Economy in Balance

For an orthodox economist, ‘growth’ is an article of faith. In his book The Growth Illusion, Richard Douthwaite reveals the almost religious awe in which this holy of holies of capitalist economics is held. Its conceptual power is so all-encompassing that an economist would have to call a decline in economic activity, such as that seen in 2009, an example of ‘negative growth’ rather than shrinkage or recession.

Fortunately, we are not all wedded to the capitalist growth model and part of the task of a green economist is to revision key aspects of life—consumer behaviour, money, employment and population—in a no-growth world. What we are seeking is a managed descent or what Howard Odum referred to as ‘a prosperous way down’. Abandoning the true faith of capitalist economics is a good step. Another would be to find a cheerful phrase to sum up where we are going.

The phrase ‘steady state economy’ (coined by Herman Daly) is ambiguous in terms of economic theory, as well as implying a state of stagnation that is neither appealing nor compatible with nature’s way of creative evolution. Daly’s teacher Nicolae Georgescu-Roegen used the word ‘degrowth’, whose French variant, 'decroissance', has spawned a whole political movement. In spite of these elegant associations, in English it is ugly and has unhelpful implications of a return to the horse and cart. At a recent conference about the steady-state economy in Leeds, New Economics Foundation director Andrew Simms suggested we use the phrase ‘dynamic equilibrium’ for the central principle of the new economic paradigm, a suggestion that was met with warm murmers of approval.

As we co-create the new paradigm we are learning that less really can be more. This is especially important to remember at a time when so many voices as calling for a return to growth as the answer to recession. Instead, our priority should be to find ways of Living Within Our Means (pdf, 26 K) that do not involve injustice or exploitation of people or the planet. Just as we call for Contraction and Convergence (pdf, 178 K) at a global level, so the shrinkage of our national economy could be linked to a move towards greater equality. I am making available here a (sorry, userfile id 'gloscuts' not found in database)

So next time you hear somebody saying how important it is that we return rapidly to the growth path so that we can ‘grow our way of the recession’ you could try proposing to them instead that they imagine a world where we flourish within limits while living in a dynamic equilibrium with our planet.