The End of Growth: Adapting to Our New Economic Reality (43 page)

In 1972, economists William Nordhaus and James Tobin published a paper with the intriguing title,
Is Growth Obsolete?
, in which they introduced the Measure of Economic Welfare (MEW) as the first alternative index of economic progress.
⁵⁷

Herman Daly, John Cobb, and Clifford Cobb refined MEW in their Index of Sustainable Economic Welfare (ISEW), introduced in 1989, which is roughly defined by the following formula:

ISEW = personal consumption + public non-defensive expenditures - private defensive expenditures + capital formation + services from domestic labor - costs of environmental degradation - depreciation of natural capital

In 1995, the San Francisco-based nonprofit think tank Redefining Progress took MEW and ISEW even further with its Genuine Progress Indicator (GPI).
⁵⁸
This index adjusts not only for environmental damage and depreciation, but also income distribution, housework, volunteering, crime, changes in leisure time, and the life-span of consumer durables and public infrastructures.
⁵⁹
GPI managed to gain somewhat more traction than either MEW or ISEW, and came to be used by the scientific community and many governmental organizations globally. For example, the state of Maryland is now using GPI for planning and assessment.
⁶⁰

During the past few years, criticism of GDP has grown among mainstream economists and government leaders. In 2008, French president Nicholas Sarkozy convened “The Commission on the Measurement of Economic Performance and Social Progress” (CMEPSP), chaired by acclaimed American economist Joseph Stiglitz. The commission’s explicit purpose was “to identify the limits of GDP as an indicator of economic performance and social progress.” The commission report noted:

What we measure affects what we do; and if our measurements are flawed, decisions may be distorted. Choices between promoting GDP and protecting the environment may be false choices, once environmental degradation is appropriately included in our measurement of economic performance. So too, we often draw inferences about what are good policies by looking at what policies have promoted economic growth; but if our metrics of performance are flawed, so too may be the inferences that we draw.
⁶¹

In response to the Stiglitz Commission there have been increasing calls for a Green National Product that would indicate if economic activities benefit or harm the economy and human well-being, addressing both the sustainability and health of the planet and its inhabitants.
⁶²

One factor that is increasingly being cited as an important economic indicator is
happiness
. After all, what good is increased production and consumption if the result isn’t increased human satisfaction? Until fairly recently, the subject of happiness was mostly avoided by economists for lack of good ways to measure it; however, in recent years, “happiness economists” have found ways to combine subjective surveys with objective data (on lifespan, income, and education) to yield data with consistent patterns, making a national happiness index a practical reality.

In
The Politics of Happiness
, former Harvard University president Derek Bok traces the history of the relationship between economic growth and happiness in America.
⁶³
During the past 35 years, per capita income has grown almost 60 percent, the average new home has become 50 percent larger, the number of cars has ballooned by 120 million, and the proportion of families owning personal computers has gone from zero to 80 percent. But the percentage of Americans describing themselves as either “very happy” or “pretty happy” has remained virtually constant, having peaked in the 1950s. The economic treadmill is continually speeding up due to growth and we have to push ourselves ever harder to keep up, yet we’re no happier as a result.

Ironically, perhaps, this realization dawned first not in America, but in the tiny Himalayan kingdom of Bhutan. In 1972, shortly after ascending to the throne at the age of 16, Bhutan’s King Jigme Singye Wangchuck used the phrase “Gross National Happiness” to signal his commitment to building an economy that would serve his country’s Buddhist-influenced culture. Though this was a somewhat offhand remark, it was taken seriously and continues to reverberate. Soon the Centre for Bhutan Studies, under the leadership of Karma Ura, set out to develop a survey instrument to measure the Bhutanese people’s general sense of well-being.

Ura collaborated with Canadian health epidemiologist Michael Pennock to develop Gross National Happiness (GNH) measures across nine domains:

• Time use

• Living standards

• Good governance

• Psychological well-being

• Community vitality

• Culture

• Health

• Education

• Ecology

Bhutan’s efforts to boost GNH have led to the banning of plastic bags and re-introduction of meditation into schools, as well as a “go-slow” approach toward the standard development path of big loans and costly infrastructure projects.

The country’s path-breaking effort to make growth humanly meaningful has drawn considerable attention elsewhere: Harvard Medical School has released a series of happiness studies, while British Prime Minister David Cameron has announced the UK’s intention to begin tracking well-being along with GDP.
⁶⁴
Sustainable Seattle is launching a Happiness Initiative and intends to conduct a city-wide well-being survey.
⁶⁵
And Thailand, following the military coup of 2006, instituted a happiness index and now releases monthly GNH data.
⁶⁶

Michael Pennock now uses what he calls a “de-Bhutanized” version of GNH in his work in Victoria, British Columbia. Meanwhile, Ura and Pennock have collaborated further to develop policy assessment tools to forecast the potential implications of projects or programs for national happiness.
⁶⁷

Britain’s New Economics Foundation publishes a “Happy Planet Index,” which “shows that it is possible for a nation to have high well-being with a low ecological footprint.”
⁶⁸
And a new documentary film called “The Economics of Happiness” argues that GNH is best served by localizing economics, politics, and culture.
⁶⁹

No doubt, whatever index is generally settled upon to replace GDP, it will be more complicated. But simplicity isn’t always an advantage, and the additional effort required to track factors like collective psychological well-being, quality of governance, and environmental integrity would be well spent even if it succeeded only in shining a spotlight of public awareness and concern in these areas. But at this moment in history, as GDP growth becomes an unachievable goal, it is especially important that societies re-examine their aims and measures. If we aim for what is no longer possible, we will achieve only delusion and frustration. But if we aim for genuinely worthwhile goals that
can
be attained, then even if we have less energy at our command and fewer material goods available, we might nevertheless still increase our satisfaction in life.

Policy makers take note: Governments that choose to measure happiness and that aim to increase it in ways that don’t involve increased consumption can still show success, while those that stick to GDP growth as their primary measure of national well-being will be forced to find increasingly inventive ways to explain their failure to very
un
happy voters.

Our Problems Are Resolvable In Principle

We’ve just seen how the economy could be put on the right track. But sorting out the economy is not enough to save the world; that would be just the first step.

The world’s environmental dilemmas are likewise amenable to resolution, at least in principle. As support for that statement one can point to piles of “how-to-save-the-world” environmental articles and books — in fact I can point to
literal
piles of such books here in my little home office. Which suggests a way to approach writing this section of the book: rather than painstakingly assembling a balanced overview of an immense and wide-ranging literature, perhaps all that’s really needed is for me to look around and grab a few titles off the shelves.

The first one that comes to hand is Lester Brown’s
Plan B 4.0: Mobilizing
to Save Civilization
.
⁷⁰
In some ways we need go no further: Brown has provided a masterful overview of the world’s 21st-century threats (oil and food security, rising temperatures and rising seas, water shortages, etc.) and the ways to contain or overcome them — by eradicating poverty, conserving resources, reforming the world’s food system, raising energy efficiency, and developing renewable energy. There it is, folks: that’s all you need to know. Just go out and do it. (Brown’s very latest book,
World on the
Edge: How to Prevent Environmental and Economic Collapse
, which I didn’t have at the time of this writing, appears to be an updated and improved version of
Plan B
.)
⁷¹

Ah, but how could we stop with just one book? Next in the stack is one I couldn’t resist: my own largely neglected previous volume,
The Oil
Depletion Protocol: A Plan to Avert Oil Wars, Terrorism and Economic Collapse
. It outlines a simple framework for guiding world policy regarding oil — and, in principle, all other non-renewable natural resources. Since we know that we cannot continue increasing rates of extraction forever, it makes sense to conserve such resources by deliberately reducing extraction rates now. If we did this in a coordinated way, we could keep resource prices from fluctuating destructively, reduce the incentive for nations to compete for dwindling supplies, and help jumpstart the inevitable transition to renewable alternatives.
⁷²
What’s not to like about that?

A third book that comes easily to hand is Albert Bates’s
The Biochar
Solution: Carbon Farming and Climate Change
. Bates has long been a prophet regarding climate change and is a veteran organic farmer; in this book he provides an excellent overview of a widely-researched technique for removing carbon from the atmosphere while building soil — a win-win solution if ever there was one.
⁷³

But wait — there are some problems we haven’t addressed. How about transportation in an oil-constrained future? Take a look at
Transport Revolutions:
Moving People and Freight Without Oil
, by Richard Gilbert and Anthony Perl, or
An American Citizen’s Guide to an Oil-Free Economy
by Alan Drake, a veteran proponent of rails as being far more efficient than highways.
⁷⁴
The problem of overpopulation must be mentioned again here — but we have already discussed the admirable and effective work of Population Media Center in Chapter 5; for more on solutions, see Bill Ryerson’s chapter “Population: The Multiplier of Everything Else” in
The
Post Carbon Reader
.
⁷⁵
Conflict resolution methods and new governance models are covered in Roy Morrison’s
Ecological Democracy
.
⁷⁶
And the crisis in biodiversity is addressed an article in a recent issue of
Solutions
magazine — “Facing Extinction: Nine Steps to Save Biodiversity,” by Joe Roman, Paul Ehrlich, et al.
⁷⁷
The looming crisis in the world’s food systems is tackled in a report I co-wrote with Mike Bomford a couple of years ago, “The Food and Farming Transition.”
⁷⁸

I could keep going. The list of critical problems facing civilization is nearly endless, but each one of those problems has been addressed with proposals and model projects aimed at mitigating it. These are the tools we want to have lying around as crisis hits, though they’ll only be useful if we actually pick them up and learn to wield them.

This chapter began with a rather dark “Default Scenario,” yet we went on to see that there are solutions to the economic problem it portrayed; moreover, as we’ve just noted, there are potential answers to all our other critical problems as well. If civilization fails, it won’t be for a lack of good ideas. Some of these have been around since the 1970s — a few since the 1870s. Which brings up the question: Why, if so many solutions are available, does my “default scenario” for the future look so dreary?

Perhaps the suggestion that “Our problems are resolvable in principle” needs to be followed by an “if ” clause and a “but” clause.

The “if ” clause:
If we are willing to change our way of life and the fundamental
structures of society
. Many people assume that solving our problems means being able to continue doing what we are doing now. Yet it is what we are doing now that is creating our problems. Every “solution” mentioned above comes at a cost in terms of fundamental changes in individual and societal behaviors and priorities.

The “but” clause:
But our society as a whole is not inclined to do what is
required to solve them, even if the consequences of failing to do so are utterly
apocalyptic
. This statement seems bizarre on its face. Who would prefer to see economic collapse, the exhaustion of precious natural resources, the disappearance of millions of species, the failure of food systems — and resulting misery and death for millions upon millions of humans? Well, no one, if we put it that way. Yet the choices are not always so clear-cut, and we humans are hard- and soft-wired with genetic and psychological programming that can make it very difficult for us to undertake costly short-term behavioral change in order to avert future catastrophe.
⁷⁹