A crisis of growth

2014-09-09 21:49

I recently attended a lecture by degrowth activist Charles Eisenstein and author of Sacred Economics, who spoke about man’s separatism from nature and his dominance over the little rock called earth in a self-interested quest for endless growth. He proposes a redirection away from the traditional and perpetual pursuit of economic growth in favour of an economic system that is in line with the earth’s limits. What we do always comes back to us.

I must say what he had to say was both eye-opening and reassuring of my own beliefs – the current economic system only works as long as market opportunities and the market for goods and services continues to grow, so new loans can pay back old debt.

How can we expect to get months upon months upon months of consecutive positive growth? How can we expect banks to give out thousands of rand of new loans each month based on “new growth”? In the words of Hyman Minsky, who predicted the 2008 global financial crisis with his financial instability hypothesis: “Economic and financial instability arises through the rapid acceleration of debt over a prolonged period of prosperity to the point where the provision for bad debt rises and traditional borrowing is replaced by borrowing that depends on new loans to replace existing debts.”

The system is broken.

We expect our future prospects to pay off our current debts. Each month banks give new loans to new and innovative market opportunities and the market for goods and services feeds a culture of conspicuous consumption and materialism, as the middle class buy things that they never knew they would ever need. The desire for financial security, to have money, to have things, to have financial policies, to make debt and to live the “privileged life” has become a culture. We have the desire to live a simple and convenient life but instead we have become the dominant species and have taken our natural resources for granted, with overconsumption lying at the root of long term environmental damage and social inequalities.

We cannot separate ourselves from the effects of our actions.

I hate to sound like an environmentalist prude, but growth domestic product is a lie. A measure that should reflect economic performance has little relevance to the social aspects of society and the moral principles of equity, social justice and redistribution. Economic performance in itself is a lie. It includes only things with a “price tag” and fails to take into account the informal sectors of an economy, the voluntary activities, the odd jobs and anything that remotely reinforces social cohesion and may in fact help growth. It has flouted environmentalists’ concerns as it takes no account of the depletion of natural resources nor does it take into account the social injustices and environmental degradation that happens as a result.

Growth today has become a means of economic activity rather than the ends. Synonymous to overconsumption, it has almost completely relied upon consumption as a measure of economic progress, rather than improving individual well-being not by “more is better” but through non-consumptive means, distributing tax burdens more equitably, sharing work hours better, strengthening cultural and community resilience, and restoring the earth’s ecosystems. We must disabuse ourselves of the notion that prosperity means “a consumer lifestyle” that depends on growth as a driver of development and the exhaustion of natural resources.

And yet free market economists, who dictate economic policy will always continue to tell us that we need growth.

But whether we like it or not, degrowth is inevitable because we live on a planet with finite resources, and I hope that we’ll start to realize sooner than later that economies and countries cannot continue to grow infinitely.

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AB praises selfless skipper

2010-11-21 18:15

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