“Mother Nature and Father Greed have hit the wall at once” – Tom Friedman
Recovery from our deep economic and financial crisis is an opportunity to go beyond the dilemma of an economic systems that ignores earth’s natural limits to growth. However, neither our leadership nor the mainstream media give us a coherent and feasible vision of what the economy will be like when we’ve “recovered”. They betray no understanding that the global economic and financial crisis is closely linked to the crisis of ecological destruction. The basic failure of most economists to account for the value and the limits of the natural world is intertwined with several decades of financial bubbles based on fictional values and disconnected from the economy of real goods and services. Few are willing to consider that limiting population to the actual capacity of the earth is an acceptable theme for discussion.
Many policy makers and commentators appear to believe we will recover to a more subdued version of the last decades, with continuous growth of the population of consumers. This is both morally undesirable and physically impossible. Our task is to design a recovery into a new global, national, and regional economy, a sustainable economy.
This web page gathers quotes from and links to articles and reports analyzing the common roots of the natural and financial/economic crisis and asking “to what economy do we recover?” For decades, some economists, such as Herman Daly, have been describing a truly sustainable economy, capable of operating within the earth’s natural limits. At last, a mainstream columnist, the New York Times’ Tom Friedman, is reflecting this understanding of natural limits and an agency of the United Kingdom government is making the case strongly for fundamental redesign.
The Service Economy and the Restoration Economy are important components of a fully sustainable economy. We discuss them on these pages: Service Economy Restoration Economy
Tim Jackson, Prosperity without Growth? The transition to a sustainable economy.
This paper from the UK Sustainable Development Commission is the most comprehensive response to the question, “recovery to what?” that we have found so far. Based upon several years of exploration by this Commission, Jackson’s report is a detailed analysis of the current economic/financial crisis and a powerful argument for recovery as a transition to a sustainable economy beyond consumerism.
For a summary of the report on this site go to without growth.
For the full report:
Tim Jackson, Prosperity without Growth? The transition to a sustainable economy.
Written for discontinued Sustainable Development Commission, United Kingdom, http://www.sd-commission.org.uk/publications/downloads/prosperity_without_growth_report.pdf
Peter Victor is a noted ecological economist at the University of York, Toronto. His recent book “makes three primary arguments on why rich countries should turn away from economic growth as the primary policy objective and pursue more specific objectives that enhance well-being. The author contends that continued economic growth worldwide is unrealistic due to environmental and resource constraints. If rich countries continue to push growth, poorer countries where the benefits are more evident, will lag. Rising incomes increase happiness and well-being only up to a level that has since been surpassed in rich countries. Moreover, economic growth has not brought full employment, eliminated poverty or reduced the burden of the economy on the environment.”
Peter Victor, 2008, Managing without Growth, slower by design, not disaster, Edward Elgar, Publishers, Northampton, MA, http://www.managingwithoutgrowth.com
This web site has links to Dr. Victor’s speeches, papers, references, and other related web sites.
Herman Daly is the economist who has contributed to building a holistic vision of how we can manage a sustainable economy. For years he worked at a small Louisiana university, shunned by “real economists”. The World Bank brought him on board for a few years in the 90s. However, he says,“The idea that economic growth should be constrained by the environment was too much for the World Bank in 1992, and still is today.” Now Daly is at the University of Maryland, not in the economics department but in philosophy.
Daly is part of a network of economists such as Faye Duchin, Robert Costanza, Richard B. Norgaard and many others who created the field of ecological economics: International Society of Ecological economicshttp://www.ecoeco.org/
Herman Daly, Special report: Economics blind spot is a disaster for the planet, New Scientist, October 15, 2008,
. . . economists have not grasped a simple fact that to scientists is obvious: the size of the Earth as a whole is fixed. Neither the surface nor the mass of the planet is growing or shrinking. The same is true for energy budgets: the amount absorbed by the Earth is equal to the amount it radiates. The overall size of the system – the amount of water, land, air, minerals and other resources present on the planet we live on – is fixed.
“The most important change on Earth in recent times has been the enormous growth of the economy, which has taken over an ever greater share of the planet’s resources. In my lifetime, world population has tripled, while the numbers of livestock, cars, houses and refrigerators have increased by vastly more. In fact, our economy is now reaching the point where it is outstripping Earth’s ability to sustain it. Resources are running out and waste sinks are becoming full. The remaining natural world can no longer support the existing economy, much less one that continues to expand.”
Herman Daly, The Crisis: Debt and Real Wealth, February 25, 2009, Bank Information Center
“Growth in US real wealth is restrained by increasing scarcity of natural resources, both at the source end (oil depletion), and the sink end (absorptive capacity of the atmosphere for CO2). Further, spatial displacement of old stuff to make room for new stuff is increasingly costly as the world becomes more full, and increasing inequality of distribution of income prevents most people from buying much of the new stuff—except on credit (more debt). Marginal costs of growth now likely exceed marginal benefits, so that real physical growth makes us poorer, not richer . . . To keep up the illusion that growth is making us richer we deferred costs by issuing financial assets almost without limit, conveniently forgetting that these so-called assets are, for society as a whole, debts to be paid back out of future real growth. That future real growth is very doubtful and consequently claims on it are devalued, regardless of liquidity.”
Herman Daly, Big Idea: A Steady-State Economy, Adbusters
“The closer the economy approaches the scale of the whole Earth, the more it will have to conform to the physical behavior mode of the Earth. That behavior mode is a steady state – a system that permits qualitative development but not aggregate quantitative growth. Growth is more of the same stuff; development is the same amount of better stuff (or at least different stuff). The remaining natural world is no longer able to provide the sources and sinks for the metabolic throughput necessary to sustain the existing oversized economy – much less a growing one. Economists have focused too much on the economy’s circulatory system and have neglected to study its digestive tract. Throughput growth means pushing more of the same food through an ever larger digestive tract; development means eating better food and digesting it more thoroughly. Clearly the economy must conform to the rules of a steady state – seek qualitative development, but stop aggregate quantitative growth.”
One of Herman Daly’s sources is Frederick Soddy, a chemist who became an economist in the 1920s and 30s.
Eric Zencey, Mr. Soddy’s Ecological Economy, New York Times, April 12, 2009 http://www.nytimes.com/2009/04/12/opinion/12zencey.html?_r=1&emc=eta1
“In four books written from 1921 to 1934, Soddy carried on a quixotic campaign for a radical restructuring of global monetary relationships. He was roundly dismissed as a crank.
“He offered a perspective on economics rooted in physics — the laws of thermodynamics, in particular. An economy is often likened to a machine, though few economists follow the parallel to its logical conclusion: like any machine the economy must draw energy from outside itself. The first and second laws of thermodynamics forbid perpetual motion, schemes in which machines create energy out of nothing or recycle it forever. Soddy criticized the prevailing belief of the economy as a perpetual motion machine, capable of generating infinite wealth — a criticism echoed by his intellectual heirs in the now emergent field of ecological economics.
Richard Smith, Beyond Growth or-beyond-capitalism
“Daly, Jackson and the rest are mistaken to assume that we can get a sustainable “steady state” economy or “de-grow” the economy “within a capitalist framework.” I contend first, that the idea of a steady-state or de-growing capitalism is based on spectacularly untenable assumptions, starting with the assumption that growth is optional rather than built into capitalism. I argue that irresistible and relentless pressures for growth are functions of the day-to-day requirements of capitalist reproduction in a competitive market, incumbent upon all but a few businesses, and that such pressures would prevail in any conceivable capitalism.
“Secondly, this paper takes issue with Daly’s thesis . . . that capitalist efficiency and resource allocation is the best humanity can come up with. I argue that this belief is incompatible with an ecological economy, and therefore it undermines Daly’s own environmental goals. I conclude that because capitalist growth cannot be stopped, or even slowed, and because market-driven growth is driving us toward collapse, ecological economists would do well to abandon this distraction and get on with the project of developing a compelling and plausible vision of a post-capitalist eco-socialist economy and to join with eco-socialists to help organize for such a resolution before it’s too late to bother trying.”
other papers by Richard Smith:
Capitalism and the Destruction of Life on Earth: Six Theses on Saving the Humans By Richard Smith, Truthout | Opinion
Imperatives for a New Economic Model That Saves the Humans: Truthout Interviews Featuring Richard Smith By Ted Asregadoo, Truthout | Video
Green Capitalism: The God That Failed By Richard Smith, Truthout | News Analysis
Truthout Interviews: Richard Smith on the Failure of Green Solutions to Solve Environmental Problems By Ted Asregadoo, Truthout | Video Interview
Thomas L. Friedman
Thomas Friedman, The Inflection Is Near?, New York Times, March 8, 2008
“Let’s today step out of the normal boundaries of analysis of our economic crisis and ask a radical question: What if the crisis of 2008 represents something much more fundamental than a deep recession? What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall — when Mother Nature and the market both said: ‘No more.”
“We have created a system for growth that depended on our building more and more stores to sell more and more stuff made in more and more factories in China, powered by more and more coal that would cause more and more climate change but earn China more and more dollars to buy more and more U.S. T-bills so America would have more and more money to build more and more stores and sell more and more stuff that would employ more and more Chinese.
“We can’t do this anymore.”
Thomas Friedman, The Price Is Not Right, New York Times, April 1, 2009,
“Just as A.I.G. sold insurance derivatives at prices that did not reflect the real costs and the real risks of massive defaults (for which we the taxpayers ended up paying the difference), oil companies, coal companies and electric utilities today are selling energy products at prices that do not reflect the real costs to the environment and real risks of disruptive climate change (so future taxpayers will end up paying the difference).
“Whenever products are mispriced and do not reflect the real costs and risks associated with their usage, people go to excess. And that is exactly what happened in the financial marketplace and in the energy/environmental marketplace during the credit bubble.”
Another Friedman column describes “why we need a climate bailout along with our economic bailout” and considers the indicators of Mother Nature’s Dow.
Thomas Friedman, Mother Nature’s Dow, York Times, March 29, 2009
Chip Ward, Let’s Not Recover
Chip Ward, Let’s Not Recover, Ecological Ignorance and Economic Collapse, Tomgram April 20, 2009http://www.tomdispatch.com/post/175061/chip_ward_let_s_not_recover
Ward first describes how an adaptive cycle (either economic or ecological) begins with rapid growth, followed by a phase of consolidation. He continues:
“The third phase in the typical adaptive cycle is collapse. If you want to know what that’s like, turn on the TV, look out your window, or knock on your neighbor’s door, assuming that you still have a window or your neighbor still has a door. Since everything’s connected, when an overgrown system spirals out of control, collapse tends to feel like an avalanche rather than erosion.
“It may be hard to notice during the turmoil and confusion, but enormous amounts of energy are released in the collapse phase of an adaptive cycle and that leads to the final phase: regeneration. After seeds are cracked open by a forest fire, seedlings bloom in the nutrient-rich ashes of the former forest. They soak up newly available sunlight where the forest canopy has been opened. Then, as those open spaces start to fill, the growth phase begins anew. Hopefully, in our world, those empty auto-making factories will soon house a blooming business in wind turbines and mass transit.
“It is important, however, to recognize that sometimes the collapse phase leads to renewal and sometimes to an entirely different and unwanted regime. Fire, for example, can renew a forest by clearing debris, opening niche space, and resetting the successional clock, or, if combined with a prolonged drought, it can set the stage for desertification.”
Chip Ward’s essay is from TomGram, a blog at The Nation, edited by Tom Englehardt. He draws upon a group of excellent commentators from a liberal perspective for insight into the economic crisis, the political economy, climate change, oil, and US military operations.
http://www.tomdispatch.comTom Horton, the Myth of Endless Growth
Tom Horton, Growing! Growing! Gone! The Chesapeake Bay and the Myth of Endless Growth, Abell Foundation, August 2008
Full text: http://www.abell.org/pubsitems/env_Growing_808.pdf
It is summarized in the Abell Foundation Newsletter: http://www.abell.org/pubsitems/arn808.pdf
Tom Horton’s Growing! Growing! Gone! is a major essay on natural carrying capacity focused on the largest estuary in the US. He calls for the regional economies to operate within natural limits: practice qualitative development, not quantitative growth. He begins by noting that after 30 years of effort to improve the environmental conditions of the Chesapeake Bay, most indicators are worse than at the beginning. Then says,
“The blind spot is our addiction to limitless economic growth, based on encouraging an ever-expanding population of human consumers to support it. This is our mantra: Growth is good, vital to our wellbeing, or at least inevitable and must be “accommodated.” So unchallenged is this premise that day to day, we analyze it little more than we do the gravitational force that holds us to the planet. But listen to what we are, in effect, saying: With better management and technology, the human population and economy can grow forever while assuring a sustainable and high level of environmental quality, including room for the rest of nature . . .
“That is what we continue to assume, with the connivance of elected and environmental leaders, after 25 years of failing to do it. Growth is good. Growth is necessary. Growth will come. Growth can be accommodated. These are the greatest, most uncritically accepted and fatally flawed assumptions made by those charged with protecting the natural resources of the Chesapeake Bay.
“By an end to growth we do not mean an end to capitalism, stock markets, free trade, innovation, the profit motive or greed and corruption. Economic development would continue to underpin our prosperity—a shift to building more comfortable, affordable and energy-effi- cient homes versus more homes; to producing tastier, more nutritious burgers with less impact on the environment rather than more and bigger ones; to rebuilding our cities and towns and mass transit versus expanding the suburbs. The focus would shift to better serving those already here versus making endless accommodations for all who might be induced to come.”
Related web sites:
The Center for Advancement of the Steady State Economy (CASSE) is a rich source of resources for research and action toward a steady state economy. Particularly valuable are the educational materials to inform friends, family, and public officials. http://www.steadystate.org
The CASSE resources page includes links to several dozen other organizations working on the steady state version of a sustainable economy: http://www.steadystate.org/CASSEResources.html
The Economics of Ecosystems and Biodiversity (TEEB) study has produced reports for policy makers, business, and households estimating the economic value of natural capital usually considered external to the human economy. This a major international initiative to draw attention to the global economic benefits of biodiversity, to highlight the growing costs of biodiversity loss and ecosystem degradation, and to draw together expertise from the fields of science, economics and policy to enable practical actions moving forward. http://www.teebweb.orgs
“In our documentary, GrowthBusters: Hooked on Growth, our examination of population, consumption and urban growth ultimately leads us to the root cause of these challenges: an insistence on perpetual economic growth.”
GrowthBusters site has sections on a no growth economy, overpopulation, overconsumption, and action.
Global Footprint Network
“An essential step in creating a one-planet future is measuring human impact on the Earth so we can make more informed choices. That is why our work aims to accelerate the use of the Ecological Footprint — a resource accounting tool that measures how much nature we have, how much we use, and who uses what.
“The Ecological Footprint is a data-driven metric that tells us how close we are to the goal of sustainable living. Footprint accounts work like bank statements, documenting whether we are living within our ecological budget or consuming nature’s resources faster than the planet can renew them.”
The International Society for Ecological Economics
For several decades ecological economists have analyzed the failures of mainstream economics that led to the current crisis. They have developed and tested models for a prosperous steady state economy that operates within earth’s natural carrying capacity. They argue that the purpose of any economy is to deliver sustainable quality of life, not more and more stuff. Their home page is http://www.ecoeco.org/
The Community Solution
“The Community Solutions program, started in 2003, is a national resource for knowledge and practices on low-energy living and self-reliant communities. We educate about the coming global oil production peak and climate change, and design solutions to the current unsustainable, fossil-fuel based, overly centralized way of living.” This organization focuses on food, housing, and transportation. http://www.communitysolution.org/index.html
The Story of Stuff is Annie Leonard’s 20 minute educational video on the costs of the rampant Consumer Society that is getting lots of play in classrooms: http://storyofstuff.com/
The New American Dream provides a vision and practical tips for responsible consumption and explores quality of life beyond consumption: http://www.newdream.org/consumption/beyond.php