Bookmark and ShareAndy Wimbush is nef‘s Communications Officer and blogmaster.

Vince: missing the point on steady-state economics.

The weekend papers reported that Vince Cable is in talks with HM Treasury about becoming Chancellor in the event of a hung parliament. Cable has been widely touted as the most trusted politician in the country, and would most likely to be a progressive choice for Britian’s economy, given his support for policies such as the Post Bank and the Robin Hood Tax.

But would Vince ever take the most radical step of all, and question whether economic growth is really the best compass to guide the progress of nations?

Sadly, it seems not. Speaking at a confrence last week, Cable took a swipe ‘environmentalists who advocate de-growth’. Explaining why environmental issues have slipped down the list of public priorities in recent months, the Shadow Chancellor for the Liberal Democrats said:

well, we’ve got zero growth in fact, we’ve got minus growth and it isn’t very nice. And I think people somehow wised up to this idea that all this puritanical non-consumption of resources we were being told was a good thing is actually really rather painful if you’re one of the people who was losing your job in the process. So recession has played very badly in terms of its environmental impact.

(Thanks to @adanylkiw for the transcript)

I’ll leave aside the rather spurious argument that environmentalists are somehow to blame for current public opinion about climate change as opposed to – oh, I don’t know – lobbyists, misguided media attempts at ‘balance’, anti-science contrarians, political failure in Copenhagen and a freakishly cold winter in the USA and UK. Instead I’ll try to make sense of what he’s saying about the zero growth agenda.

Cable clearly hasn’t bothered engaging with any half-decent argument about steady-state economics. Obviously, anyone who thinks that it’d be a good idea to stay mired in the economic doldrums we’ve experienced over the past eighteen months isn’t worth listening to. But that’s not what environmental economists are saying. Take Peter Victor, author of Managing Without Growth and professor of economics at York University in Canada, who describes the de-growth project as ‘slower by design, not disaster’. Clearly, the downturn experienced as a result of credit crunch and banking crisis was not planned for or deliberately orchestrated. It was a disaster, and that’s why people are experiencing all those things that ‘aren’t very nice’. When you’re riding a bicycle, it makes all the difference whether you come to a halt by breaking gently, or because you skid over black ice and wipe out on the curb.

Like all of us, Vince is concerned about jobs. But the fact that people lose their jobs in recessions caused by the boom-and-bust cycles of capitalism doesn’t mean that a steady-state, zero growth economy can’t support jobs. The pioneering steady-state economist Herman Daly argues that a no-growth economy – properly designed – might find it easier to approach full employment. With lower levels of material throughput and lower levels of fossil fuel energy use, the proportion of human energy input (labour) is likely to increase. Generations of having people made redundant by machines largely powered by coal, oil and gas could be reversed. Daly writes:

There are several reasons for believing that full employment will be easier to attain in a SSE [steady state economy] than in our failing growth economies… the policy of limiting the matter-energy throughput would raise the price of energy and resources relative to the price of labour. This would lead to the substitution of labor for energy in production processes and consumption patterns, thus reversing the historical trend of replacing labour with machines and inanimate energy, whose relative prices have been declining.

It might, however, also be the case that we’d need a more equal distribution of work between those who are currently doing sixty hour weeks or more, and those who are unemployed. That’s what we argued in our recent report 21 Hours and a similar argument is made by Peter Victor, and the Australian economist Robert LaJeunesse in his book Work Time Regulation as a Sustainable Full Employment Strategy.

And let’s not forget that there is such a thing as ‘jobless growth,’ in which the headline figure for GDP rises but new employment is not generated, or environmentally destructive growth in which a kind of false monetary value is created by liquidating irreplaceable natural assets on which livelihoods depend.

It’s not surprising that politicians – even ones as clear-headed, progressive and intelligent as Cable – should baulk at the idea of doing away with growth. Growth has, after all, become synonymous with prosperity, security and happiness. And contrary to what nef‘s detractors might say, we  don’t doubt the benefits that economic growth has brought to people living in wealthy parts of the world, nor the benefits it can still bring to those parts of the world still living in poverty. But in a world of finite resources, we can’t go on pretending that rich nations can continue to grow their economies. We understand that politicians are reluctant to upset the expectations of their electorates, but in the next decade real leadership will mean recognising when enough is enough.

Politicians might take comfort in the fact that there are plenty of ways to prosper and flourish beyond economic growth. Tim Jackson makes the case in his fanastic book Prosperity without Growth and we did the same with National Accounts of Well-being. Bill McKibben, the activist and writer behind, points out in his  new (and curiously spelt) book Eaarth that in 1968 only 30% of Americans were in favour of economic growth. If economic growth can rise to become the overwhelming priority for politicians and voters in the space of a decade, there’s no reason why it can’t fade away just as quickly.