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The global financial crisis, climate change, poverty and BP: the extent of the problem is clear. But what is the best way to solve it? This was the question asked at the first Steady State Economy Conference held in Leeds on June 19.
The conference was organised by Economic Justice for All (EJfA), a Leeds economics and sustainability debating group and the Center for the Advancement of the Steady State Economy (CASSE), with the aim of coming up with some concrete policy recommendations.
“If the leaders of the main political parties in the UK are not thinking seriously about an alternative to economic growth, then we the people must urgently start and develop the discussion,” Dr Lorna Arblaster, of EJfA, explained.
It was a discussion that was urgently needed. The conference attracted over 250 academics, economists, community organisations, activists, NGOs and business people who played as much a part in making the day a resounding success as the keynote speakers: Peter Victor, author of Managing Without Growth and Professor in environmental studies, York University, Canada; Andrew Simms, Policy Director at nef; Dan O’Neill, European Director of CASSE; and Tim Jackson, author of Prosperity Without Growth and professor of sustainable development, University of Surrey.
Peter Victor opened the conference by challenging our “fear of a no growth disaster” and reminding us that until 1950 there was no discussion of economic growth as something to strive for.
“Can we have full employment, no poverty, fiscal balance, and reduced greenhouse gas emissions without relying on economic growth?” he asked. “You bet!” was his resounding reply, which he backed up with a detailed computer model.
Participants were then asked to put forward alternative policy recommendations in expert-led workshops on how this could be done in the UK.
These included eight policy-focused workshops: limiting resource use; stabilising population; reforming the monetary system; maintaining low unemployment; distributing income more fairly; changing business practices; measuring quality of life and achieving a successful UK transition within a globalised economy, as well as two process workshops: changing consumer behaviour and engaging politicians and the media.
Well-being and work-life balance were key themes of the day as was reconnecting with ourselves, reconsidering what it means to be human and deciding what we really want from our lives. And as Andrew Simms reminded us, not forgetting to have fun.
The conference was just the start. The ideas and proposals which were discussed in the workshops will be collated into a manifesto, which will outline how to achieve a steady state economy in the UK and will form the basis for the movement’s next step.
So what of Leeds now that the steady state caravan has left? There’s a buzz in the city; people who missed the conference feel that they’ve lost out and others who had never heard of a steady state economy have seen the local media coverage. With all the crises and government cuts they may even be starting to question whether there is another, better way.
Saamah Abdallah is a researcher at nef‘s Centre for Well-being.
It’s been rumbling for almost three years and it may well still rumble on for a little longer, but a little volcano may soon erupt in the tiny nation of… well, Luxembourg. The European Statistics Agency Eurostat last week declared public the outputs of a project we and others have been carrying out for them for two years on how to measure the well-being of people in Europe. The project will form the basis of a new set of well-being indicators to be published by Eurostat on a regular basis, alongside drier indicators on R&D expenditure, fishing boat stocks and, of course, GDP.
This might not seem like a volcano, but it could potentially be a huge fillip to the case for measuring progress differently – Eurostat have the resources and wherewithal to collect robust regular data across Europe. Collecting data obviously won’t change the world alone, but it’s a prerequisite to actually using data, and to supporting well-being as a public policy goal.
Over the next few months, Eurostat will be busying itself making sure well-being data meets their demanding standards and, implementing changes in conjunction with other parts of the European apparatus, member states and survey teams. A geeky success, but an important one nevertheless…
I can’t recall the last time I’ve seen a pure blue sky without the tapestry of contrails that sketch out the invisible highways of the global aviation network.
The reality of the closed airspace due to the volcanic plume from an eruption near the Icelandic glacier Eyjafjallajoekull (pronounced aya-feeyapla-yurkul) hit me whilst strolling back along the Southbank on a warm spring Sunday afternoon. As I walked along the river, the world seemed strangely calm. The overhead roar of jet engines from aircraft as they march with military precession along the flight path to Heathrow, were conspicuous by their absence.
But, such events also reveal that we are hugely dependent on what often seems like hidden infrastructure, woven together to create an intricate web of interdependence across the globe.
We agree that when making policy, a broad account of flourishing — including autonomy, meaningful activities and strong relationships — is more useful than a narrow focus on happiness, which risks denoting merely momentary or passing pleasures (“The end of government”, leading article, Mar 27). But given the wide range of influences on our experiences of life, government policy — however it is shaped — will inescapably affect our wellbeing, for good or for ill.
This is very far from “forcing people to be happy”. The findings of an established body of research suggest that current policy, focused beyond all else on stimulating economic growth, crowds out from daily life the activities known to lead to wellbeing: connecting with others, learning new skills or giving our time.
Gauging government success, according to National Accounts of Well-being, would provide the incentives to create policy firmly focused on improving the lives of UK citizens. Our research, first published last year, shows how wellbeing, understood as a multifaceted, dynamic concept, could be robustly and systematically measured.
The inventors of gross domestic product (GDP) never intended it to become the compass that guides all policymaking. Today’s environmental crisis makes the shortcomings of GDP all too clear: it rises when forests are cut down or when money is spent cleaning up an oil slick. With both our natural and social support systems being pushed to breaking point, finding a better measure of progress has never been more urgent.
Juliet Michaelson and Saamah Abdallah
Centre for Wellbeing
nef (the new economics foundation)
The notion that growth cannot continue indefinitely is still a young idea. Yes, it’s been around since the 70s, with the book The Limits to Growth. But it’s had little resources to really develop answers to the challenge of how to achieve a successful economy that does not depend on growth. Duncan Green, Head of Research at Oxfam GB, has written a blog criticising a recent event on Rethinking economic growth (also see my blog on it) which nef supported last month. He obviously agrees with the alarm call (that growth is not sustainable) – you can see that in his presentation of his to the Quakers Zero Growth Economy conference last year. But Duncan seems to expect solutions to these problems already and was disappointed at the scarcity of them at this event.
I shan’t attempt to stand up for all the speakers, but I would suggest that two of their publications at least (Tim Jackson’s Prosperity without Growth and nef’s Great Transition) do start to touch on some of the solutions to what is very admittedly a difficult problem. André Reichel’s suggestions for companies that do not require constant throughput of material production were also real practical solutions. Here are three parts of the solution. Just three:
- Steadily reducing working hours. Increases in labour productivity have typically meant that economic growth is required to keep steady employment. If productivity gains were taken as more free time, this would resolve this challenge. Take a look at our new report, 21 hours.
- Re-structured ownership. An economy dominated by shareholders who only take a stake in firms so as to make a quick profit is driven relentlessly to growth (see the work of Mathias Binswanger on this). It doesn’t have to be like this. Many forms of ownership, including small family businesses, co-operatives, communities, and the state, are not predicated on ever increasing returns on investment.
- Re-focussing measurement. Of course I mention that partly because at the centre for well-being we’ve been working on alternative measures of progress such as the Happy Planet Index and how they might help shift us away from the folly of the constant pursuit of growth. But also, Duncan himself has highlighted this as a key part of the shift away from a growth focussed economy.
Of course, these three solutions alone won’t solve all the world’s problems, and of course there are many interests who would oppose such changes, but they’re a start. More research is needed to better understand how a no-growth economy would work. And more advocacy is needed to promote the ideas around a stable economy. But until recently, this is not been something that big money was likely to get behind. However, things are beginning to change and there are signs of some forward thinking governments starting to invest in exploring alternatives to growth. Maybe then we’ll be able to have a few more answers for the man from Oxfam.
“Economic growth cannot continue as before”. “We need to consider the possibilities of de-growth”. These were some of the concluding remarks at the Growth in Transition conference held in Vienna last week. The kind of thing you hear radical economists and think tanks saying more and more nowadays. But here the context was a very different. A conference organised by the environment ministry of a European nation (Austria), and sponsored and supported by seven other ministries including the Federal Chancellery, and the Federal Ministry for Finance, the nation’s leading banks, main supermarket chain and the Chamber of Commerce.
The event was perhaps the first time that such a broad spectrum of mainstream bodies have agreed to confront the challenge of our times – how to transform our growth-hungry economy into something more sustainable, stable and socially just. Of course, not everyone jumped at the solution of doing without growth – and the rhetoric of ‘green growth’ continued to be bandied about. But in plenary on the morning of the second day, over 40 minutes, Professor Felix Ekardt of the University of Rostock drilled home the message that such green growth was not enough – that we needed to stop growing. You could almost hear the audience wincing.
It’s clear that this is a message which will take some time to sink home. A representative of the Austrian National Bank spoke excellently on the need to shrink the financial system, reduce inequalities and reduce debt. But she quickly, and without much discussion, expressed the faith that economic growth could be decoupled from resource use. I approached her later and highlighted that, allowing for ‘business-as-usual’ economic growth, this would require a 95% increase in resource efficiency by 2050 (as nef has recently calculated in the report Growth isn’t Possible). When I asked her whether we can really gamble humanity’s fate on the ability to achieve such efficiency gains, she did something quite unusual. She squirmed. It was only momentary, and was soon followed up by a repetition of the same mantra of efficiency. However, I have hope for her.
Like a patient waiting for hospital scan results, this week the government nervously anticipates new growth figures for the economy. Any sign of an increase and relief could quickly lead to self-satisfaction about its handling of the recession. Approving nods may be seen later this week in Davos at the World Economic Forum. Why? Because among political and business classes, growth, measured by rising GDP, is considered always a “good thing”. But is it?
The banking crisis taught us that when things look good on paper, if the underlying accounting system is faulty, it can conceal high risk and imminent disaster – as Jared Diamond put it in Collapse, his book about societies throughout history that fell by wrongly estimating the resilience of their environmental life-support systems. What looks like wealth might just be a one-off fire sale of irreplaceable natural capital. Ecologically speaking, he writes, “an impressive-looking bank account may conceal a negative cashflow”.
To avoid collapse the economy has to operate within thresholds that do not critically undermine the things that we depend on on a daily basis. They’re often interconnected, like a sufficiently stable climate, productive farmland, fresh water and a healthy diversity of plants and animals.
On climate change, a new piece of research by the New Economics Foundation thinktank looks at which rates of global economic growth are compatible with prevention of a dangerous level of warming.
It shows that, even with the most optimistic likely uptake of low-carbon energy, it is seemingly impossible to reconcile a growing global economy with a good likelihood of limiting global temperature rise to 2C, the agreed political objective of the European Union, and widely considered the maximum rise to which humanity can adapt without serious difficulty.
In this context, Adair Turner, chair of the Financial Services Authority and the Committee on Climate Change, refers to the pursuit of growth for its own sake as a “false god“. Other work by Professor Kevin Anderson of the Tyndall Centre for Climate Change Research at Manchester University concludes that: “Economic growth in the OECD cannot be reconciled with a 2C, 3C or even 4C characterisation of dangerous climate change.”
The problem is that growth drowns out the gains from increased efficiency and technological innovation. The New Economics Foundation study looks at by how much growth would need to be delinked from fossil fuels – the so-called carbon intensity of the economy – to reach the mark of climate safety suggested by Nasa climate scientist James Hansen.
Having improved steadily in the late last century, “carbon intensity” changes flatlined over the last decade and even worsened in some years. Against this trend, to avoid dangerous climate change the fall in carbon intensity would need to improve by more than two hundredfold. The economic doctrine of growth collides headlong with the laws of physics and thermodynamics. Only so much energy efficiency can be squeezed from a system. The other problem is the counter-intuitive rebound effect spotted by William Stanley Jevons in 1865 when he wrote, “It is a confusion of ideas to suppose that the economical use of fuel is equivalent to diminished consumption. The very contrary is the truth.” Increased efficiency tends to lower costs and perversely drives up overall resource use.
Writing in the science journal Nature last year, a multidisciplinary group of scientists identified nine key safe-use planetary resource boundaries, three of which had already been transgressed (climate change, biodiversity and the nitrogen cycle to do with farming). We are on the cusp of several others.
So, this week, if you find yourself cheering a return to growth, you may be inadvertently celebrating our acceleration toward an ecological cliff edge and an opportunity missed to find a new, better direction. For example, the economist Herman Daly points out that full employment could be easier to achieve in an economy not addicted to growth because it would reverse “the historical trend of replacing labour with machines and inanimate energy”.
Both the desirability and possibility of never ending growth goes unquestioned in mainstream economics. It’s odd, because the world would be a very strange place if the same was applied in nature. For example, from birth until around six weeks old, a hamster doubles its weight each week. If, it didn’t stop and continued doubling each week, on its first birthday, you would be looking after a very hungry nine billion-tonne pet hamster. There is of course one thing in nature that grows uncontrollably. It’s called cancer and tends to kill its host. So when those growth figures come out, let’s hope the government scans the results for what they really mean.
nef‘s new report Growth isn’t Possible was published today.
2010 looks set to be a key year for well-being. Just over ten years ago, whilst well-being made sense in the scientific community, it was still almost unheard of amongst policy-makers. Since then, however, we’ve had policy documents recognising the importance of well-being from many departments from Defra to the Treasury. The end of 2009 saw two other think tanks, Demos and the Young Foundation, using the language of well-being. The Department of Health’s New Horizons strategy boldly puts well-being at the heart of mental health. nef act as secretariat for the all-party parliamentary group on well-being, the UK government is set to fund a major new centre for well-being research, and the Office of National Statistics is starting to explore how they can measure well-being. Meanwhile, whilst the Chinese welcome the year of the tiger, the City of Liverpool has declared 2010 the ‘year of health and wellbeing’.
However, to paraphrase the wise words of Yazz, given the concept’s earlier obscurity, ‘the only way was up’. Ten years on and well-being is no longer seen as a cute side-policy, and is becoming an issue for heated discussion. Some writing in the national media suggest a backlash. Some people read well-being as simply happiness and therefore consider it hedonistic and silly. Or there is a fear that encouraging people to be happy may just be a way to silence the masses without actually improving their lives. Or there are concerns over whether it can genuinely be measured. Or a feeling that affecting people’s emotions should not be within governments’ remit.
Some of these concerns are easily dismissed. We know that well-being can be measured robustly and meaningfully (see, for example, last year’s National Accounts of Well-Being, and the New Scientist). Also, as the National Accounts of Well-being stress, well-being is not just about happiness or satisfaction. It is a dynamic and multi-dimensional concept embracing, amongst other things, our social relations, vitality, and sense of meaning. Seeing Government’s role as supporting well-being for everyone does not imply a belief that government should keep everyone happy all the time. Being upset because you have failed a job interview is natural and healthy. It is when this then leads to long-term depression, or when our lives are defined by our job interviews, that we need to worry.
Worthy of more thought is the response that, even if well-being is important, and we can measure it, government should not be meddling with our well-being. This is where the science of well-being needs to mature into a politics of well-being. It would indeed be unsavoury for the government to be making people happy, especially if this is solely through positive psychology tricks that ignore root causes of low well-being, such as inequality and bad jobs. But in the same way that their current focus on economic growth does not lead to governments forcing us to get rich, a focus on well-being would not lead to forced happiness. Rather it would just mean that, in making a policy decision, government would give greatest weight to likely impacts on well-being (in all its multi-dimensionality), rather than just its impacts on GDP – which is what tends to happen. For example, a reduction in working hours is considered crazy as it would lead to reduced economic activity. However, if it were seen to lead to observable improvements in well-being, even despite reducing our national income, isn’t it actually a good idea? To be able to make such decisions, government needs an evidence base on how policies impact well-being. Growing this evidence base is the challenge for 2010, and nef’s forthcoming work will be a key step on this path. Watch this space.
Writing on the Guardian’s Comment is Free website, Catherine Bennett is unconvinced that “it is the state’s business to meet those psychological needs” that the Young Foundation’s recent research has highlighted. She suggests that “since no nice person would want to set their face against general wellbeing”, using well-being as a political goal is utterly devoid of meaning. This inadvertently raises a crucial question: what is the overall goal of politics?
Economic growth is the most common headline measure of political success. Combating problems such as poor mental health or income inequality, although dismissed by Bennett, might also be candidates. In fact none of these pass muster in the role of ultimate outcome for societies. When examined closely, it becomes clear that they are all different means to the end of well-being: enabling people to experience their lives going well. As the economist Andrew Oswald has noted:
People have no innate interest in the money supply, inflation, growth, inequality, unemployment … Economic things matter only in so far as they make people happier.
Aiming for well-being is not about seeking an “immediate surge in collective pleasure”, as Bennett puts it. It is about a life well lived, not short-term happiness or pleasure seeking. What we do is fundamental to how we feel, and research shows that strong connections to other people and engagement in meaningful activities are among the most important determinants of well-being. This understanding informs our work at nef, where we have demonstrated that well-being outcomes can be robustly and systematically measured through a framework of national accounts of well-being.
There is broad public support for well-being being the ultimate political goal. A 2006 poll for the BBC found that 81% of people supported the idea that the government’s prime objective should be the “greatest happiness” rather than the “greatest wealth”. Furthermore, a sense of well-being is itself a means to traditional policy ends, with proven links, for example, to longer life expectancy and improved health outcomes.
Bennett suggests that it would be “surreal” for policy initiatives to aim to improve well-being. But what is truly surreal is that public policy has often been antithetical to well-being – encouraging long work hours and personal debt, and engendering intense competition from tests at primary school onwards. The evidence shows that our current turbo-charged consumption levels are largely driven by competition for status – a zero-sum activity where for every winner there is a loser.
Focusing on social position through material goods leads to the inescapable treadmill of working longer and harder to buy ever more – at the cost both to well-being and the planet. While some less empathetic members of the public may, as Bennett says, “feel quite happy with current levels of brittleness, inequality and mental ill health”, this is cold comfort to those suffering at the sharp end of these problems. And as evidence from epidemiologists Kate Pickett and Richard Wilkinson has highlighted, we all suffer under greater levels of inequality, given its associations with crime, low social capital and a host of other undesirable outcomes. There is a clear role here for policy to discourage the excesses of these damaging behaviours.
Fortunately, the evidence from fields such as behavioural economics and positive psychology also points to what enhances experienced well-being. The “five ways to well-being“, distilled by nef from a 2008 government review of the latest scientific evidence in the field, identify well-being-enhancing activities in everyday life. Current policy, directed towards maximising hours spent in paid employment and failing to value non-market activities, hampers people’s ability to get involved in the sorts of community and voluntary activities that offer some of the best opportunities to connect with others, be physically active, take notice of what’s around us, learn new skills, and give. It is not the state’s business to impose such activities on us. But it does have a clear role in establishing the conditions that allow individuals to maximise their own well-being. This is the true yardstick by which political success should be measured.