This blog was originally started with the intent of having something of an environmentalist focus. Unfortunately, I immediately began finding environmentalists both smelly, and stupid. Okay, not smelly, but possibly stupid. Reports like this from the nef (new economics forum) declare that growth isn’t possible, or that it is incapable of producing real term increases in wellbeing. Both are simply false, both historically and in terms of our future prospects. First of all, they compare economic growth to the growth of a hamster. It makes me want to cheese grate my face, take a look:
Argh! Hamsters grow by converting more input, food, into more output, size, at least until adulthood. They stop growing when they reach their optimal size. They, like all animals begin to suffer from diminishing returns and stop growing at some point. Human beings are unique in that they can generate more output, food or televisions, from fewer inputs. I have some graphs to prove this, courtesy of J Bradford DeLong. Below is a graph showing human population, world value added, and world value added per person alive.
Look at those lines! Look at them! Those are log scales so you are seeing truly phenomenal growth rates for recent years, and a reasonable clip for earlier episodes of growth. Some in the green movement seem to argue that somewhere in the last few millimeters of those graphs that something unsustainable has happened, that something has snapped.
I don’t buy it. What I see in those graphs is that growth is natural. Their hamster analogy is utterly incorrect, human beings have always chased after growth and our number, wealth, wellbeing, has been increasing for a phenomenal length of time. In fact, I would agree with Eric Jones; what we see is growth recurring. The natural state of human existence is growth.
For most of human history we have seen extensive growth, growth which is exhibited in stagnant living standards and expanding living standards. The bottom graph shows that the last 200 years have seen intensive and extensive growth, humans have continued to expand their number, but our standard of living has continued to improve.
Growth is a natural state for human beings, when not restrained we seek better ways of doing things, we experiment, fail and succeed and adopt best practice methods. If that results in environmental damage the solution is not to suppress a natural progress but to make those causing damage pay for it, so they direct their will to growth to more intendedly productive and less accidentally destructive ends.
Societies that have barely grown, like Mao’s China or the Soviet Union, still saw tremendous environmental degradation. The Aral Sea has been drained of millions of litres of water through the middle of the 20th century, causing almost immeasurable suffering. Millions of bird were killed on Mao’s orders leading to an explosion of insects which damaged crops and wold plants in the 1960s.
Growth is not the problem, any large society (human or animal) which does not place a value on its natural resources will deplete them faster than makes sense. That is why hamsters don’t keep growing, they are limited by their natural resources because they cannot control themselves. Humans can control themselves, they can price natural resources and if we do that, then even a growing society can ensure ample natural resources.
The nef also argue that growth is no longer capable of reducing poverty. That is bullshit. There is no polite way of putting it. Below is a graph of global poverty taken from Sala-I-Martin‘s recent work.
That isn’t redistribution which has done that, it is an increase in the productive power of rural poor in China and India. They have moved from low productivity agricultural work to slightly (and sometimes much) higher productivity work in manufacturing and services. Redistribution is not an efficient way to eliminate that poverty which remains, there is little point in giving a $300 annual stipend to a subsistence farmer. The poor need to adopt modern productive methods and the international division of labour and trade. That will offer far more security, solidarity and autonomy than any fickle redistribution of income.
Growth is limited. If today’s global growth continues forever we eventually come up against the limits of entropy, if we want to create more order by arranging matter in a way useful to humans we have to create more disorder elsewhere. The nef argue that this means that human civilisation necessarily creates a mirror image of destruction in the natural world.
This massively underestimates how much energy exists in the world around us, and overestimates how much order human beings have created. Humans annually consume 15 terawatts of power. About 18 terawatts of power hit the earth every second from the sun in the form of electromagnetic radiation. We’re still, astronomically speaking, small fry. Although we’re capable of influencing our atmosphere, when it comes to entropic limits to growth, we’re far from hitting out limits.
My argument is not that growth is always a priori beneficial or desired.
But I would argue that left to our own desires, even without impetus from debt obligations, shareholder value maximisation or neoliberal economics, people will still seek out more efficient ways of organising production and that will produce a combination of more economic growth and an increase in leisure. I want the world to improve its productivity to the point at which a four day week/three day weekend becomes socially acceptable in the same way that five day weeks/two day weekends are now socially acceptable. Only in a richer world will that happen, and that richer world is not necessarily one in which the environment is ravaged or humanity torn asunder.
Unfortunately, the human ingenuity that will get us there seems more likely to come up against the arbitrary limits of humanity before we hit any limits of the physical world.
Filed under: Economics, History, Politics, Science