Transition Culture

21 Dec 2011

Can we manage without growth? An interview with Peter Victor. Part Two

Surely in our present and unfolding predicament, to recalibrate our economy as a Steady State economy requires an enormous amount of infrastructure, investment and maybe we don’t have that kind of resource any more. Might the kind of more localised world that Transition is talking about be what we get by default rather than by design?

There are many possible futures out there.  I think that what I see is a huge amount of resources in our economy, both in terms of capital equipment, intellectual effort, finance, being directed towards the growth agenda. A different agenda, a different ambition for our society and our economy away from the pursuit of growth, would automatically free up, at least in principle, a lot of these resources.

I see it much more as a question of re-allocating the resources that we have towards an economic structure that isn’t based upon the pursuit of growth rather than thinking well somehow we’ve got to keep all those expenditures that we’re currently maintaining in the pursuit of growth and then worry about where all extra money and resources are going to come from to pay for and effect a transition in the economy?  The dilemma to me is a little bit different. It’s that the institutions that control all of these resources, both in the public and private sector, themselves are busily pursuing growth and so they’re not freeing up resources to lead into a different direction. I think it is possible, but it’s not happening as a result of the normal functioning of our current system.

I think the idea that we’ll default to more local economies whether we do it deliberately and maybe reasonably pleasantly, or whether we’ll be forced into it, is a very good question. The subtitle of my book is “Slower by design, not disaster.” If you have an economy predicated on growth that slows and maybe growth goes negative, that’s a disaster formula. That’s mass unemployment, deep poverty. Greenhouse gas emissions would go down but the social consequences of would be horrendous. That’s surely something we want to avoid.

That, though, I believe is the kind of scenario that we should be comparing to an alternative, which doesn’t pursue growth. Not a naïve notion of some kind of golden age where we were growing steadily and wondering why that can’t continue. I don’t think it can continue for the various reasons that have come up in this conversation. So, what are our alternatives? That’s really what we need to discuss. By the way, I hardly use the term, in fact I probably don’t use the term “Steady State economy” in my book at all.  I’m quite interested in the Steady State but I just think the danger is that it conjures up in some people’s mind a rather stagnant image and they don’t warm to it. So whilst I’m actually on the board of the Centre for the Advancement of the Steady State Economy here in North America, it’s a term that, well, if more people would find it favourable I would be happy to use it, but I don’t think it’s one that communicates very well.

Could you, tell us or describe to us, what does a post growth economy look like to you? Can you describe it? What would it look like, smell like and sound like? How would we know we were living in one? What’s the kind of vision that that conjures up in your mind of what it would be like?

I can give you some dimensions of it. This is something that requires a much broader public discussion than we’ve had to date. But the sorts of things that I would see are first of all, when we look at how our economy uses resources, and produces waste and occupies land, those numbers would be going down instead of up. So, efficiency of course offers us some possibilities there. We can and we have become somewhat more efficient in how we use our resources and we’ve produced less waste of many kinds per unit of economic output. The trouble is the growth of our economic output has gone up faster than the gains in efficiency, so it’s sort of overwhelmed them.

If we’re not growing so fast but we’re still getting the gains in efficiency and I do believe that’s possible, then we would see a lightening of the burden we’re placing on the biosphere.  In terms of how our lives would be lived, transportation is one aspect to look at. We’ve got a transportation system particularly in North America that’s built largely around the car. There is plenty of room, I believe, to move to much more use of public transit, so that’s a fairly simple thing to do.

I would see a shift to renewable energy, away from fossil fuels.  Some of that’s happening, but it’s happening partly as an addition to our use of fossil fuels as opposed to a replacement of the fossil fuels which is what we have to accomplish. One of the things I discuss in my book quite extensively is the idea that if we continue to become more productive as workers and employees, but the overall output of the economy’s not growing, it could be a formula for massively increased unemployment.

One answer is to work less. That would free up our time, we’d have more discretionary time. To me that’s a great element of personal freedom that I highly value. So that would be important. Some people, like Juliet Schor have taken this a bit further to consider what people might do with that extra time. This comes back, I think, very much to the Transition idea and to the use of time for more self-provisioning and local provisioning, which could be outside of the market system. That would be interesting.

They’ve done better at this in continental Europe. Maybe Britain isn’t much better than Canada, but in continental Europe they have benefitted from shortening the amount of time spent at work as compared with Canadians. It’s even worse in the US where people work some 100 -150 hours a year more than other people. I think this is a real missed opportunity: that we should be benefiting from increased productivity by working less rather than by producing and consuming more.

I think we would likely see less physical travel and less physical movement of goods, partly because I do expect energy prices to rise anyway and that will discourage these activities. The electronics revolution is a partial compensation for that. We can all now, well those of us with access to the equipment at any rate, see other parts of the world without actually physically having to go there.  I’m not sure that would be a perfect substitute, but maybe it’s the kind of sacrifice we have to make as we pass seven billion and head towards nine billion inhabitants of the planet. These are some of the things that I see, but as I say this is a subject that requires widespread public discussion and debate.

One of the things that’s put forward here is the idea of the Green New Deal, as a kind of Keynesian project of borrowing massive amounts of money in order to try and stimulate a green economy. What’s your sense of the degree to which we should go further into debt in order to create this?

Ah well, there’s so much in your question! First of all, if Keynes was writing now he’d be on side with those of us who understand that the economy is embedded in the biosphere and that that relationship has long been neglected and now can no longer be. If you read his 1931 paper on ‘Economic possibilities for our grandchildren’ you see that he was a man of great vision, not that his expectations for the future all came to pass, but just that he could conceive of a time when, as he put it, the economic problem would be solved. We’d be producing enough and we could divert our attention to, even in his own terms, much more important things, such as the arts.

I think Keynes would have been with us in this discussion. The ideas that he produced in the 1930s were for dealing with short-term unemployment. The question now is to what extent do those ideas have to be changed because of these additional considerations that we have. I’m still enough of a Keynesian to think that there’s no reason why governments have to balance their budget, except on average over a goodly length of time.

So the idea of a green Keynesianism, the idea that when governments see the need to stimulate the economy they should do so by either spending money or inducing the rest of us to spend money on activities that will help transform the economy in a green direction, I think that makes good sense. But, you know, Keynes did make it very clear in his writings that most of his interest was in the short term.

This discussion we’re having is not just about the short term. This discussion is about the medium and the long term. What’s the new direction we should be heading in? The sort of short term stimulus that he stressed shouldn’t just be expenditure on anything. It should be geared towards the transformation of the economy to something that’s more viable in the long term.

Do you think there is a case to argue that economic growth makes an economy less resilient? Can you kind of correlate it in that way? Would a more resilient economy by necessity be one that has moved beyond economic growth?

One of the main, if not the main arguments, for globalisation, by which I mean the deliberate dismantling of national restrictions on the flow of capital and trade in goods and services, has been that it’s good for economic growth. I think that that agenda has led to the decline in resilience of national and sub-national economies. We see this very much in what’s happening in Europe at the moment, where individual nations are very vulnerable to circumstances outside their borders, so it’s not so much growth itself I would say that threatens resiliency and undermines it, it’s the measures that we take in pursuit of growth that move us in one direction only.

That is, they continually weaken the capacity of communities at all levels, from local up to national and even a little bit beyond that to really have much control over what’s happening to them. That’s the problem. So it’s a little bit more complicated than saying growth it’s growth that threatens resilience, it’s what we’ve allowed our institutions to do or prevented them from doing that, as much as anything, has made our economies and our society less resilient.

Where do you see the seeds coming from for this? When you wrote this book the Occupy movement didn’t exist and that seems to have really created a space in which we can more freely question the very idea of economic growth much more freely than we could a couple of years ago. Where do you see the next steps as coming from?”

I have a passing interest in the history of ideas. To me, economic growth is an idea. It’s the modern incarnation of progress. It’s often regarded as synonymous with progress. What I discovered is that a lot has been written in the past, a lot of really interesting material that has largely been forgotten, and yet when there’s a sort of a growing awareness of an issue, such as the one we’ve been talking about, it’s really nice to know we’re not actually starting from scratch.

There’s a lot of ideas that we need to go back to and bring forward and make sure they’re in the public domain and are informing the public discussion. I’m just reading an essay written in the 1950s, it’s hard to tell from the publisher, entitled “Size of Nations and Living Standards” by Leopold Kohr.  The author’s arguing that as an economy gets bigger, as a society gets bigger, living standards eventually decline, and he does some early quantitative estimates. He reckons that the US peaked in about 1950 and that living standards have been in decline since then.

Here’s another book, “The Social Costs of Private Enterprise” by K. W. Kapp, written in 1950, all about the increasing burden that the economy is placing on the environment. They’re just fresh in my mind. There’s lots of stuff there, and what I would like to be better at is to find ways of getting these ideas out to a wider audience so that movements such as the Occupy movement, and perhaps the Transition movement, realise that there’s a considerable body of work on which to draw.

We don’t all have to make it up over the next couple of weekends. I think that’s a big part of the4 next steps. How do I put this in more simple terms? It’s about changing the stories we tell ourselves about our economy, our society, and our own selves, in terms of what we think success looks like. The pursuit of economic growth for a long time has been based on the idea that economic growth is the mark of success that we should all strive for. We need more meaningful objectives for ourselves and our economy.

Fortunately a lot of this is now being picked up. For example, the Sen/Stiglitz report of a couple of years ago, written at the instigation of Sarkozy, was about defining and measuring quality of life and sustainability. This report has been quite influential. Statistics departments around the world are looking at how they measure progress and whether they should make changes. There hasn’t been a lot, as far as I can tell, a lot of real action at the national levels yet, but there’s there’s the OECD work and in Canada we’ve just had the release of the Canadian index of well being and so on.

So there are things happening, there’s local community work, there’s the sort of thing you’re doing, there’s interest from student populations, there’s academic research, there’s more, there’s stuff going on in officialdom to make changes. The problem is it hasn’t yet congealed into a new story, which says “you know what, we should be looking to rather different objectives and using different means of getting there than we’ve been accustomed to in the past.” I can’t tell you what’s going to trigger that, maybe nothing and then we’ll be in for it, but maybe it’ll all flip pretty quickly and we’ll be on our way.