George Monbiot has a striking piece in the Guardian this week, asking how much of the economic growth of the past 60 years is real and how much an illusion created by levels of borrowing that cannot be sustained. Ireland is his exemplar:
“Go to Ireland and you’ll see that even bricks and mortar are a mirage: the marvels of the new economy, built on debt, stand empty and worthless.”
And it’s not only financial borrowing, but also ecological borrowing:
“…we have inflicted more damage since 1950 to the planet’s living systems than we achieved in the preceding 100,000 years.”
He links to an excerpt from an interview with Wall Street consultant Nouriel Roubini, one of the few who predicted the financial crash, quoting his striking conclusion:
“Karl Marx, it seems, was partly right in arguing that globalisation, financial intermediation run amok, and redistribution of income and wealth from labour to capital could lead capitalism to self-destruct.”
(Roubini’s arguments for a return to the right balance between markets and provision of public goods can be seen in this recent article.)
As the current economic system faces crisis in the financial sphere it also, says Monbiot, fails to address the environmental crisis. The promise that economic growth and environmental damage could be decoupled hasn’t come remotely near being delivered.
So far governments have responded to the crisis by frantically seeking to “revive the old magic” again. It won’t work.
But now, in the wake of the English riots and faced with possible collapse, he detects the beginnings of talk about the issues ignored while the illusion persisted: “equality, exclusion, the feral rich and the discarded poor and, in WH Auden’s words, about ‘what the god had wrought / To please her son, the strong / Iron-hearted man-slaying Achilles / Who would not live long.’”
I enjoyed reading the article, as I often do with Monbiot’s writing, but what made me decide to build it into a Hot Topic post was that he then went on to see a sign of hope in the fact that Ed Milliband had included in his pile of holiday reading Prof Tim Jackson’s book Prosperity Without Growth. “It’s a revolutionary text, now two years old, whose time has come.” I wrote a review of the book over a year ago and was very impressed by it. I often wish with some of the books I review that there was a way of keeping them as an object of attention for longer than an ephemeral post allows. This was certainly one of them, and I couldn’t pass by the opportunity to recommend it a second time. Monbiot provides a summary of the book’s main ideas. So does Jeremy Leggett in his excellent Guardian review.
My own summary of the book’s thinking can be seen in my review, and I won’t try to recast that here. The more I look at what Jackson wrote the more sense it makes. He is recommending ways in which an economy can work within a recognition of the ecological limits we have too long ignored. In doing so it can set less emphasis on labour productivity and provide high employment in a low-carbon economy. The book doesn’t propose revolution or picture utopia. It’s not even suggesting the dismantling of capitalism. Jackson points out that there is a wide spectrum of possibilities in a capitalist system: greater public ownership and a more significant role for government are not incompatible with a capitalist economy.
Here’s how Monbiot sums it up:
“His system is not wholly different to today’s: people will still spend and save, companies will still produce goods and services, governments will still raise taxes and spend money. It requires more government intervention than we’re used to; but so does every option we face from now on, especially if we try to sustain the growth illusion. The results, though, are radically different: a stable, growthless economy which avoids both financial and ecological collapse.
“From now on, as the old dream dies, nothing is straightforward. But at least we have the beginning of a plan.”