This is one of a series of blogs aimed at raising awareness of the everyday external reality we take for granted (the matrix) and then considering how well it really works for our collective well-being, both short and long-term. This week the lens is focussed on the economy.
It seems fundamental to human life on earth that we can only prosper in a growing economy. Every country seeks it; politicians are determined to stimulate it; bankers count on it; we’re told our livelihoods and our futures depend upon it; national success is measured by it.
Now I am not an economist – though I consider myself reasonably able to understand complex things. I have given it some thought and read some books in my desire to understand, but I'm still left with some basic questions…
When the economy grows, exactly what is it that is getting bigger? How big is it now? How big could it possibly get? How big should it be? I had expected that these fundamental questions would be addressed in the first few pages of any economic text – but alas, that's not the case.
It seems that one thing that gets bigger is GDP – the annual flow of goods and services in the market. Goods are produced using natural resources and energy, and then they are purchased, used and eventually discarded or recycled. Services are purchased and used straight away. So there is no accumulation of assets over the longer term – and the prosperity that GDP purports to represent is in fact, just ever-increasing levels of production and consumption.
It seems to be a cash flow measure with no Profit-and-Loss or Balance Sheet.
And this model upon which our well-being is balanced seems to assume that natural resources and energy are in unlimited supply, and that waste products and pollution are at no cost to us once outside of the economic system. Logically there must be a point where an ever-growing economy overwhelms and destroys an ever-diminishing ecosystem on which it relies. We must eventually run out of productive farmland, non-renewable energy, a myriad of other natural resources and accumulate sufficient waste and pollution to make the environment unsustainable. Where is that point and how far away is it? It seems to me that we’re going to find out the hard way! GDP does not separate costs from benefits, so there is no way that we can tell when the cost of growth exceeds the benefits derived.
Some writers claim that there is much evidence that some countries have already passed the break-even point and entered an era of uneconomic growth – which means that further growth is actually making them poorer, not richer. If I was running a country I would want to know how we were tracking towards that point, and what we planned to do before we reached it. But we can't even agree on whether or not there should be a carbon tax, or indeed if there is actually any problem at all! And if a carbon trading scheme does eventually get up, is it wise to hand it over to the same market forces that drive an ever-growing economy and an ever-growing carbon problem?
But then, I'm not an economist!
I have found books by highly experienced (and politically unbiased) people who identify the true causes and offer well-considered solutions for implementation at the political level. They don’t however offer hope on how we find the political will to do what is necessary instead of what is politically expedient.
The book that left me with the greatest hope for creating a sustainable future, that is grounded in the political realities of today is “Prosperity Without Growth” by Tim Jackson, published 2009 by Earthscan. If you want to read just one book on the subject, I recommend this one.
The good news is that general solutions have already been thought through by highly experienced experts and many more precise solutions can be evolved as we progress. There is no doubt that we must transition to a whole new economic model, with enormous ramifications for our current way of life. The consequences of doing nothing are an inevitable disaster. The core problem is that no politician has yet dared to ask those simple questions publicly – that would be questioning the matrix!
So what can we do as ordinary citizens? It seems to me that we can publicly ask those simple questions of our politicians at all levels – and demand the simple answers (which they will not be able to provide).
- When the economy grows, exactly what is it that is getting bigger?
- How big is it now?
- How big could it possibly get?
- How big should it be?
So why not ask someone new every day?
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