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29 June 2022

Why an end to economic growth is inevitable

Fifty years after the Limits to Growth report was published, the concept of post-growth remains largely taboo.

By Philippa Nuttall

In 1972, the seminal Limits to Growth report was published. Written by a group of young researchers at the Massachusetts Institute of Technology, the book made clear for the first time that the earth’s resources were finite. Continuing to push for ever more economic growth would ultimately be to the detriment of planetary and human health. Fifty years on, the world’s addiction to growth has led to ever greater use of fossil fuels, land and minerals, provoking climate change, the sixth mass extinction of species and social inequality. Community responses during the height of the Covid pandemic led some to hail a shift to a more caring, sharing society fashioned around local economies, but in the face of a tsunami of crises, governments are back to cheering global economic “growth” as the panacea to all ills.

Dennis Meadows, one of the authors of Limits to Growth, had recently celebrated his 80th birthday when I spoke to him via video link earlier this month. Our discussion would be his last media interview, he said. After 50 years, it was time to stop repeating “the same old thing”. Since the 1970s, Meadows, who co-wrote Limits to Growth as a 29-year-old student with his wife Donella, and fellow academics Jørgen Randers and William Behrens, has been arguing for an end to the political fixation with economic growth, which is environmentally destructive and often does more social harm than good. Despite his interventions, most politicians continue to pursue and proclaim economic growth as a paramount priority.   

Locked into short-term electoral cycles, “politicians are fundamentally dependent on the promise of growth,” says Meadows, since weaning societies off growth “calls for actions that look negative in the short-term to produce longer-term benefits”. Such logic is the “antithesis” of modern politics. Back in 1972, “many economists believed we were crazy and stupid”, not least because of the long-term time horizon we used in our research, says Meadows. The Limits of Growth was based on computer simulations, which showed that without substantial changes in resource consumption, “a rather sudden and uncontrollable decline in both population and industrial capacity” would be the likely outcome by 2100. The book’s thinking was so “preposterously” outside the paradigm of mainstream economists, who saw growth – generally fuelled by free markets, low taxes and access to unlimited energy and resources – as the recipe for success. “They thought they were dealing with lunatics, and they rejected it.” 

[See also: Is nuclear energy a sustainable solution to climate change?]

Politicians also doubtless continue to cling onto growth policies as they have delivered successes. Before Covid hit, since 1990 more than 1.2 billion people around the world had risen out of extreme poverty as economies in China and elsewhere have grown, with just over 9 per cent of the world surviving on less than $1.90 a day, compared to nearly 36 per cent in 1990.

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Evolution has also influenced our preference for short-term thinking, Meadows believes. “Imagine there are two people and a hungry animal is running at them,” he says. “One sits down and says now is the time to contemplate the future of civilisation; the other one says it’s time to run. It’s the second one who passes on their genes. We’re genetically not capable of fashioning a 60- or a 100-year vision and sustaining it.” From daily stock market reports to monthly consumer price indexes, our society is geared to focus on the short term.  

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“When we wrote Limits to Growth, I was relatively naive,” admits Meadows. “I suppose I had the idea we would send out these results, people would read them, the scales would fall from their eyes, their behaviour would change and everything would be fine.” Unsurprisingly, he is more cynical today. Rather than “proactive change,” he forecasts “reactive change”: growth will eventually stop simply because it is no longer possible.  

Meadows doubts the current crises – the rising cost of living, high energy bills and the war in Ukraine – will make much difference to how politicians think. “Change requires a long-term perspective. Crisis engenders panic, which shortens time horizons, which causes even worse decision making, which intensifies the crisis,” he observes. “Civilisations rise and fall. The Phoenicians probably thought that they were God’s gift, but they like the Carthaginians, the Aztecs, the Incas and the British Empire all disappeared. Our civilisation will go the same way,” says Meadows. A thousand years from now, our species won’t have been eliminated from Earth, he believes. “But this energy intensive, high material consumption, high mobility civilisation will be gone,” simply because it isn’t possible to sustain itself.  

[See also: Esther Duflo: “Climate change is a problem from hell politically”]

The UK economist Kate Raworth, the author of the best-selling 2017 book Doughnut Economics is among the intellectual progeny of the Limits of Growth. She works with policy makers at local, national and supranational levels to show what a new, post-growth economic paradigm could look like. Raworth’s Doughnut Economics explains her concept of creating an economy in which there is a “social foundation of well-being that no-one should fall below” and an “ecological ceiling of planetary pressure that we should not go beyond”. This is the doughnut. The jam is the “safe and just space for all” that lies between the foundation and the ceiling. 

“Growth is a wonderful healthy phase of life,” Raworth says. “We love to see our kids and our gardens grow.” Her 13-year-old twins are now taller than she is and seeing them grow has been “wonderful”. But if they keep growing, “they will no longer fit at the table or belong in our household”. Likewise, “if a friend went to a doctor’s and said she had a growth, we’d all go very quiet.” The quest for endless economic growth is causing similar harm to the health of the planet, Raworth explains. Instead of wishing for her children to grow forever, Raworth hopes they will “thrive in their activities, their learning, their relationships”. Economies should follow the same pattern of maturity, she believes.   

For Raworth a thriving economy is regenerative. “We have inherited linear degenerative economies that transform materials into stuff we use and throw away.” Degraded natural environments and vast amounts of waste are accepted as part of industry. Waste doesn’t exist in a world living in the doughnut. Instead, everything is “treasure” to be reused, repurposed or recycled, says Raworth. 

She has none of Meadows’s cynicism; she fizzes with optimism and describes the daunting task of overhauling the global economy as an “incredibly exciting opportunity”. Her enthusiasm is in part fuelled by the fact doughnut economics are being discussed and trialled by companies and cities from Barcelona to Brussels in Europe, to Ipoh in Malaysia and El Monte in Chile.

In addition to global warming and the environmental destruction caused by mineral extraction, urbanisation, plastic waste and the manufacture and transportation of a never-ending supply of goods, inequality between the rich and poor is also growing. Research by Oxfam, the NGO for which Raworth used to work, shows that since 1995, the top 1 per cent have taken nearly 20 times more of the global wealth than the bottom 50 per cent of humanity. Everything needs to be reimagined to create more equal opportunities, says Raworth. This includes “pre-distributing sources of wealth creation” such as health and education so each individual has the same opportunities and potential to become a “capable, productive member of society”; ending the use of housing as a “speculative asset” and instead making decent, affordable housing as a human right; and ensuring that company profits are used to benefit everyone not just CEOs and shareholders. 

Part of the reason why growth is not being questioned is because “we have a collective action problem,” believes Raworth. Companies are under pressure to deliver quarterly growth, while politicians fear being “booted out of the G20 family photo” if their country’s growth flags, she says. It’s primarily small countries like Scotland or New Zealand, which are under less pressure to “stay at the top of the big boys’ table”, that are pursuing some form of well-being economics. Raworth also notes that both countries are headed by women.  

Tim Jackson, the author of Prosperity without Growth (2009), a seminal work in the burgeoning “post-growth” movement, is another inheritor of the Limits to Growth tradition. He believes that political reactions to today’s crises are wrong-headed. “Leaping, under the influence of crisis and chaos, to instant solutions is rabbits-in-the-headlights thinking that works against long-term thinking and sensible answers”. He insists now is a critical time for him, Raworth and others to clarify an alternative vision to the growth and business-as-usual agenda. 

In 2016, Jackson helped set up an all-party parliamentary group on limits to growth in the UK. The aim wasn’t to get the government to “denounce or even question growth, but to set up a safe space where parliamentarians could think differently”. To dematerialise and decarbonise at the scale and speed required to avoid dangerous levels of climate change and to adapt to the global warming that already exists, we are likely to be all required to think differently. Having a mature and open discussion about growth would be a good first step to working out how our economies can and should function in the 21st century.

[See also: Esther Duflo: “Climate change is a problem from hell politically”]

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