A Post-Growth Economy FAQ

Behind the problems of climate change, resource depletion and biodiversity loss, not to mention a fair degree of injustice, is our pursuit of economic growth. It is the driver behind ever increasing consumption, and we will never achieve a sustainable society without addressing the issue of growth.

There is one compelling, and in my opinion inevitable, solution to growth – learning to live without it. But what does a post-growth economy look like?

This is my attempt to answer some of the common questions around this new economy. If you’ve got a question that I haven’t covered, add it as a comment and we’ll discuss it together.

Does a sustainable economy mean an end to progress and change?
‘I don’t want to live in an economy where everything is the same, where progress is halted and human creativity is stifled’, is a common response to post-growth theories. I agree absolutely – I wouldn’t wish to live in that kind of economy either. The new economy doesn’t hit the pause button on progress, innovation, science, creativity, culture or change, and neither does it go backwards. It just sets some new parameters, and will therefore deliver a different kind of change. Instead of bigger, we’ll have to develop better; qualitative change rather than quantitative. We may not consume as much, but our lives may well improve in all kinds of other ways – more leisure time, greater involvement in the arts and in local democracy, better health, and a cleaner environment.

This is where the term ‘steady state economy’ is a little awkward, as it sounds static and immobile. Other writers even describe a ‘stationary state’. The reality is much more interesting. Rather than picturing a flat-lining graph, imagine riding a bicycle or walking a tightrope – this is balance and poise, a dynamic equilibrium, and the new economy will similarly react to new technologies and adapt to changing situations.


Without growth, won’t the poor be abandoned to their poverty?
This is one of the first ripostes to anyone who questions growth. In fact, the opposite is more likely to be true – the growth model of economics cannot solve poverty. Poverty is relative, and growth is distributed unequally, which means that when the economy grows, the rich get richer much faster than the poor get less poor. Even if distribution was equal, a rise in incomes for everyone means the proportions would stay the same. As I’ve shown elsewhere, Britain’s economy has grown fivefold in the last thirty years without reducing the number of households living in poverty.

The new economy would not have growth as an excuse, and so it would need to focus much more on equality and opportunity, dealing with the root causes of poverty and creating a just society.

Will ending growth create massive unemployment?
Under our current system, there are disastrous job losses whenever the economy goes into recession. It’s an inherently unstable system that is guaranteed to deliver a jobs cull every ten to twelve years, until it eventually runs out of steam altogether. The transition may be rocky, but a steady state should be much more stable in the longer term.

In the new economy, growth in materials will be limited, but there will still be plenty of change within the system. New businesses will start and jobs will be created. Some sectors will shrink – aviation, oil extraction and so on, but other sectors will boom. Renewable energy is going to be a growing industry for some time to come. Without cheap oil, some aspects of globalization may go into reverse, bringing manufacturing jobs nearer to the point of sale. Food sources will relocalize, re-invigorating local agriculture.

On my walk to the station I pass a tailor, a lawnmower workshop and a TV repair man, all of which are unusual, but these kinds of businesses will be returning to a street near you. As we move away from a throwaway culture, repairing, renovating and recycling will be more important. As resources become more expensive, the price of material goods will rise. Those with disposable income may choose to spend it on services rather than products – a spa visit rather than a shopping spree. This is often referred to as the ‘Cinderella economy’, and it has a healthy future.

Isn’t the Steady State Economy just Socialism in disguise?
There is a real fear in some quarters that anything to do with sustainability sets us off on a slippery slope towards socialism.  I presume that this is because stewarding resources will mean tighter regulation in some areas, but regulation doesn’t necessarily mean bigger government. For it to work, the new economy will need to put a price on pollution, and a cap on declining resources. Both of those will require government intervention to start, but healthy markets to deliver.

Nature draws no distinction between ideologies, and the world doesn’t fit into our political constructs. Something is either sustainable or it isn’t, and neither capitalism nor socialism is ‘the answer’. No philosophy or political party is right on everything, and we’re going to have to draw ideas from all over the place, asking what works and combining it all to form something new. The final picture may include capitalist market structures, but socialist cooperatives, with elements of Islamic finance perhaps, some  ‘Buddhist economics’, and Christian ideas of stewardship. Maybe we’ll learn from the Agrarians in valuing farming, with a Distributist view of land and the non-revolutionary approach of the Fabians. The new economy needs to build on the best ideas of the past, and stay open to new ones.

Would world trade still be possible?
Globalisation has blown the doors of free trade wide open, and international trade is one of the big drivers of economic growth. This trade would not disappear in the new economy, but it would be subject to a different set of priorities and therefore very different.

For one thing, wasteful trade would come to a natural end. For example, Britain exports potatoes to Germany, and imports almost exactly the same tonnage from Germany back to Britain. There’s no need for government to step in and regulate that kind of thing – the rising costs of oil will make it uneconomic. Cheap oil and free pollution make shipping costs negligible at the moment. As that changes, the comparative advantage of cheap labour overseas will evaporate. As Jeff Rubin explains, that could mean a ‘homecoming’ for many off-shored production businesses.

There is, of course, an appropriate level at which things should be manufactured. Potatoes can be grown locally, but we’re never going to have a village microchip factory. The new market conditions of a sustainable economy would gradually re-order production priorities at the local, national, regional and international level. Advanced technologies, large items and luxury goods will still be traded internationally, while other things will be traded more locally.

What about population?
There are two kinds of growth – linear growth and exponential growth. The first is a fixed increase, which gives us a steady upward line. The second is growth that builds on what is already there and accelerates over time, giving us steep rising curves. Capital increases in this way as interest accrues, and so does population. (If a couple has three children, and each of those has three of their own, you have nine new people. If they all have three children, the original couple now have 27 great grandchildren. If the pattern carries on, by the tenth generation you’d have a town of over 60,000 descendants.)

What population growth does is put an exponential spin on everything else – giving us the distinctive hockey stick curves that have defined this century, in water use, food production, deforestation, and of course CO2 emissions.

The new economy is predicated on a stable population, one where the birth rate roughly equals the death rate. Many countries are already addressing this, including Bangladesh, where mothers had an average of 6.2 children in the 1970s and now have 2.74. There is no need to fear the issue, since the best ways of encouraging people to have fewer children are things we can (almost) all agree on: education, empowering women, healthcare, and poverty alleviation.

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32 Comments on “A Post-Growth Economy FAQ”

  1. Dave Gardner September 21, 2010 at 4:15 am #

    Thanks for this fairly simple, but much needed explanation, Jeremy. I will recommend this to the masses out there who need comforting! The future will only look like a scene from Road Warrior if we CAN’T embrace the end of growth and gracefully move into the era of sustainability.

    Dave Gardner
    Producing the documentary
    Hooked on Growth

    http://www.growthbusters.org

  2. perceptions_now September 21, 2010 at 11:44 am #

    In the words of Arthur Schopenhauer –

    All Truth passes through three stages.
    First, it is ridiculed.
    Second, it is violently opposed.
    Third, it is accepted as being self-evident.

    Much of what you have said, will eventually become self-evident!

    And, as Dr Albert Bartlett said –
    The First Law of Sustainability, is that Population growth &/or growth in the rates of Consumption of Resources CAN NOT BE SUSTAINED!

    In my opinion, a Post Growth is not only likely, it is actually INEVITABLE.

    We are now living thru an era, where we (humans) have started, are & will continue to bump into glass ceilings in respect of Essential Resources (including ENERGY (Oil, Coal & Gas), Food & Fresh water).

    In addition, we will also be subject to another glass ceiling, caused by Climate Change, in terms of what that will mean in terms of the use of Fossil Fuels & in agriculture.

    And finally, the ultimate glass ceiling, which is that of Global Population, which has gone from 2 Billion in 1930, to nearly 7 Billion now!

    It is actually our growing Global Population & Cheap & Abundant Oil that has been the major Economic drivers of the past 150 years, but that is now ending, as Oil is already started to Peak and Global Population has already started to age (Baby Boomers) & growth is slowing, prior to it actually starting to decline, probably with the next 20-30 years and that decline will then be likely to continue, until at least the end of this century.

    The Population process, issues relevant to an inevitable Energy decline & Climate Change mean that the current paradigm of a “Growth World” is coming to an end.

    What will all this mean?

    It means we need a new Economic/Political paradigm and we need it quickly! We also need to understand that there can be “life after growth”. In fact, it will become self-evident, at some point, that life will no longer be possible with growth.

    Once that point is reached, then it may be possible to re-balance everything and move on to the next chapter!

    But before we can even think about that, we need to challenge & change the human condition, move away from our desire to stay with the status quo & resolve the mountain of Debt that stands in the way.

  3. Happy September 21, 2010 at 4:25 pm #

    The real problem is 7 BILLION people on a finite planet (predicted to be 9 BILLION by 2050). Humans are not all evolving at the same rate and therefore able to understand the problem much less the solution so the population will unfortunately continue to explode exponentially. There will also always be the greedy who will exploit the weak and wage wars. Even if we put contraceptives in the drinking water (my fantasy) and stabilized the population immediately, the existing numbers exceed the carrying capacity of the planet and are not sustainable. Your utopian alternative sounds much like existing third world countries today, and I agree we are probably headed there…including the problems those countries are now facing as their populations continue to increase. Dream on! Reality suggests a far grimmer future (Pakistan, Sudan and Zimbabwe for example).

    • Jeremy September 22, 2010 at 9:30 am #

      Thanks for raising the population question, I’ve added it to the FAQ.

  4. Melissa September 21, 2010 at 4:36 pm #

    Jeremy,

    Thank you so much for this post. As I reduce my consumption, I have often wondered what the answers were to the potential loss of jobs. This post was so helpful.

    I love this blog! Keep up the amazing work!!

  5. Shalom Patrick Hamou September 21, 2010 at 5:52 pm #

    _______________________________

    Our economy is slowly dying, it is kept alive artificially. No one is proposing a solution because no one has the slightest idea of why it is happening and many have vested interest in the present system. However an objective observation of the phenomenon can help us understand it and provide us with an innovative solution. Of course we can’t solve the problem with the tools that brought us there in the first place and we need a new ideology.

    _______________________________

    - Do you feel that your ideology pushed you to make decisions that you wish you had not made?

    – Well, remember that what an ideology is, is a conceptual framework with the way people deal with reality. Everyone has one. You have to — to exist, you need an ideology. The question is whether it is accurate or not. And what I’m saying to you is, yes, I found a flaw. I don’t know how significant or permanent it is, but I’ve been very distressed by that fact.

    – You found a flaw in the reality…(!!!???)

    – Flaw in the model that I perceived is the critical functioning structure that defines how the world works, so to speak.

    – In other words, you found that your view of the world, your ideology, was not right, it was not working?

    – That is — precisely. No, that’s precisely the reason I was shocked, because I had been going for 40 years or more with very considerable evidence that it was working exceptionally well.

    _______________________________

    An Innovative Credit Free, Free Market, Post Crash Economy

    A Tract on Monetary Reform

    _______________________________

  6. Cassandra September 22, 2010 at 3:53 pm #

    “our economy…no one has the slightest idea why it is happening”

    I suggest you read “The Creature from Jekyll Island”. Economies based on fiat currencies ALWAYS follow the current path.

  7. Fehmeen | Microfinance Hub September 23, 2010 at 8:46 am #

    I found this well-explained thought-experiment highly interesting since I saw something similar on Discovery Channel the other day. The documentary discussed the impact of our consumerism-based lifestyles and uncontrolled population growth on planet Earth after several decades and here are some of the consequences explored in the scenario:

    – excess consumption of oil and water led to severe scarcity of those resources, hence massive delays were seen in the completion of construction projects.

    – cars littred roads causing traffic jams that last weeks on end. The government banned the use of cars for commuting and everyone travels via public transport; the roads are open only to pedestrians and buses.

    – because of severe water shortage, people abandoned their cities and towns and flocked to areas near natural water sources (rivers, seas and oceans).

    – after realizing the planet cannot sustain the 30billion or so population, the growth rate becomes negative and the world population stabilizes at 4billion (less than the current amount), after which, people begin to start all over again.

    I thought it would add to the scenario you explained above.

  8. Øyvind Holmstad November 18, 2011 at 8:40 am #

    In short, we should use living technologies, not dead ones like today: http://permaculture.org.au/2011/11/09/from-ideology-to-technology/

  9. Jonathon Rutherford March 20, 2012 at 10:04 pm #

    Hi Jeremy,

    Thanks for this summary, good to see more people thinking about post-growth economics. I would like to draw your attention to the work of Ted Trainer, an ecologist in Australia, who has thought deeply about these issues for a lot longer than most of us. His website contains a wealth of information on the shape and form of the required alternative – which he calls the Simpler Way – and how we can try to get there. Trainer’s vision may seem to be a little too radical at first, but I enourage you to consider the case he is making, and perhaps more importantly, his practical advice for transition..His website is here:

    http://socialsciences.arts.unsw.edu.au/tsw/

    Cheers

    • Jeremy March 21, 2012 at 6:00 pm #

      Thanks Johnathon, I’ll look him up.

      Cheers,

      Jeremy

  10. Scott June 7, 2012 at 4:24 pm #

    Good Post -)

  11. creasedcarpet April 3, 2013 at 3:20 pm #

    The global Gini Index (a measure of income inequality) has actually been falling over the last 10 years or so. This fall is mostly the RESULT of economic growth (and not the reduction of growth due to the recession). While the west needs to stop being wasteful globally we still need to grow to pull people out of poverty.

    http://www.un.org/esa/desa/papers/2005/wp2_2005.pdf

    This may seem counter-intuitive to most people but the majority of growth in the world has been occurring in the developing world where we don’t see it day to day. Particularly in China and the other BRICs (Brazil, Russia, India & China). As these countries are significantly poorer than the west this has reduced global inequality.

    To illustrate this the following graph shows most rich countries growing below the global average http://tinyurl.com/bnae5m2 while East Asian & Pacific is growing well above. This region includes 2 billion people, around double the entire ‘western’ world! Further growth is a good thing, only the nature of that growth needs to be addressed.

  12. Tegan Tallullah May 8, 2013 at 3:35 pm #

    Reblogged this on Earth Baby and commented:
    Growth is outdated and unsustainable as a driving goal of economics. Various writers and think-tanks have been chatting about what some call a ‘steady-state economy’ or ‘post-growth economy’. I prefer the second term, as it brings to mind something more advanced and modern, rather than something static. This post by Make Wealth History is the best summary of the concept I’ve ever seen. Bring it on!

  13. Tegan Tallullah May 8, 2013 at 3:36 pm #

    Great article, I’ve reblogged it on my blog:
    http://www.babyearthblog.wordpress.com

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  15. permaculture jokes March 18, 2014 at 11:10 am #

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  16. Dave April 27, 2014 at 6:31 pm #

    Hmm! Complex issues, more easily thought about and talked about than done … this really isn’t about any paradigm we can design into a system to ameliorate against human waste, excess and proliferation …but more about the long painful wait for the human species to be forced, by reaching the limits of our environments ability to maintain us, to confront our own egotistical nature. It’s probably heretical to suggest that we won’t get to the imagined goal of happy equilibrium by trying ….but I feel the ‘try to overcome’ spirit of human kind IS what will finally be the vehicle of our decline.

    I have to say that your blog and its responses do provide me enjoyable mental sweeties along the way – keep up the good work …. even if it only makes the ride more comfy.

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