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• Wednesday, January 27th, 2010

A new book by Tim Jackson “Prosperity Without Growth” focuses upon our new reality: economics needs to shift its focus from growth and towards new definitions of prosperity.

Gross National Product (GDP) is one of the statistics economists have used for 50+ years to define economic growth and prosperity. However, there are alternatives to a definition of prosperity based upon growth. The tiny country of Bhutan, for example, measures economic progress by Gross Domestic Happiness (GDH)  and ignores traditional GDP.

Source: The Guardian

“Questioning growth is deemed to be the act of lunatics, idealists and revolutionaries. But question it we must.” And that is the core mission of this perfectly timed book. Had he published it before the financial crisis, he would probably have been dismissed as another green idealist, at best. But in the wake of the crisis, more people are questioning the primacy of growth at all costs. President Sarkozy, the Nobel-prizewinning economist Joseph Stiglitz and elements of the Financial Times’s commentariat are among those now arguing that prosperity is possible without GNP growth, and indeed that prosperity will soon become impossible because of GNP growth. A new movement seems to be emerging, and this superbly written book should be the first stop for anyone wanting a manifesto.

Jackson, who is economics commissioner on the UK government’s Sustainable Development Commission, skilfully makes the relevant economic arguments understandable to the lay reader. He is not slow to simplify where that is warranted: “The idea of a non-growing economy may be an anathema to an economist. But the idea of a continually growing economy is an anathema to an ecologist.”

This is the core of the debate. Endless growth is a ridiculous notion to the typical ecologist because we live on a planet with finite resources, the mining and use of some of which is undermining our planet’s life-support systems. But the typical economist believes we can “decouple” GNP growth from resource use through the increased efficiency that tends to be intrinsic to capitalism: that we can grow our economies and reverse environmental degradation too. Tesco, as it were, can keep building more stores for ever, provided they are increasingly resource-efficient.

Jackson argues compellingly that such “decoupling” is a myth. A key area of argument, as with so much else in the current world, involves climate change. If we keep growing GNP, Jackson explains, then we fail to cut greenhouse gases deeply. This means we stoke destruction of prosperity beyond the short-term horizons – “next quarter’s growth figures” and all the rest – on which we routinely put such emphasis today.

Prosperity Without Growth: Economics for a Finite Planet by Tim Jackson

We must repudiate traditional economics if we’re to save the planet, says Jeremy Leggett

Prosperity is understood as a successful, flourishing or thriving condition: simply, a state in which things are going well for us. Every day the system in which we live tries to persuade us – via TV news, politicians’ speeches, corporate pronouncements, inducements to consume and so on – that our prosperity is intimately linked to whether or not gross national product is growing and whether stock markets are riding high. These are the two main measuring sticks for the version of capitalism on which most countries base their economies today.

  1. Prosperity without Growth: Economics for a Finite Planet
  2. by Tim Jackson
  3. 160pp,
  4. Earthscan,
  5. £12.99
  1. Buy Prosperity without Growth: Economics for a Finite Planet at the Guardian bookshop

Other ways of measuring prosperity, such as employment and savings, follow these two. If GNP – the total national output of goods and services – is in recession, then unemployment will rise, and that means growing numbers of unprosperous people without salaries. If stock markets are falling, that means falling pension values, and rising numbers of unprosperous people in retirement. So what’s not to like about growth?

Tim Jackson states the challenge starkly: “Questioning growth is deemed to be the act of lunatics, idealists and revolutionaries. But question it we must.” And that is the core mission of this perfectly timed book. Had he published it before the financial crisis, he would probably have been dismissed as another green idealist, at best. But in the wake of the crisis, more people are questioning the primacy of growth at all costs. President Sarkozy, the Nobel-prizewinning economist Joseph Stiglitz and elements of the Financial Times’s commentariat are among those now arguing that prosperity is possible without GNP growth, and indeed that prosperity will soon become impossible because of GNP growth. A new movement seems to be emerging, and this superbly written book should be the first stop for anyone wanting a manifesto.

Jackson, who is economics commissioner on the UK government’s Sustainable Development Commission, skilfully makes the relevant economic arguments understandable to the lay reader. He is not slow to simplify where that is warranted: “The idea of a non-growing economy may be an anathema to an economist. But the idea of a continually growing economy is an anathema to an ecologist.”

This is the core of the debate. Endless growth is a ridiculous notion to the typical ecologist because we live on a planet with finite resources, the mining and use of some of which is undermining our planet’s life-support systems. But the typical economist believes we can “decouple” GNP growth from resource use through the increased efficiency that tends to be intrinsic to capitalism: that we can grow our economies and reverse environmental degradation too. Tesco, as it were, can keep building more stores for ever, provided they are increasingly resource-efficient.

Jackson argues compellingly that such “decoupling” is a myth. A key area of argument, as with so much else in the current world, involves climate change. If we keep growing GNP, Jackson explains, then we fail to cut greenhouse gases deeply. This means we stoke destruction of prosperity beyond the short-term horizons – “next quarter’s growth figures” and all the rest – on which we routinely put such emphasis today.

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