Economic growth has let us down. What's the alternative?

Tim Jackson

2nd November, 2009
Tim Jackson's new book, 'Prosperity Without Growth', is an explosive indictment of the failure of economic growth to provide sustainable wellbeing for the world's population. But there could be another way forward...

Economic growth is supposed to deliver prosperity. Higher incomes should mean better choices, richer lives, an improved quality of life for us all. That at least is the conventional wisdom. But things haven’t always turned out that way.

Growth has delivered its benefits, at best, unequally. A fifth of the world’s population earns just 2 per cent of global income. Inequality is higher in the OECD nations than it was 20 years ago. Far from improving the lives of those who most needed it, growth let much of the world’s population down. Wealth trickled up to the lucky few.

Fairness (or the lack of it) is just one of several reasons to question growth. As the economy expands, so do its ecological impacts. In the last quarter of a century an estimated 60 per cent of the world’s ecosystems have been degraded. Global carbon emissions have risen by 40 per cent since 1990. Significant scarcity in key resources – such as oil – may be less than a decade away.

On the other hand, when growth stalls, as it has done over the past year, things go quickly from bad to worse. Firms go out of business, people lose their jobs and a government that fails to respond appropriately will soon find itself out of office. Dynamics are vital here. Continuous improvements in technology mean that fewer people are needed to produce the same goods from one year to the next. So if output doesn’t expand, there is a downward pressure on employment and a spiral of recession looms. Growth is necessary within this system just to prevent collapse.

In short we find ourselves locked between the horns of an uncomfortable and deep-seated dilemma: growth may be unsustainable, but ‘de-growth’ – a contraction in economic output – appears to be unstable. Questioning growth in these circumstances is deemed to be the act of lunatics, fanatics or idealists.

Full article here