Most politicians and economists consider economic growth as the solution for all sorts of crises like unemployment, the debt crisis or global poverty. But since the Club of Rome report "The Limits to Growth", published in 1972, there are doubts whether the economy can go on growing without destroying its own foundations. Humankind is already consuming resources as if there were 1.5 planets available. Climate change and the destruction of biodiversity are accelerating. Tim Jackson, advisor to the British government and author of the book "Prosperity without Growth" explains why technology alone can't resolve the dilemma.
Tim Jackson, Professor of Sustainable Development at the University of Surrey, England. Author of the book "Prosperity without Growth"
David Goeßmann: Welcome to Kontext TV. For most economists and politicians, economic growth is essential to overcome all sorts of crises, reaching from unemployment to the debt crisis and global poverty.
Fabian Scheidler: But since the Club-of-Rome-report „The Limits to Growth“ was published in 1972, there are serious doubts whether our economies can go on growing forever. Today, mankind is already consuming as many resources as if we would have 1.5 planets available. But there is only one planet. And on earth, forests, fishing grounds, glaciers, plant and animal species are degraded or destroyed at an unprecedented rate.
David Goeßmann: The German Bundestag has convoked a commission to explore whether growth can be equated with prosperity. And the network Attac has organized a large conference to examine if and how an economy „beyond growth“ is feasible. Kontext TV talked to guests of the conference including the world renowned civil rights activist and ecologist Vandana Shiva from India.
Fabian Scheidler: Our first guest is Tim Jackson. Jackson is Professor of Sustainable Development and Director of the Research Group on Lifestyles, Values and Environment at the University of Surrey. In April 2004, he was appointed as Economics Commissioner to the UK Sustainable Development Commission. He is author of the book „Prosperity without Growth". We talked to Tim Jackson at the conference „Beyond Growth?!“ in Berlin. Welcome to KontextTV, Tim Jackson.
Tim Jackson: Thank you very much, Vielen Dank.
Fabian Scheidler: Explain first of all what’s behind the term growth or economic growth. Also about the significance of the Gross Domestic Product which is supposed to measure growth. What is measured exactly in the GDP and what is not. What is growing when we say the economy is growing?
Tim Jackson: Well, the GDP is a measure of the economic output of the economy, the production of goods and services. And since those goods and services are all consumed by people, people buy them and use them, the GDP also measures how much we consume in the economy. So it’s a measure of the economic value of what we produce and consume in the economy. And it also tells us quite usefully how much income we get from the production of those goods that we then can spend on the consumption of them. It’s a set of accounts, a little bit like your bank statement in the household. It tells you how much income you’ve got and what you're spending it on and what you have to spare to go into savings. It’s a measure of that at the national economy level. When we talk about growth, economic growth, what we’re talking about is continual increase in that level of income, a continual increase in the production of goods and services and a continual increase in how much we consume. That's the subject matter for what is now a quite intense debate about the sustainability of that model of continually increasing GDP.
Fabian Scheilder: And what isn’t measured by the GDP?
Tim Jackson: All sorts of things, really. You don’t measure the pollution that you cause in the process of making those goods and services. You don't measure all the value that's in domestic labour for example, people working outside the formal economy. You don’t measure the quality of the goods although the GDP is supposed to be some measure of quality, it’s largely based around measuring a quantity of throughput through the economy. You don't measure all the goods that you have to buy to defend yourself against all the harms that are produced because you are producing goods somewhere else in the economy. These defensive expenditures are counted as positive all the time. We don't separate that out from the GDP. Everything is good as long as it is contributing to the GDP. If we have a car crash that is good for the GDP because it means more hospitals, more car repairers, a new car has to be bought. But the impact on people’s lives is left out of the account. So it is a very blunt measure of briefly business in the economy. But it is a very poor measure of quality, particularly of quality of life.
David Goeßmann: In 1972 the study “limits of growth” was published by the Club of Rome with a new version in 2004, predicting global breakdown until 2100. What did Danella and Dennis Meadow find out with their colleagues at the MIT and how reliable are these date and what are the conclusions you draw from this?
Tim Jackson: I’m glad that you mentioned, that it was by 2100 they predicted that collapse because a lot of people think that it was by the end of the 2000s and when we didn’t see it, they said “those limits to growth people got it all wrong.” But actually the limits to growth work was the first serious attempt to put on the map the fact, that we are building economic growth out of material resources, and we are doing it only thanks to the environmental integrity of the systems around us, the climate, the water, the soil and so on. What they did essentially was to say, well, these are the rates at which we think the economy is going to expand. These are the available resources and the rates at which we think we might have to extract those resources and that should tell us at which point those resources will no longer be available because we used them all up or dissipated them through the environment or because we degraded the environmental systems to much to keep growth going. They predicted to paths: One was a path of continual exponential growth of material throughput leading to collapse. And then they predicted another path which was a path of increasing efficiency and substitution towards natural cycles which they believed could lead us towards a more sustainable economy. We haven’t got either of those places just yet. But what is remarkable is, that the work that was done in 2004 and indeed earlier – there was an early paper in 2000 – which statistically matched the predictions of the Meadows report, of the limits to growth report with what had actually happened. In other words: The got it right, they got it incredibly accurately right. Right trough the beginning of the 21st century. And that is the point at which we are now beginning to see exactly the kinds of resource issues they predicted when they launched there report in 1972. It was very foresightful. It laid the ground for a very important discussion: In particular about whether it is possible to decouple economic growth from the throughput of material resources. Because the one thing we know for sure is we cannot keep material resources going beyond the capacity of the planet.
Fabian Scheidler: Tim Jackson, talk about the ecological limitations to growth with regard to climate change, biodiversity, soils and other resources.
Tim Jackson: Sure. Well in a way it is about the physics of the system. You take stuff out of the ground, you turn it into products, you sell the products, you use them and you throw them away. There is a huge throughput of materials. And in every area you look at, this material throughput is beyond anything we see in nature. It is a scale of throughput, that is damaging the environment and that is degrading the natural resources. Climate is one example of that. How does that happen – it happens by largely taking fossil fuels out of the earth, burning them and putting Carbon Dioxide into the atmosphere which changes the concentration of carbon in the atmosphere and leads to climatic change. That is probably the most high profile environmental and ecological issue. The best understanding of science is, that we need to reduce our emissions of carbon dioxide by something like 80% within the next 40 years. This is not a trivial thing to do, particularly in an economy that is addicted to fossil fuels. It’s a huge change, largely a technological one. Perhaps the most the most difficult point of all is that if there’s an easy problem it’s probably climate change. The question of biodiversity is considerably harder and the scientific consensus is that the biodiversity challenge, the biodiversity impact are more severe potentially than the climate change impact. We are further away from a sustainable level of species loss in society than we have ever been and further away from a sustainable level of species loss than from a sustainable climate. This is about the impact of human development on the habitat of the other species that we share the planet with. And although we may not value them very highly, we may not think that much of them, the integrity of our ecosystems depends on that species’ diversity. By continually destroying it, we risk actually the entire integrity of our food production system for example. And indeed the link between biodiversity and climate is very strong. All of these links of all these issues tend to be quite strongly linked. These are ecological challenges beyond anything that human society has faced in the past. Many politicians and also many economists believe that technical innovations will fix the problem. You talked about decoupling. There are plans that we can go with energy simply beyond any limits of growth by technological innovation. What is your view on that. What is decoupling? It is the idea that we decouple the economic activity the growth in measured economic value of the GDP from its material impact. We could do that in a number of ways, by being more efficient for example in the production of our goods and services. We could do it by shifting the production of our economies from goods which are material-based towards services which are less materially based. The hope of decupling is that by having economies which are materially lighter and lighter we can keep economic growth going. We can reduce our environmental impact and reduce our material extraction and remain sustainable. We can make economic growth sustainable. You ask me what my reaction to that is: I absolutely accept that we need to decuple economic activity from material impact. But will decupling make growth sustainable? My answer is no. It’s a form of wishful thinking, a sort of technological optimism, a belief in our own cleverness as human beings. No matter what challenges we’re faced with we can solve this problem through technology. That we can find the technological fix. And the reality is, we consistently failed to do that in the past and what we’re asking of technology now is heroic, it is a form of magical thinking to think that we can solve these issues through technology. And perhaps even worse than that. My position on this is that this economic system, this kind of society is totally incapable of decupling at anything like the rates that we need to remain sustainable.
Fabian Scheidler: Why is that?
Tim Jackson: Because it is driven by very particular system dynamics. It is driven by the dynamics of growth. The growth-based system is not just an accounting measure. It is not just something appearing in the accounts as GDP. It is not just technology it is about the organisation of society. And societies are organised in ways that persist in growth. We have set up incentive structures for firms for example, that they need to grow to survive. We have set up incentive structures within banks, that they charge profits that rely on growth to pay back the interest on the loans. We have set up incentive structures for consumers to persuade consumers that a decent life is one which is full of material goods which have to be replaced day after day and year after year. These incentive structures which we have put in place partly because of the importance of economic growth to the political mind, are driving in the wrong direction, they are just driving the system completely towards the expansion not just of the GDP but of material goods and material services. We use these goods for all sorts of ways. We have become heavily dependent on them not just for food and clothing but also for our social life, for our participation in society, for our psychological well being, our sense of meaning and purpose in life. All tied up with this very material concept of growth. This is not the society in which decupling comes naturally.
The title of your book is “Prosperity without growth.” You are demanding that the economy is run another path. Talk about this path.
Tim Jackson: The starting point is perhaps where I finished before: We have been persuaded into a situation where material
goods deliver everything in our lives. Our sense of identity, our sense of purpose, our connections to other human beings. And it is a very simple question to ask, is that legitimate? Is that route towards happiness and well being a legitimate one, does it really help my social connections to be caught in trap where I must by more and more new stuff to maintain those social connections? Or is there a way to think about prosperity that is different to thinking about income growth, different to thinking about material growth. What does prosperity actually mean to us as human beings. A starting point is to come up with a concept of prosperity in which instead of thinking about the means to an end material goods and incomes as the means to social connection and social relationships, we start to concentrate on the things that really matter to us: Our family, our friends, our community, our participation in society, our sense of meaning and purpose, our engagement in life and these are very fertile ways to think about how we organise society differently. But they rely – and lot of the book attempts to describe this – they rely on having a different kind of economics. They rely on having an economics that doesn’t put at its heart the idea of a selfish materialist human being but accepts a broader version of what it means to be human. They rely on an economics that thinks about the long term in relation to investment. They rely on an economics that reforms financial markets to make them more prudent, more secure, more able to invest in the ecological assets that we need for survival. They rely on an economics that reforms what companies are doing. How people own assets, how returns to companies are measured and how they are financed. This is not a trivial task, again. It is a task which calls on us to make concrete revisions to our economic institutions in ways that better reflect what prosperity really means to us. Prosperity in the Latin (which is where the English word prosperity comes from) it has its roots in the world for hope. Ironically we have cashed out that idea of hope as income and because we have cashed it out as income we are in the process of undermining hope by destroying the conditions for future well-being. My argument, my call, is to reclaim an idea of prosperity that does give us some hope for the future.