Today we are hearing lots of rejoicing in Britain that the recession is over and that the economy is growing once again because we got a tiny bit of "growth" in the last quarter. Leaving aside the Christmas splurge and the car scrappage effect, which are an alternative possible source of the growth which might dampen the celebrations a bit, we have to ask ourselves if the resumption of conventional growth is entirely beneficial.
Yesterday, I sent a version of the text quoted below to our Treasury Minister, the Minister for Economic Development and a couple of greenish States members. I also sent it to the local paper. Unfortunately, I could not include this video from the New Economics Foundation (as I only saw it today) but, as they say, a picture is worth a thousand words and I suppose a video might be worth a million? or maybe a billion... but I'm spoiling the plot...
It demonstrates why economic growth is only a good thing for a certain period. After that time it becomes dangerous - like a larger than natural hamster
Here’s my letter:
“It's time to face up to the situation we are in because it would be irresponsible to do otherwise. As the world struggles with the latest and largest "bust" in the boom and bust economic cycle, many are starting to realise that the very basis of that economy, cheap fossil fuelled growth, is no longer sensible. More economic growth, of the type that conventional economists think will solve all ills, is no longer an option. All the experts that Finance Ministers and captains of industry and such-like rely on must be now regarded as false prophets. Their discipline is, of course internally self-consistent, which gives their pronouncements a spurious gravitas but the dangerous flaw is that it is based upon an oxymoron - an impossibility - unending exponential growth.
Successful as a theory for many decades, we are now coming up against the hard-wired physical limits of the planet and the serious nature of the large holes in the foundations of that theory are starting to show. Rather like Einstein had to come up with Relativity when Newtonian mechanics were no longer adequate to describe what we knew of the physical world, so too does conventional economics have to step aside for something more all encompassing.
The elephant-in-the-room flaw is that conventional economics just doesn't take enough into account when measuring the success or otherwise of businesses or economies. A car designed solely for high miles per gallon may appear, to the naive, to be the most efficient and cheapest to run but without consideration being given to the concomitant expensive maintenance costs, or the longevity of the engine and bearings, it is not a good deal. Similarly, the theories, expectations and prescriptions of conventional economists for the economy are a threat to the much larger natural environmental economy that supports it, supplies it and absorbs its waste.
While further economic growth is no longer desirable, economic development is still possible within the environmental and ecological limits that really should not be ignored or discounted any more. Are our Ministers fully aware of this imperative or are they hiding their heads in the sand?