In the second of two posts, Political Climate takes a critical look at an example of the new anti-growth literature, Growth Isn’t Possible: Why we need a new economic direction by Andrew Simms and Victoria Johnson at the New Economics Foundation.
Growth isn’t possible (GiP) does raise profoundly serious issues about the limits to economic growth and the need for urgent decarbonisation of energy systems. But part 1 argued that NEF’s approach is seriously weakened by the fudging of energy consumption and carbon emissions in the report, its thin understanding economic growth and its dismissal of innovation.
A third weakness about GiP is its narrative about economists. The authors seem almost compelled, like Tourette’s Syndrome sufferers, to make constant jibes about the profession, beginning with the pronouncement that: “for decades, it has been a heresy punishable by career suicide for economists to question orthodox growth”. This kind of silly hyperbole could be ignored if GiP had a consistent and interesting critique, but what makes it almost surreal is that, having slagged off economics on one page, the authors go on, literally on the next, to cite various economists approvingly and apparently without irony, including Kuznets, Jevons and the work of Steven Sorrell from Sussex University on the rebound effect.
What is ironic is that Andrew Simms, one of GiP’s co-authors, has also appeared recently on a list of economists who wrote a letter to the Observer arguing against premature cuts in public spending because these would prevent recovery in – you guessed it – Britain’s economic growth…
But the ultimate irony is that, in reality, many economists at the very core of the discipline also worry a lot about the sustainability of growth and about ecological limits. Such a worry lies at the heart of the Stern Review, written by an economist who has had both successful academic and public service careers. Martin Weitzman of Harvard and the other “fat tailers” argue that we should be thinking seriously about the not insignificant possibility of a major climate catastrophe. Dieter Helm at Oxford thinks the situation is “very grim” and believes we need a sharp downward adjustment in consumption before growth can resume. Partha Dasgupta at Cambridge University has given over much of his professional life to analysing sustainability and critiquing the use of GDP as a measure of economic success. None of this seems of much interest to the authors of GiP, but that is a huge mistake, since these are rigorous thinkers who produce important and useful tools for bringing economics and ecology together.
The final weakness in GiP is in some ways the biggest – it’s the politics, stupid. The NEF authors say another of their reports – The Great Transition – demonstrates that even with declining GDP, it is possible to see “rises in social and environmental value”. The problem is that, outside of the ranks of committed greens, no-one really believes this, and there is no even vaguely convincing intellectual and political case made here.
There is no serious attempt to engage with the political difficulties that changing carbon intensive consumerism presents. There is no credible vision of an alternative, no analysis of the groups that would be for and against such an alternative, and no practical programme for how to find allies, build support and neutralise opponents. There is also no recognition that economic growth has produced the middle classes who provide the constituency for environmentalism.
The reason why these absences matter so much is that the alternative economic model offered in GiP is so radically different from the status quo. In the final section on the alternative to growth, the NEF authors draw heavily on Herman Daly’s notion of a “steady state economy”, but it is hard to see how a capitalist economy can be in a steady state. Capitalist economies cycle between growth and recession, sometimes very deep recessions. Financial and other asset markets are prone to bubbles and crashes, as we have recently seen. In current real-world politics, no growth means pain – rising unemployment, people losing their homes, businesses closing, cuts in public services. It’s not surprising that politicians aren’t queuing up to explore a no-growth platform.
The implication is that the serene steady state economy is a radical departure from capitalism. In a sense it would have to be, because the productivity growth at the heart of capitalism would otherwise mean inexorably rising unemployment. Indeed at points it seems as if GiP is endorsing a reversal of the Industrial Revolution, approvingly quoting Daly’s description of a steady state economy leading to “the substitution of labor for energy in production processes and consumption patterns, thus reversing the historical trend of replacing labour with machines…”
This seems so much of a political dead end, one cannot help but think that GiP is not really about a taking the opportunity of the climate crisis to produce a coherent reformulation of the environmentalist critique of growth to win over a wider audience, but is rather preaching to the converted, safely inside its green comfort zone.
The last sentence of GiP reads: “Unending global economic growth, it would seem therefore is not possible, but also neither desirable nor necessary. If you have any doubts, ask a hamster”.
It’s awfully tempting to end here by observing that one might get more sense out of a hamster. But perhaps a more useful last thought is that GiP should stand as a warning to the environmental movement against indulging in old pleasures. Our current ecological challenge is a lot more profound than those of previous eras, but instead of rising to that challenge, this particular updating of the green anti-growth case slides back into the comfort of an escapist anti-modernism.
It is beyond question that we need a new economic direction, but this ain’t it.