Growing the economy

Mainstream economics is a kind of Ponzi scheme, made famous last year by the scandal of Bernie Madoff, who parted many fools from their money by making them believe that they were onto a good thing with his scam, that delivered profits while it was growing, only to collapse when growth began to falter. Recently, endorsement for our no-growth position has come from Nicholas Stern, who said in connection with climate change “At some point we would have to think about whether we want future growth” and Adair Turner, head of the Financial Services Authority, who has said “If you spend your time thinking that the most important objective of public policy is to get growth up from 1.9% to 2% and even better 2.1% we’re pursuing a sort of false god”.

Now that our ideas are moving into the mainstream, it is time to look in more detail at what is implied by our no-growth position. First, it is important to understand that it is growth in throughput in materials that is the limiting factor. The present economy has a linear model: Mine-Manufacture-Use-Dispose. In pursuit of a sustainable economy, we need to develop a cyclical model of production, consisting of Manufacture, Use, Repair, Re-use, Recycle. In this transition, as well as losing jobs in mining, we gain jobs in repair and recycling. In fact the green economy is decidedly more labour intensive than the grey economy. Our critics will claim this as a disadvantage, but we can show that the labour intensiveness of green economics is in the end an advantage, by pointing to the economic and social costs of unemployment. Money given to real people circulates more rapidly, and is better for the economy than profits accruing to shareholders of multinational corporations, since rich shareholders simply hoard their wealth, while workers feed their wages back into the local economy.

In the cyclical economy, the durability of goods has an important part to play. Under Margaret Thatcher, we saw British manufacturing give way to the “service sector” as goods manufacture was outsourced to China and other places where low wages, poor conditions and disregard for the environment could produce goods at impossibly low cost. Many of these goods are of very low quality and have short, and sometimes very short, working lives. We are offered cheap tools that fall apart after a few hours of use. Items which have good intentions also fail to function. I replaced a 500-watt outdoor security light with a solar lamp, an excellent idea, but it fails after a few weeks. I pack it up, return it to the trader, who supplies another one, which duly fails again after a few weeks. These short life goods have a similar energy requirement to put them together as a high quality item, and the fact that they are rapidly discarded represents a further contribution to resource depletion and the greenhouse effect.

It does not have to be like this. My sister has a refrigerator made in the 1930s. Plug it in, switch it on, and it does the cooling thing as well as it did the day it was made, without making a sound. There are no disposal costs, no CFCs vented to the atmosphere at the end of its life. This approach to manufacture was deliberately changed to one of planned obsolescence, which was first mentioned in Bernard London’s 1932 pamphlet, Ending the Depression Through Planned Obsolescence.

Aside from the transition to durable goods, the most urgent priority for greening the economy has to be decarbonisation, and we claim that our Green New Deal will create a million jobs in energy conservation and renewables. Note that this means growth in the energy conservation and renewable sector, so that in achieving zero economic growth, we will be seeing growth (which we can term development, if preferred) in the green sector. The net growth in the GND will be less than the million new jobs, since some jobs will be lost in the fossil fuel sector; nevertheless, there is real room for expansion in the green sector.

In conclusion, when we speak out against the absurd notion of perpetual economic growth, we have a follow up for the common objection that it will crash the economy. There is more to be said than that, and we can show that green economics is not only good for the environment, but is also good for society.