Are we growing an economy or a cancer?
The growth model needs treatment before it kills us.
Ecological philosopher Edward Abbey once declared “growth for the sake of growth is the ideology of the cancer cell.” He was referring to the ever-diminishing wild places of his beloved Arizona, replaced by sprawling subdivisions that housed a ballooning population of retirees, alongside massive mining and oil operations run by multinationals.
When Abbey’s essay, “The Blob Comes To Arizona” was written in 1976, Arizona was the fastest growing state in the Union. Out of concern for the impact such a rapid rate of growth was having on the ecology of the high desert, Abbey sought some answers from the governor at the time, Raul Castro.
“I tried to pin the Governor down on the question of just how much growth is good and how much is too much? At what point, I wanted to know, should we in Arizona draw the line? The Governor would not be pinned. Dismissing the question as hypothetical — and of course it is hypothetical, that’s why I asked it — he went on with other matters.”
In 1976, when the nation was just coming out of a recession, economists, scientists and policymakers dared not even consider his question: “how much growth is too much?”
Forty-two years later, as we look back at a global economic crisis and watch an environmental meltdown loom ever closer, we’re seeing what happens when we dismiss such questions as hypothetical: reality sets in.
Too much growth affects the balance of power
According to Politifact, “from 1979 to 2012, the top 10 percent of earners in the United States made, on average, $144,418 in 1979 and $254,449 in 2012. That’s about 76 percent growth.The bottom 90 percent of earners, on the other hand, made $33,526 in 1979 and $30,438 in 2012. That’s a decrease of about 9 percent.”
That equates to a nine percent decrease in the ability to pay for higher education or own a home and ultimately the ability to have a financial stake in the political direction of the U.S.
Labor income inequality is just one aspect of unchecked growth. Matthew Yglasias of The Slate observed that capital inequality — the source of wealth and how it’s saved or spent — is even steeper and more consequential to who has a say in our world.
“A married couple where Dad earns $65,000 a year and Mom works part-time bringing home $15,000 a year is in the fourth quartile of the American income distribution. A 70-year-old widower whose $2 million in savings bring him an annual income of approximately $80,000 is also in the fourth quartile. But their policy-relevant economic interests are unlikely to have very much in common since in reality their financial situations are entirely dissimilar.”
As is their political influence. In a study entitled “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens,” political scientists at Princeton determined that the influence of the average American citizen on policy is fractional compared to the influence of the economic elite in the 90th income percentile.
Too much growth upsets the balance of the environment
In Cape Town, South Africa the population has increased by 79 percent in 23 years whilst dam water storage only increased by 15 percent in the same period. The city, which is home to over 4 million people, is now less than a year away from “Day Zero” — a day sometime in 2019 when Cape Town is expected to run out of water.
Meanwhile the residents of the Pacific island nation of Kiribati have the opposite problem: rising sea levels and intensifying storms are predicted to cause economic collapse, health hazards and diminishing natural resources as their series of atolls are gradually washed away. Over the past few years, the island’s political leaders have been preparing for “migration with dignity.” The island’s population will be among millions of what climate change scientists are referring to as “climate refugees.”
The growth model turns a blind eye to the realities of the world
Even faced with dire social and environmental consequences, many twenty-first century economists continue to worship their twentieth century models of economic growth. Instead of asking “how much is too much growth,” they ask “how can we further stimulate growth?”
Indeed, some economists roll their eyes and dismiss questions of limiting growth as part of a progressive globalist agenda.
Steven Horowitz of the Foundation for Economic Education, for example, recently proclaimed
“Severe poverty fell almost 75 percent in a mere 25 years, thanks to the freeing of global markets, especially in China and India. No government policy in human history has even come close to what markets have done over that period. The success of that basic economic insight, that markets improve human well-being, has generated immense cognitive dissonance among many progressives.”
Horowitz used the World Bank report on Ending Extreme Poverty and Sharing Prosperity as his point of reference, yet failed to acknowledge that the gap between the top 10 percent of wealth-holders on the planet and the bottom 50 percent is wider than ever.
The top 1 percent have captured over a quarter of all total wealth in the world while the bottom 50 percent only own 12 percent of it. Meanwhile, as we can see from the U.S. there appears to be a backlog in the trickle of capital wealth down to the working classes.
While the global economy grew at unprecedented rates, we paid the ultimate price by dramatically reducing our chances of survival as a species. According to a January 2015 paper in Science, Johan Rockström observed
“Humanity has already raced past four of the nine boundaries keeping our planet hospitable to modern life. The climate is changing too quickly, species are going extinct too fast, we’re adding too many nutrients like nitrogen to our ecosystems, and we keep on cutting down forests and other natural lands. And we’re inching towards crossing the remaining five boundaries.”
So what do we do when confronted with the news that our unchecked growth is killing us?
As with any health crisis, we react in a very human way. Some of us prefer to deny — as we see from claims of the “climate change hoax” and the “myth of income gap.”
Some of us get angry — as we see in massive demonstrations and movements like Occupy Wall Street and the March for Science.
Some of us get depressed — and express our outrage and sadness on social media.
Some of us negotiate — as seen in the Paris Climate Change Accord and the World Economic Forum in Davos.
And some of us find acceptance. Then we focus on healing ourselves, living a healthier lifestyle, and prevention.
The cure for too much growth? A doughnut diet.
Economist Kate Raworth long ago accepted the perils of using economic growth as an indicator of success. It wasn’t that she thought capitalism was flawed, but that the models we use to demonstrate its success are out of touch with reality.
The above circular flow model demonstrates an ideal exchange of goods and money, but brushes aside the existence of the Earth as a factor of production and unpaid labor like stay at home parents and community-building as a means of supporting and delivering services.
Raworth saw that the circular flow model assumed that the economy lived in a vacuum. It didn’t factor the impact and dependence of that growth on the wellbeing of humanity and upon the planet.
When you envision the economy as part of a greater system, you see that growth for the sake of growth can disrupt or weaken the system to the point of collapse.
And while it’s tempting to say “let’s get rid of growth altogether and focus on stability,” we need to remember that growth itself isn’t the problem — the problem is rapid, unchecked growth that can end up crowding out vital resources and devouring opportunity for some while unfairly rewarding others.
Built in growth inhibitors
In nature, healthy DNA not only determines how a lifeform will grow, it also inhibits cell multiplication once the cells have fulfilled their purpose — before they multiply uncontrollably, forming a cancer.
If our economy is a natural extension of how humanity exchanges goods and services and grows prosperity, it should have a growth inhibitor programmed into its DNA so we never have to wonder “how much is too much growth?”
Kate Raworth mapped the genome of a 21st century economy that encompasses more than just growth of national wealth — it reflects the state of our prosperity as a species living on the planet Earth.
Welcome to the Doughnut.
What if economics didn’t start from money, but from human well-being?
In Raworth’s Doughnut, the hub (or hole) represents the fundamental needs of human society. Only when we fill that hole by ensuring everyone has what they need can we prosper as a species.
The systems we create to fulfill those needs should never be in detriment to the environment. Instead, we design systems that help us grow into that sweet spot between social foundation and environmental ceiling, which Raworth calls the “safe and just space for humanity.”
Outside the environmental ceiling, the spokes represent the nine planetary boundaries that indicate the limits of environmental impact our planet can absorb before it becomes inhospitable to human life.
A compass for 21st century economics
Instead of measuring prosperity with a line graph moving ever upward, Raworth says, we need to measure the balance we keep between ensuring human rights while protecting the planet’s resources.
So what does that balance look like now?
Well…there’s some work to do. As you can see, we’re shooting far beyond the environmental ceiling to support the needs of the few.
The goal for the 21st century, then, is to bring our impact back within the planetary boundaries while fulfilling the fundamental needs of all.
We can be the generation that redirects humanity to an equilibrium.
It seems like a big job. But someone has to do it. If not for us, then for the next seven generations.
So what can you do at an individual level or at an entrepreneurial level to help bring balance back? Here are some behaviors you can commit to, starting today:
1) Commit to a lifestyle/create a business that reduces consumption, supports sustainable supply chains, and invests in restorative environmental measures.
Ramping up production and consumption is the growth model’s way of keeping people employed, but as we can see in the above Doughnut model, it’s been at the expense of the planet’s resources and now we’re in serious environmental debt.
We need to give ourselves an impact budget to stick to so we can limit our spending of planetary resources. That means committing to purchasing only what we need from businesses who source sustainable products from ethical suppliers. It means reusing, repurposing and recycling anything we buy so we reduce our household and business waste footprints. Cause Artist is a great resource for learning about consumer brands who are dedicated to social and environmental good.
But spending less and sticking to the 4 R’s will only help to create better habits for the future — we also need to fix our mess. There are all kinds of ways you can take some of the pressure off the ecosystem and give back to the planet, from participating in urban farming to installing a greywater recapture system in your bathroom.
When we change the way we consume products by being mindful of how they were made and where they were sourced, it helps to slow and reduce the rapid rate of consumption.
2) Educate yourself on systems of inequality and how you or your business may be perpetuating them.
This is a big ask, because it demands that you do the hard work of changing your perspective and looking at yourself. Rampant economic and population growth has fed into systems that promote unnecessary competition for resources and power between ethnic groups, nationalities and genders.
When we consider how our actions may have put someone else at a disadvantage or our privilege has given us an unfair advantage, it lets us see the imbalances that impact the lives of people around us. And only when we see those imbalances can we learn how to balance them out.
A great resource to use as you explore this topic is Inequality.org, a nonprofit dedicated to studying and solving economic and social inequality so we can leave the planet a more equal place.
3) Invest in the wellbeing of others.
There’s a famous saying from Nelson Mandela: “a nation should not be judged by how it treats its highest citizens, but it’s lowest ones.”
The growth model treats human wellbeing as a “nice-to-have” — a byproduct of economic growth, but not necessary to achieving its goals. It also feeds into the fallacy that helping those who have little will limit the opportunity or take away resources of those who have enough.
The Doughnut treats human wellbeing as the ultimate measure of a successful economy. When you support policies, advocate for services and spend your money with businesses that improve the lives of people living closer to the the center of the hub, we can all get closer to living in that wonderful green ring of safety, health and justice for all of humanity.
To learn more about the Doughnut, watch Kate Raworth’s TEDx talk: