 2050, with a set of interim goals in place telling us how to get there. Trading is freely permitted within these defined limits, but there are penalties for those who go beyond them. What we need, argues Jackson, is a radical extension of that model:

‘The assumption has been that CO2 targets are outside the workings of the whole economy,’ he says. ‘We need to bring carbon targets into the economic structure itself. In effect, we need to apply limits to GDP growth as a whole – not just CO2.’

A zero growth model would also mean redefining the way investment works. Jackson wants to see a full system of carbon accounting that would require every firm to disclose their carbon emissions. The rate of these emissions would then be linked to the return on the investment through state-enforced taxation. In other words: you pollute, you pay. Higher emitters would have their profits shaved; the worst offenders would be shut down – even if they were hugely profitable.

To put it crudely, it was the demand for Levi’s that brought down the Soviet Union

It’s hard to imagine how this model might function without massive state intervention. Green worries about the implications for political freedom and democracy. ‘What sort of a political system would properly enforce this kind of regime? What happens if you go over the resource limit – do you get a letter in the post, or a prison sentence? It sounds like a war economy.’

Jackson admits as much but believes it’s justified by circumstances. ‘There are elements of a war economy, to the extent that the model identifies national limits and uses fiscal and industrial policies to achieve them,’ he says. ‘Obviously, implementing these policies is easier when there is an explicit identifiable threat, but the ecological threat we are facing is just as dangerous – it’s just less tangible.’

Green is not convinced. ‘There is a level of consumer demand that is not artificially created – it’s intrinsic. To put it crudely, it was the demand for Levi’s that brought down the Soviet Union. I’m also worried that enforcing this system takes you down the route of authoritarianism, with a denial of agency and choice.’

But Jackson says the economic transformation he advocates isn’t just dictated from the top down. He also wants to see huge changes at the local level, with communities taking back greater control over their economies. He is inspired by community land trusts, co-operatives and local currencies – models where profitability and ownership work differently, and capital isn’t drained away from local people. How this balance of power will play out against a stronger central government remains unanswered.

Green also worries about the international implications. What economy counts as ‘poor enough’ to be allowed to continue to grow? ‘This model says to China that it will have to cap its income well below the per capita incomes of developed countries. In what world are they going to agree to that? It would be seen as a form of neo-colonialism.’

And what about unemployment? Jackson argues that we’ll need work-sharing schemes whilst encouraging people to spend free time on community-based work. ‘Past slowdowns in economic activity have caused chaos, but we’ve never had planned de-growth – only accidental non-growth. What we need is a managed contraction of the material size of richer countries – we need a new politics as well as economics.’

Jackson doesn’t believe you can ask people to give up the benefits of growth without offering something back. In a zero growth world, he wants to see new and alternative opportunities for ‘human flourishing’.

‘Investing in public space is an idea I like. Our public spaces have become commoditized and second class. I want to see governments at different levels, and community interest groups, build and take control of these spaces – communal agriculture, public gardens. What I’m advocating is a simpler world, but it’s also a richer one.’

In his view the state will be free to play a bigger role in promoting such initiatives. Governments now, he claims, are so intent on pursuing growth that they have no time for anything else. They are too busy liberalizing trade and deregulating the economy. But in a world where that obsession was unnecessary, Tim Jackson believes the state could focus on more innovative ways to work for the greater good.

Duncan Green remains sceptical.

‘I’m now convinced it’s even harder to pursue zero growth. But optimism is an act of will here. You can’t just give up hope – the current system isn’t working for the poorest people of today, let alone the nine billion of the future. It’s much easier to oppose an argument than to put one forward. Tim is much braver than I am – I hope he’s right.’

For Tim Jackson’s book Prosperity Without Growth and other resources, visit www.earthscan.co.uk/pwg. For information about Duncan Green’s book From Poverty to Power and his blog, visit: www.oxfamblogs.org/fp2p/

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