flourishing Dr John Barry jbarryqubacuk Background Imagining an economicsand life beyond orthodox growth questioning growth is deemed to be the act of lunatics idealists and revolutionaries ID: 782481
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Slide1
Arguing for post-growth economics in an era of austerity: equality, sustainability and human flourishing
Dr. John Barry
j.barry@qub.ac.uk
Slide2Background
Slide3Imagining an economics...and life... beyond orthodox growth
“
questioning growth is deemed to be the act of lunatics, idealists and revolutionaries
” (Jackson, 2009: 14).
Criticising economic growth is tantamount to a fundamental act of
betrayal
in modern societies, a public act of
disloyalty
to the modern political economic order.
....Almost as bad in terms of being a ‘disloyal’ citizen, as questioning Ireland plc’s corporate commitment to a low corporation tax regime
Slide4Slide5Why be critical of growth?
Sustainability reasons – climate change, energy, resources and pollution;
Equality reasons – economic growth manages and reproduces inequality it does not reduce it;
Human flourishing reasons – beyond a threshold, economic growth does not add to and can reduce human flourishing.
Slide63 criteria for assessing economic growth/policy
Low carbon/sustainability
– does an economic policy lower carbon and move us away from actually existing unsustainability?
Equality
– does an economic policy increase or decrease extreme inequalities?
Human flourishing
– does an economic policy increase or decrease human flourishing?
So…if economic growth can be low carbon, lower inequality and increase human flourishing it is to be welcomed
Slide7Types of economic growth
Pro-poor economic growth
Pro-egalitarian economic growth
Low carbon economic growth – ‘ecological
modernisation
’, ‘green growth’; ‘green capitalism’
Economic and ‘uneconomic’ growth – growth that does not add to reducing inequalities, reducing resource/energy intensity or increase opportunities for human flourishing
Slide8Slide9The new economics foundation ‘impossible hamster’
“From birth to puberty a hamster doubles its weight each week. If, then, instead of levelling-off in maturity as animals do, the hamster continued to double its weight each week, on its first birthday we would be facing a nine billion tonne hamster. If it kept eating at the same ratio of food to body weight, by then its daily intake would be greater than the total, annual amount of maize produced worldwide. There is a reason that in nature things do not grow indefinitely”.
New economics foundation, 2010, Growth isn’t Possible, p.
Slide103 assumptions Poverty is caused by inequality
Orthodox, undifferentiated economic growth requires and reproduces inequality as a structural feature of a growth economy
Orthodox, undifferentiated economic growth is not the same as ‘development’
Slide11Growth and development‘Since the earth itself is developing without growing, it follows that a subsystem of the earth (the economy) must eventually conform to the same behavioural mode of
development without growth
.’
Herman Daly, 1996,
Beyond Growth
A sub-system cannot grow beyond the limits of the larger system
Slide12Economic GrowthThe fact that an economy is growing tells you nothing about the ‘quality’ of economic activity that is happening within it.
“in times of recession, life expectancy can rise, even as livelihoods are apparently harmed. This happens in rich countries probably due to force of circumstances, as people become healthier by consuming less and exercising more, using cheaper, more active forms of transport such as walking and cycling”.
New economics foundation. 2010,
Growth isn't possible
, p. 6
It is possible, in other words, to have both ‘economic’ and ‘uneconomic’ growth and we should not assume that growth
per se is a good thing, to be held onto at all costs.
Slide13Why the capitalist economy is ‘locked into’ economic growth
State’s plan their expenditure assuming that the economy will keep growing. If it then didn’t, there would be shortfalls in government income with repercussions for public expenditure and investment.
Companies are legally obliged to maximise returns to shareholders, and investors generally take their money wherever the highest rates of return and growth are found. ‘
Fudiciary
duty’ of corporate officers – logic of profit and accumulation.
Almost all money is lent into existence bearing interest. For every pound lent, more must be repaid, demanding growth.
Slide14Orthodox, undifferentiated economic growth - GDP
Orthodox GDP/GNP measurements
Need to differentiate– some growth is,
ceteris paribus
, positive , contributes to quality of life
‘Defensive consumption’/production – hiring security guards because of declines in social trust, crime; buying water/air filters due to environmental pollution; purchasing children's’ toys/home entertainment due to parents having no time (work pressure) or there being no appropriate/local open spaces/parks; bottled water due to poor quality of tap water
Slide15GDP does not differentiate between defensive and non-defensive consumption and production , positive and negative economic activity in terms of human flourishing, sustainability, or equality
Within an overall sustainable economy, which sectors do we want to grow and which to shrink?
A post-growth economy – consistent with growth in some sectors, so long as it does not comprise the three criteria
Slide16Arnold Toynbee:
“True growth is the ability of a society to transfer increasing amounts of energy and attention from the material side of life to the non-material side and thereby to advance its culture, capacity for compassion, sense of community, and strength of democracy.”
Slide17Slide18Growth and Inequality
“Growth is a substitute for equality of income. So long as there is growth there is hope, and that makes large income differentials tolerable” (Wallach, 1972).
“We
are addicted to growth because we are addicted to large inequalities in income and wealth. What about the poor? Let them eat growth! Better yet, let them feed on the hope of eating growth in the future
!”
(Herman Daly
,
1991)
Slide19Economic growth, inequality and ‘trickle down’ economics....
Slide20Inequality and the global economic crisis
“A striking and often overlooked similarity between these two crises (the Great Depression which began in 1929 and the 2007/08 crisis) is that both were preceded by a sharp increase in income and wealth inequality, and by a similarly sharp increase in debt-to-income ratios among lower- and middle-income households”. (
Kumhof
and
Ranciere
, 2011: 1)
Savings at top and increased borrowing at the bottom leads to financial instability and makes an economic crisis more likely.
Rise in indebtedness to compensate for declining real wages
Share of national income is a function of class bargaining power – role of unions in increasing share going to workers, role of state in supporting claims of the rich etc.
Slide21Inequality and the global economic crisis ...contd
“The key mechanism, reflected in a rapid growth in the size of the financial sector,
is the recycling of part of the additional income gained by high income households back to the rest of the population by way of loans
, thereby allowing the latter to sustain consumption levels, at least for a while” (p.30)
Thus, lowering socio-economic inequality is a prudent ‘risk management’ policy
“redistribution policies that give workers the means to repay their obligations over time, and that therefore reduce crisis-risk ex-ante, can be more desirable from a macroeconomic stabilization point of view than ex-post policies such as bailouts or debt restructurings” (ibid.: 1)
Slide22Post-growth redistributive politicsPost-growth economics brings back redistributive politics with a vengeance
A re-negotiation of the social contract when inequality cannot be managed by growth or promises of growth
Issues and claims of injustice can not longer be justified/answered with pro-growth rationale
Slide23Growth and human flourishing
UK Cabinet Office’s Strategy Unit report,
“
above a certain threshold of consumption, there is no clear relationship between economic growth and quality of life
.” (Foley, 2005)
The Swedish EPA has called for strategies to target both the supply (production) and demand (consumption) sides through the propagation of eco-efficiency in production and by embedding a notion of ‘sufficiency’ in consumption.
“
The ultimate question facing today’s society in developed countries is whether consumerism actually contributes to human welfare and happiness
…” (EPA, Sweden, 2005)
Slide24From Economic Growth and Consumption to Economic Security
“People in countries that provide citizens with a high level of economic security have a higher level of happiness on average, as measured by surveys of national levels of life-satisfaction and happiness…
The most important determinant of national happiness is not income level
– there is a positive association, but rising income seems to have little effect as wealthy countries grow more wealthier.
Rather the key factor is the extent of income security, measured in terms of income protection and a low degree of income inequality
.” (Emphasis added)
International
Labor
Organisation, (2004),
Security for a Better World
Replacing economic growth with ‘economic security
Slide25NESC report Well-being Matters: A Social Report for Ireland (Oct, 2009)
“From growth of total GNP to GNP per head
to sustainable growth
;
From income growth to
a more equal distribution of income
;
From absolute job creation to overall employment rate to
participation rate
;
From an exclusive focus on income to
a balance between income and better provision of accessible, affordable quality services
;
From developer-led developments to
planned and sustainable communities;
From ‘survival of the fittest’ to
a more egalitarian society”
Executive summary, p.xix
Slide26Factors influencing well-being (Jackson, 2009)
Slide27From the ‘Goods Life’ to the ‘Good Life’?
“The necessity to reduce our material impact on the ecosystem is normally seen as a threat to our ‘standard of living’.
However…it is existing patterns of consumption that compromise our prospects for ‘the good life’.
Re-visioning the way we satisfy our needs is not the bitter pill of eco-fascism; it is the most obvious avenue for renewing genuine human development”.
(Jackson and Marks, 1998: 38; emphasis added)
Slide28Economic growth as ideology The fact that questioning economic growth is largely viewed as unthinkable, crazy etc. does seem to point in the direction either…
That it
’
s some ‘force of nature’ like the laws of gravity; there fore to question it is to be not just ‘wrong’ but profoundly (and dangerously) in error as to the nature of the world
Or… it
’
s a profoundly ideological construct, such that merely questioning it evokes such powerful and defensive reactions
Slide29Economic growth as a ‘mobilisation of meaning’
“Relations
of domination are sustained by a mobilisation of meaning which legitimates, dissimulates or reifies an existing state of affairs and meaning can be
mobilised
because it is an essentially open, shifting,
indeterminate phenomenon” (Thompson, 1985
: 132).
The reification
, legitimation and
dissimilation of economic growth as ideology , from public debate, education and formal training in neoclassical economics (which dominates economics as a discipline)
All with the purpose of obscuring and reproducing relations of domination and control
Slide30Economic Growth as Ideology
How do we explain the continuing popular and political support for orthodox economic growth in face of growing evidence that
its ecologically impossible;
manages but does not tackle inequality;
after a threshold does not add to average well-being?
Amongst the general population and not just economic or political elites?
Economic growth (and orthodox economics) as ideological (as well as a structural imperative of capitalism)
“the idea of ‘economic growth’ as a permanent feature of an economy serves the interests of a minority not a majority” (Barry, 2012: 151)
Slide31The veto power of ‘commonsense’ economics...
“assertions about economics are used as a kind of veto to rule out new ideas and proposals without further discussion… veto economics rejects ideas and proposals with just one word, offering no further explanation. Favourite veto words include ‘inefficient’, ‘irrational’ and ‘anti-competitive…as a last resort there is always the plain but vacuous condemnation ‘uneconomic’”
(Aldred, 2008: 3-4).
Slide32Capitalist economic growth“under capitalism workers don’t have job security like tenured professors. This fact may partially explain why it is that, despite all the anti-growth books published since the 1970s, there is no public support out there for a capitalist steady-state economy. …Poll after poll shows that ordinary citizens want to see the environment cleaned up, want to see a stop to the pillage of the planet, the threat of destruction of their children’s future. But as workers in a capitalist economy, “no growth” just means no jobs.” (Smith, 2010: 35).
Hence its entirely rational (within capitalism) to support economic growth – even though it causes ecological destruction, increases inequalities, erodes security and locks in a carbon-based energy system
Slide33Radical potential of post-growth politics
Arguing for a post-growth economics, questioning the dominant narrative of ‘economic recovery’ being a return to economic growth, competitiveness, FDI etc., opens up a transformative radical political space
To suggest we think about a new development model and way of thinking about the economy and what constitutes ‘economics’
Repoliticise
the economy and a return to political economy
Post-growth economics, an opportunity for a fundamental rethink in the context of a crisis and to use t he crisis for transformative thinking and political action
Replace ‘economic growth’ with ‘economic security’
Slide34Difficulties with post-growthHard sell!
Can be viewed as anti-aspirational, backward, regressive, defeatist, unattractive etc.
How to promote a new paradigm in thinking about the economy and society
Very difficult (but not impossible) n context of austerity, and general desire to return to growth
What is the narrative/storyline of post-growth?
Slide35Post-growth political economy: From ‘employment’ to ‘work’?
Post-growth: What is required in the relationship between employment and work, production and reproduction, the formal cash economy and the core economy is
“a redefinition of work to include the full diversity of what is necessary for life. It requires we find new ways of valuing parenting, caring and community building as much as paid work” (Boyle and Simms, 2009: 89).
What would public policy and economic policy look like if they were orientated towards supporting ‘work’ and not just ‘employment’?
Slide36Post-growth political economy
Does move in direction of a new development model for the state, new way of thinking about the economy and economics
Sharing and public services , infrastructural investment rather than personal disposal income and consumption
Meaningful free time (not
unchosen
unemployment) within context of economic security and sufficiency
Shift from exclusive focus on the formal/cash economy (conventional public and private) to social/informal/convivial
Replace economic growth with ‘economic security’ (or equivalent
Place as an objective of the economy improving the ecological efficiency of human flourishing
Slide37“Economic growth, for so long the great engine of progress, has, in the rich countries, largely finished its work. Not only have measures of well-being and happiness ceased to rise with economic growth but, as affluent societies have grown richer, there have been long-term rises in rates of anxiety, depression, and numerous other social problems. The populations of rich countries have got to the end of a long historical journey”.
Wilkinson, R and Pickett, K. (2009),
The Spirit Level: why more equal societies almost always do better
, pp.5–6.
Slide38Choices ahead....
…..