The Economics of Sustainability Don’t Work
In ‘Enough is Enough, Building a Sustainable Economy in a world of Finite Resources’, Dan O’Neill and Rob Dietz argue “that it's time to abandon the pursuit of growth in wealthy nations and consider a new strategy — an economy of enough. Suppose that instead of chasing after more stuff, more jobs, more consumption, and more income, we aimed for enough stuff, enough jobs, enough consumption and enough income”.
I wish the sustainable approach would work, because the unsustainable one doesn’t work either. But there is a difference between monetary growth and growth in resource depletion and carbon emissions. Here I am talking about monetary growth and that can still happen without resource depletion, if you consume things like songs or videos.
Non-growth economics is like aiming for a B when developing nations are striving for As.
The no-growth approach only works in a closed system with no competitors, i.e. globally or in a non globalized word.
Following it would be catastrophic and would punish younger generations with extreme hardship. It's basically what's happening in southern Europe and France.
The European model was noble: quality of life; workers rights; high pensions; retiring early ‘to free up a job for someone younger’; working to live instead of living to work.
But millions of Chinese, Indians and Brazilians were working to live.
For a while, in Europe, this meant retiring at 55 (majority of French do not work after 50!) after 20 years working (15 at certain organisations such as the UN), with a pension based on final salary that if you had an ordinary life expectancy (80 for men 84 for women) would mean your pension as a train driver made you a guaranteed millionaire (TGV driver pension worth average of more than 1M euros). And this state worker benefit was for the majority (60% French GDP is state based).
But this wasn’t just in Europe. Even in the US certain civil servants had it good. An average New York City cop retires before 50 with a pension worth more than $2 million.
As the price of Chinese made kids' toys went down, people in the West felt even richer and house prices increased (people forget that the banking crisis was caused by bankers lending to ordinary people to buy these houses). Now Chinese wages will rise, and assets in Europe will go down. They have already in the US.
The European economic ‘growth’ system was in fact based on buying cheap toys and borrowing against assets. It was a non growth model - a sell the family silver one. China which genuinely was growing, was not getting into debt.
The people who have started to pay for the European non-growth model are people in the private sector. Ordinary people, with low pensions and meager job prospects. But it is the young that will really pick up the tab.
The young will, no doubt, radicalise and blame (quite rightly) the bankers. But they should also blame the vast swathes of joyless civil servants who can pretend to be on their side because their millions are paid out slowly, unnoticed.