Prosperity without Growth: Planning for a Sustainable Economy

Article excerpt

Where is prosperity after 50 years pursuing the narrow aims of economic growth worldwide? Over 60 percent of the world's ecosystems on which we depend for survival are degraded and over 2 billion people live in poverty on less than $2 daily ,while the richest 20% of people earn 74% of the world's income. We face the end of the cheap oil era, steadily rising commodity prices, degraded forests, lakes and soils, conflicts over land use, water, fishing, and the challenge of stabilising concentrations of carbon dioxide in the atmosphere, rising now by over 3% yearly. Continuing with growth and all aspiring to the affluence of OECD nations can only lead to increasing destruction of the environment and society. Poorer nations are in urgent need of growth, but we cannot have a fair world unless growth in richer nations is stopped. Twelve steps outline the path to a sustainable economy. Real prosperity is in the quality of our lives and our ability to flourish within the ecological limits of a finite planet. This article is abridged from the report by Professor TIM JACKSON of the UK's Sustainable Development Commission.

Every society clings to a myth. Our myth is economic growth which is supposed to deliver an improved quality of life for all. For the past five decades pursuing growth has been the most important policy goal globally. The global economy is almost five times the size it was half a century ago. If it continues growing at the same rate the economy will be 80 times its current size by 2100. The great ramping up of economic activity globally has no historic precedent and is totally at odds with our scientific knowledge of the finite resource base and the fragile ecology we depend on for survival.

Growth has delivered its benefits unequally. A fifth of the world's people earns just 2% of global income, while the richest fifth earn 74% of the world's income. Inequality is higher in OECD nations now than it was 20 years ago. While the rich got richer, middle-class incomes in Western countries were stagnant in real terms long before the recession. Far from raising living standards for those most in need, growth let much of the world's population down, trickling up to the lucky few. Fairness, or lack of it, is one of many reasons to question the conventional formula for achieving prosperity. As the economy expands, so do related resource impacts which are already unsustainable. In the past quarter of a century the global economy has doubled, while an estimated 60% of the world's ecosystems were degraded. Global carbon emissions have risen by 40% since 1990, the Kyoto Protocol 'base year,' and significant scarcity in key resources like oil, may be less than a decade away.

Most of us avoid the stark reality of these numbers and assume, financial crises aside, growth will continue indefinitely. Not just for the poorest countries, where a better quality of life is undeniably needed, but even in the richest nations where material wealth's cornucopia adds little to happiness and now threatens the foundations of our wellbeing. Reasons for our collective blindness are easy to find. The modern economy is structurally reliant on economic growth for its stability. When growth falters, as it has recently, politicians panic. Businesses struggle to survive. People lose their jobs and sometimes their homes. A spiral of recession looms. Questioning growth is deemed to be the act of lunatics, idealists and revolutionaries.

Growth creates instability

But the myth has failed us so we must question it. Economic growth has failed two billion people who still live on less than $2 daily, it's failed the fragile eco logical systems on which we depend for survival and spectacularly failed to provide economic stability and to secure people's livelihoods. The model was always unstable ecologically, and has now been shown to be unstable economically.

The banking crisis of 2008 led the world to the brink of financial disaster, shaking the foundations of the economic model. …