Limits to Growth
I spoke last Thursday at the Congressional Progressive Caucus Policy Summit in Baltimore on how our work at Capital Institute might have relevance to the 2012 Congress’s financial reform agenda. These are the hopes I shared for how policy could shape the Future of Finance:
John Fullerton recently spoke with filmmaker Katie Teague, creator of the soon-to-be-released documentary “Money & Life,” about the enormity of the challenges we face–climate change, environmental degradation, unsustainable wealth inequity–and the foundational shifts in our economics, politics, and even ethics that we must make in order to weather the coming storm.
We were very pleased to read Al Gore and David Blood’s “Manifesto for Sustainable Capitalism” in the WSJ last week. It called for “a framework that seeks to maximize long-term economic value by reforming markets to address real needs while integrating environmental, social and governance (ESG) metrics throughout the decision-making process.” Companies that integrate sustainability into their business models and investors who evaluate them on that basis, the manifesto claims, are finding their profitability enhanced over the longer term.
Peter Victor–eminent ecological economist, winner of the Canadian Council for the Arts' prestigious Molson Award, and author of Managing Without Growth–challenges us to reframe our economic discussions to focus on managing material and energy flows rather than GDP growth.
Richard Heinberg’s latest book, The End of Growth: Adapting to Our New Economic Reality, argues for a new economic paradigm. He presents a clear, thorough, and convincing argument that our faith in unrelenting growth and unfettered capitalism has led to the demise of our global economic system. The book is well-cited throughout, encouraging curious readers to dig deeper into the source material that helped shape Heinberg’s case. (He acknowledges in particular our own Capital Institute Founder, John Fullerton, who provided background for the book from his perspective as a former managing director at JP Morgan on how Wall Street has evolved over the past quarter century.)
It is unfortunate that Heinberg’s terms seem harsh, but as a young person who is already concerned with limits to growth, he clarifies that the time is now for an era of qualitative development rather than quantitative growth. The End of Growth appropriately invokes fear and a sense of irreversible urgency but it is all in the cause of productive change towards a more buoyant and adaptable economy.
The new documentary “The Economics of Happiness” draws attention to the ills of globalization in both the developing and developed world, and features a number of friends of Capital Institute, including Juliet Schor and Bill McKibben. The director, Helena Norberg-Hodge, a champion of the localization movement, is the founder and director of the International Society for Ecology and Culture. The film’s pro-localization message is a welcome counterpoint to the pro-globalization mantra we hear from most policymakers these days. However, the well-intentioned “relocalization” strategies that Norberg-Hodge highlights and promotes in this film are likely to provide neither the most effective nor the most realistic solutions in a world increasingly driven by the forces of globalism.
Juliet Schor, a Professor of Sociology at Boston College, writes and lectures on the connections between consumerism, work life, and environmental sustainability. She is a founding board member of the Center for a New American Dream and author of the best-seller The Overworked American: the Unexpected Decline of Leisure, of The Overspent American: Why We Want What We Don’t Need, and Born to Buy: The Commercialized Child and the New Consumer Culture.
We spoke with Schor about her new book Plenitude: The New Economics of True Wealth (published as True Wealth in paperback), in which she questions the conventional wisdom that maximizing income and growth is the path to well-being.
“Mismeasuring our Lives: Why GDP Doesn’t Add Up,” a panel discussion held at Columbia University on December 7, brought four distinguished economists together for an open conversation that began with the need for policymakers to look beyond GDP as a standard economic measure to address both ecological constraints and human well-being but moved to the central challenge of our time: can economies continue to grow without degrading the ecosystem and if not, what are the alternatives?
Sponsored by the public policy research and advocacy organization Demos, the event featured panelists Alan B. Krueger, most recently the US Treasury's Chief Economist and currently Bendheim Professor of Economics and Public Affairs at Princeton University; Glenn-Marie Lange, Senior Environmental Economist at the World Bank; Juliet B. Schor, Professor of Sociology, Boston College; and Joseph Stiglitz, Nobel Laureate and Co-Chair of the Committee on Global Thought at Columbia University.
CASSE Issues Enough is Enough: Ideas for a Sustainable Economy in a World of Finite Resources - A Report from the First Steady State Economy Conference
The Center for the Advancement of the Steady State Economy (CASSE) held its first conference, in Leeds, UK, on June 19, 2010, with a focus on finding alternatives to current models of economic growth. Featuring members of the Capital Lab-sponsored 3rd Millennium Economy steering committee Tim Jackson and Peter Victor, the conference brought economists, scientists, business leaders, government officials and the NGO community together to help mold the vision of a steady state economy.
While most global leaders and economists extol the virtues of unfettered economic growth, conference speakers made the point that the economy is a subsystem of the earth’s ecosystem and is a human construct. Despite these known facts and the recent global financial meltdown, exponential economic growth continues to be almost universally perceived as a desirable outcome.