Addiction to Growth Economics

Excerpt from Montreal Gazette via Canada.com, 10 February 2008

'Picture a drunk so far gone that he's bent on drinking himself sober.

It's much like the behaviour of governments and central banks in Canada and the U.S. in the face of a looming North American recession, suggests Robert Costanza.

In response to an economic downturn caused by excesses of debt run up in pursuit of over-consumption, the banks have slashed interest rates and governments have cut sales taxes and offered tax rebates in hopes that people will spend more on stuff and services and thereby boost the economy back to full-throttle growth. Heaven forbid they should invest it in savings; it would be the ruination of the whole scheme.

"It's crazy, insanity," said Costanza, who is director of the Gund Institute for Ecological Economics at the University of Vermont. "Insanity means doing the same things and expecting a different result."

It would seem not the best of times to be pushing the cause of ecological economics, of which Costanza is a prime mover.

He and his eco-economist cohorts preach against the classic doctrine of the dismal science. It disputes the long-standing assumption that the measure of a nation's economic health and well-being of its society is a steadily growing gross national product. They argue that traditional economic accounting doesn't factor in the cost of resource depletion and environmental damage involved in sustaining a perpetually burgeoning GNP.

In other words, the production of ever more "goods" is actually not a good thing. At worst, it's said, it could ultimately lead to the end of the world as we know it

One of those saying it is Richard Heinberg, whose book Peak Everything is a recent addition to the growing bookshelf of eco-economic treatises: "We in the industrial world have gradually accustomed ourselves to a way of life that appears to be leading toward a universal biological holocaust. The question is, shall we choose to gradually accustom ourselves to another way of life - one that more successfully integrates human purpose with ecological imperatives - or shall we cling to our present choices to the bitter end?"

And yet the measures invoked by authorities in response to the recent economic turbulence are depressingly old school, and precisely the kind of thing that's driving us toward a bitter end, said Costanza.

He maintains that the general quality of life hasn't significantly improved over recent decades of GNP growth during which only the relatively few really rich got a whole lot richer and the rich-poor gap steadily widened.

"In that sense, you could argue we've been in a recession since 1975 in terms of real quality of life and real general welfare. What we need is a quality of life stimulus package, not an economic growth stimulus package."...

"What we're getting is, let's spend more, let's get more money back to people so they can spend it to buy more stuff, stuff that in a lot of cases they don't really need," said Costanza.

Ecological economists readily admit that they have no instant solutions to offer and generally agree that the transition to an economy in sustainable harmony with the environment would have to be a gradual process involving profound changes in public attitudes as well as government policies and industry standards.

What frustrates them is that the current economic reflex is to go for the quick conventional fix: pump up the economy by getting people to buy more stuff. At times like this, environmental considerations tend to get shorter shrift, said Kent Gustafson, a Nova Scotia environmental consultant and president of the Canadian Society for Environmental Economics.

"When times get tough, people tend to get more short-sighted and take a conservative approach. In good times, when people have money, they're more inclined to environmental protection. When things go bad, that traditionally goes by the wayside."

The temptation to inject a faltering economy with a shot of conventional growth stimulant is hard to resist, said York University economist Peter Victor, another contributor to the eco-economics library with a new book called Managing Without Growth.

"It's a bit like a drug addict who needs a fix. The short-term problem for drug addicts is they need more of what they're addicted to, even though it's what's killing them in the long run. But it's hard to hold it back from them because it's the obvious short-term cure.

"We do have to attend to the short-term crises because people's lives are really hurt by these downturns. But it's also reasonable to say that fixing them through the traditional measures of just stimulating more economic growth is going to exacerbate other problems which might be even more difficult to solve in the future."...

Gustafson says he finds that the eco-economic message is getting across, however gradually, both with governments and the greater public. He notes that federal and provincial environment departments are strongly represented at his society's conferences and that the bulk of his professional work consists of pure ecological economic consulting for governments.

"I find people are getting away from consumption for consumption's sake and looking more to the quality of what they're consuming. We've made strong inroads into natural resources and environment departments, and we're seeing an ever-increasing demand for our services."
He and others of the ecological economics school suggest that an economic downturn could actually be helpful to the movement if it serves as a wake-up call that the system in its present configuration is broke and needs a different kind of fixing than has traditionally been administered.

"On the bright side, often it takes a major shakeup like this before alternatives really get full consideration," said Costanza.

"I don't want to have another Great Depression, but if we can learn from more minor shocks to move the system to a more sustainable form, then so much the better. The best-case scenario would be a period of mild disruption where there's enough disruption for people to see that things are really not working and that it could all fall apart."

Even so, what change there is in the direction of ecological economic policy and action is painfully slow in coming, said Victor.

"There are lots of good ideas around, but the speed at which they're picked up and acted on is depressingly slow..."'