Monday, 4 May 2020

Guest post on growth economy, from Tony Collins

 Can we continue to grow?

Recently the journalist and environmental activist George Monbiot posted a short film about the looming dangers of economic growth. He made the point that governments across the world aspire to an annual growth rate of 3%, which means a doubling of the world economy in 24 years. 
This – if it continues – equates to uncontrolled expansion in a finite system, which is a pretty good definition of cancer. We can’t afford it. Behind the apparently modest ambition of a rising economy lies a steady drive to consume more of the world’s resources, pushing the natural world and those humans least able to defend themselves to the brink and beyond.
This is not new. In the summer of 1970, under the aegis of The Club of Rome, an international team of researchers at the Massachusetts Institute of Technology began a study of the implications of continued worldwide growth. They examined the five basic factors that determine and, in their interactions, ultimately limit growth on this planet: population increase, agricultural production, non-renewable resource depletion, industrial output, and pollution generation. 
The MIT team fed data on these five factors into a global computer model and then tested the behaviour of the model under several sets of assumptions to determine alternative patterns for mankind’s future. Their conclusion: The earth’s interlocking resources – the global system of nature in which we all live – probably cannot support present rates of economic and population growth much beyond the year 2100. The findings were presented in an influential report called The Limits to Growth, which is still available. 
The Club of Rome, which has branches in many countries, remains active and respected, though frequently opposed by advocates of capitalism.
Fifty years on, the report’s conclusions seem unavoidable. If anything, with carbon emissions wreaking havoc, we have less space to manoeuvre. So, with time running out, where do we go from here? George Monbiot advocates a community approach, where public facilities – shared, and therefore far less damaging to the planet – replace private ones. By acting together, all may prosper. 
However, this does require imagination. For some years I lived in a wealthy village in Kent. One year a proposal came before the council to build a swimming pool for the community, but it was thrown out, on the grounds that everyone had their own. 
Over the last few weeks there have been widespread calls for a change of direction. During this time of lockdown there has been an impetus towards community engagement. The British government, despite its large Conservative majority, has been sounding remarkably warm towards the public sector. So what are the chances of a more communitarian approach?
It’s possible. There are initiatives worth applauding. A current example: Birmingham, in the UK, recently announced its ambition to be recognised as a Tree City of the World, and has set itself the target of achieving a tree canopy of 25-30%. Volunteer tree wardens are being trained to care for trees, to advocate for them, and to recommend spaces for new planting. The city is working together to improve the lives of all. This is part of a larger movement, a rising awareness: across the world rewilding movements are taking hold. Given a chance, nature is quick to recover. 
Not all the signs are bad. Hans Rosling’s highly readable book Factfulness, released a couple of years ago, enumerates the global achievements of the last century – literacy for women, spreading global wealth, falling child mortality, the development of protected nature reserves, the fall in deaths from war, starvation and disease. If you want a cheerfulness boost, Rosling’s book is a goldmine. 
Optimism is justifiable, but we have to be realistic: we must stop fouling our nest, or the precious natural world is going to – not die, because Creation is too robust for that – but suffer distortions which it will take centuries to recover from. If we do not act decisively, our children and grandchildren will see huge diebacks, mounting civic unrest, an increase in dictatorships, rising nationalism, widespread starvation, poverty for billions. 
We still have a chance to turn the ship around. In our path, however, stands the current practice of economics. Investors expect shares to generate results. The key responsibility of a company is to maximize wealth for its owners, the shareholders. Many of the best-performing stocks have been in extractive industries such as oil, coal and metals, or in military equipment, or in other ethically bankrupt businesses such as tobacco or gambling. 
Corporate greed is an ugly thing, but we cannot pretend we are not complicit. We are all subscribers to the market in shares if we have savings accounts or pension funds, so very few of us have clean hands. If we use the services of one of the major high street banks, we are contributing, to some degree, in the destruction of the earth, because their shareholders demand high returns and most major banks invest in undesirable stocks. There are honourable exceptions: in the UK Nationwide has an excellent track record, for instance. There is a lot of debate in the banking sector about what it means to ‘bank green’.
One way we can contribute to a better society is to live simply, to reduce our footprint, to consume less, to buy organic, locally-grown food. Ask yourself two questions regularly: do I need this? And, how did this commodity reach me? Cheap food and cheap clothing bring with them hidden victims. The city of Amsterdam has been conducting a review of its economic policies, and one of the items thrown up has been the import to the city of chocolate, some of which is grown with the use of slavery or child labour. Agricultural practices are a huge part of the debate. Your table fork is probably your most important weapon, for good or ill. (Your second most important weapon may be your wardrobe. The world of fast fashion is not a friend of the future).
Another way of contributing to a better future is to use the checks and balances in the system. There is an honourable record of socially-conscious shareholders calling to account the executives of both companies and pension funds. If you have the know-how and tenacity, keep your money in the system and make it work for the planet.
A third way is to invest, yourself, in ethical stocks. Many unit trusts have significant ethical portfolios. The light is dawning on some of the biggest asset management companies: as reported recently in MoneyObserver, ‘BlackRock chief executive officer Larry Fink signed two letters at the start of this year that signalled a tipping point for sustainable investing. In his annual letters to clients, the head of the world’s largest asset manager said his firm would divest from thermal coal and put sustainability at the heart of its investment decisions.’ For canny investors there are good alternatives to fossil fuels: one of the leading developers of solar power, Solarcentury, recently announced positive results. But take proper financial advice – not from me – before committing yourself.
At the start of this short piece I asked, ‘Can we continue to grow?’ The answer, obviously, is no. There are encouraging signs that the message is being heard. One political leader asking the right questions is Jacinda Ardern, prime minister of New Zealand, who argues that welfare, not growth, should be the goal of the economy. 
These concerns are both long-term and urgent. Most of us are simply struggling to get by, and these big questions may seem beyond our pay grade, or too depressing. But not all the news is bad – and, given a chance, the planet can recover.


Pen Wilcock said...

Thank you so much!

A few more interesting, related links are:

The Feeding Bristol initiative (in the UK) that gets to grips with local food security.

The recent Supreme Court ruling protecting the right of local councils to invest ethically — Quakers were substantially behind making this happen.

Charles Eisenstein's book, Sacred Economics, proposing that relatedness and uniqueness are the particular characteristics of sacredness. He says, "In this book, I describe a vision of a money system and an economy that is sacred, that embodies the interrelatedness and uniqueness of all things. No longer will it be separate, in fact or in perception, from the natural matrix that underlies it. It reunites the long-sundered realms of human and nature; it is an extension of ecology that obeys all its laws and bears all of its beauty."
Tony, we have this book on Kindle.


DaisyAnon said...

There is also the Preston economic model.

It is known about but not much copied.

Pen Wilcock said...

Thanks, Daisy — I'll go and have a look at that.