Prosperity without growth? is this being considered?

Factual Questions
1

I was intrigued to find this publication from the UK’s sustainable development commission.

http://www.sd-commission.org.uk/pages/redefining-prosperity.html

I want to keep this out of great debates about whether infinite economic growth is desirable or not. I’m interested in knowing instead if this idea is making any headway into actual economic policy decisions? Eg Is this idea actually being debated by mainstream economic policy makers or is the assumption that infinite economic growth is necessary and desirable still an article of faith in western economics?

2

The question isn’t whether or not “infinite growth” is mainstream thinking among economists as large but really whether it’s the party line with economists that work for the government as that sub group has a large effort on policy making. I realize you sort of touched on it, but wanted to re-iterate it because that really is the core of the question.

3

I think the basic point is very sound and one that is becoming well recognized in economic circles: that human wealth can be far away from the GDP numbers dependent on other factors. For instance, if there are $10 toasters with a five year life-span and $15 toasters with a ten year life-span, the standard of living for a society that buys $15 toasters will be higher than a society which buys $10 toasters even though the former society would have a lower nominal GDP. There are now tons of economic indexes like “development indexes,” that try to put focus on this type of economic wealth. Usually economic growth numbers for the USA actually look better with this type of adjustment over the past decades. For instance, the inflation adjusted money spent on telecom is ow much lower than it was in the 1970’s, but cell-phones obviously kick the ass of a landline from the 1970’s. The telecom GDP is lower (CPI adjusted) but our telecom wealth is much higher. Even poor people today have cell-phones which the rich of yesterday would have lusted at.

So, this isn’t a new idea in economic circles, but these numbers are also harder to measure and take more time to develop than straight GDP numbers (you’ve got to do research into how long the average toaster survives in your new environment), so if you’re the Fed chairman and you’ve got to deliver a report on the state of the economy, you still have to look at GDP growth for guidance and you report things on that basis.

4

Well I found in my reading that there was an actual debate on this point in the late 70’s when Herman Daly proposed “steady state macroeconomics” that there could “Uneconomic growth”, eg growth that causes a decline in the quality of life.

But the “washington consensus” based on neoclassical economics won out and seems to have dominated economic thinking to this day.

Is this being challenged again?

5

An alternative perspective has been circulated.

http://discussions.pbs.org/viewtopic.pbs?t=28529

Considering that double-entry accounting is 700 years old shouldn’t it be easy for everybody with today’s computers?

http://www.bsu.edu/news/article/0,1370,-1019-11714,00.html

But our economic growth is built on lots of people being dumb not smart. It would mean a cultural economic change. When have you heard an economist talk about Demand Side Depreciation? Why can’t the peons just share information and implement a consumer revolt economic policy?

Cost of Living, 1952

Subversive, 1962

psik

6

some interesting links psikey, but I’d really like to hear about any examples of mainstream economic think tanks proposing alternative models that move beyond trying to achieve infinite growth.

The UK sustainable development commission is an official think-tank of the UK government, so I was very surprised to see them actually seriously questioning the mantra of economic growth above all else.

Any other examples from official goverment bodies?

I lknow about Bhutan’s “gross domestic happiness” instead of GDP

Any others?

edit: heres some more examples of countries using a “genuine progress indicator” that includes externalities such as crime and environmental degradation:

7

Nothing is happening officially. Right now these proposals are wistful utopianism. The entire world capitalist culture would have to change for them to be taken as national policy. While the current economic recession, the talk of peak oil, and a growing conservation and ecological understanding in the public mind make these policies serious ones for talk, the vast majority of individual and national thought assumes that the bad times will end and everybody will be rich again. These attitudes are so ingrained in American society and have been exported to and hammered home as the only solution to poverty in developing countries that a shift to a different model would require enormous changes in every aspect of every bit of thinking. Tiny shifts in this direction already exist and have existed for years. At the national and international levels, though, greening is about the closest analog that can be found. And greening is more of a word used in publicity releases than in reality.

Whether that and all the other aspects of limited or sustainable growth might be a good thing or not can be debated in GD. But the GQ answer to the OP is that current mainstream economic thinking is that “the assumption that infinite economic growth is necessary and desirable [is] still an article of faith in western economics”.

I can’t stop thinking about this. I hope this is a reasoned explanation of why the policy is not officially endorsed rather than coming out for or against the policy itself.

Why shouldn’t it - continued growth (infinite growth is a pejorative that biases the discussion before it begins) - be an article of faith? It’s the core principle of capitalism, it’s always worked before, and it’s given the world the highest standard of living in human history, well beyond anything imaginable even 50 years ago. Why would anyone give that up? For the sake of unproven projections into an unknown future? You may be too young to remember that 30 or 40 years ago the idea that the world of 2010 would be starving because of overpopulation and lack of resources was taken very seriously in some circles. You can argue that it has come to pass in certain ways, but the overall growth rate of GDP worldwide makes those losses globally minimal.

The logic of extrapolation is a deadly exercise in linear thinking and failing to anticipate the unanticipatable. The need for sustainable development may seem logically impeccable. Or it could be utterly wrong. Interestingly, there is a difference between this and global climate change. Climate change appears to have solid science on the side of future effects. Interrupting the constant growth curve of capitalism has nothing but past trends and imagined future speculation. The speculation seems to be based on science, but in fact it is based on social and cultural assumptions about what paths humans will take. The climate will do what climate does. Humans never do. That’s what killed the overpopulation scares. People changed their lifestyles. When extrapolating, futurologists always fail to distinguish those two states.

Some preparation is always necessary for the future. Yet the future will always surprise us. Nobody has yet been able to leap this gap. That’s why conservatism - in the old fashioned sense of doing what has always worked - dominates every political and social measure. (You see it now in the health care debate.) Incremental changes can be made and today’s world is a testament to those. (When do you see people smoking?) Telling people to stop a behavior that will kill them takes decades to see results. Telling people to stop a behavior that makes them feel better in every way can’t be a policy.

Nobody can define what sustainable development on a global scale means for any group or nation or economic bloc. Nobody knows what steps would mean sustainability and which would mean privation. Nobody can explain how developing countries should treat the issue while straining to achieve even a small measure of equality.

Economics is not up to the task because the issue is a social and cultural and very human one. I study the way the future was perceived in past decades. The visions expressed, by everyone at every level on every subject, were always wrong. This makes me professionally dubious about all extrapolations, plans, proposals, and doomsaying.

It cannot be surprising, therefore, that the subject is making no headway into mainsteam thinking. Everyone has been burned too badly before. Whether this particular policy is correct or not is debatable, but irrelevant. The policy that is taken seriously in mainstream thought will be developed after the crisis, and will not avert it.

8

I can’t agree with that. It’s just stating more plainly the facts. Continued growth, must by definition be infinite. If the goal is to “reach some level then stop” then it’s not infinite, but I’ve never heard that ever mentioned in economic policy goals.

Which means that if you’re in favor of continued economic growth, you must logically believe in “cornocupianism”, eg that it is possible for us to always manage to increase production by making infinitely more efficient use of limited resources… otherwise the growth has to stop due to physical limits of the environment.

I don’t accept your assumption that continuous economic growth makes people feel better in every way, see “uneconomic growth” linked above.

9

The reason infinite growth biases the issue is that any statement whatsoever about the far future is meaningless. We can’t talk about will happen even 100 years from now. The earth as a livable planet has between 1 and 5 billion years, yet that is zero when compared to infinite. The rate of growth is what is important. A 1% growth rate produces a different world in 50 years than a 7% growth rate. Yet neither is infinite growth or anywhere near it. Infinite growth is a sound bite rather than an argument. No policy argument can state that behavior should be predicated on a totally imaginary economic future. No one understands the current world economic situation.

You may not agree that continuous growth is better, but my point was that in the real social and political world of today, virtually nobody else agrees. It is that social fact that dominates the conversation. Tim Jackson, in your link, notes how few people buy into this and says, realistically, that he is engaged in a multi-decade hope.

I think you’ve already accepted this as fact and want signs that others are doing so. There are no such signs. Wishing does not make it so.

Whether the idea is good or hooey is a separate debate.

10

You seem to be arguuing that this is not even a valid topic for debate, and you’re missing the point. The point is that setting national economic goals based on prosperity, but not growth, would lead to very different national macroeconomic decisions taken RIGHT now, not infinitely in the future.

The reason to do this is not fear of what might happen infinitely in the future, it’s that people might be better off in wellbeing and quality of life, RIGHT NOW, than in an economy that is solely based on achieving continuuous economic growth. At the very least thats a discussion that needs to be allowed to happen.

So back to the question, I’d like to hear about any other examples, where this is actually being debated.

11

My point continues to be that this is worthy of being debated, but not in GQ. Start a thread in GD if you want a debate.