I just read the 2nd edition of Tim Jackson’s now-classic Prosperity Without Growth, which has been out for a few months, and it’s a book I’d recommend to anyone but especially economics students. Although most students do now learn about environmental constraints and trade-offs, we do socialize them quickly into thinking about economic growth as the objective of policy. It is all too clear that the failure to take account of externalities and the depletion of natural capital assets means we’ve paid a high price for past growth. Measuring these better to ensure they’re incorporated in the choices society makes is part of my own research.
Havings said this, and commending the book, I have one central problem with its argument, as with some others making similar arguments. And that turns on the understanding of what (GDP) growth consists in. Even those who acknowledge the importance of services in the economy – as Tim Jackson does – then consistently talk about growth as consumer demand for material products, for stuff: “How is it that with so much stuff already we still hunger for more? Would it not be better to halt the relentless pursuit of growth in the advanced economies and concentrate instead on sharing out the available resources more equitably?” So stuff and growth are conflated.
As I’ve been pointing out for 20 years, growth in the advanced economies is increasingly non-material – accepting that we import stuff embodied in goods, which must be accounted for. The archetype of modern growth is a new idea – that an aspirin can avert cardio-vascular problems as well as cure headaches; that apps on one device can replace multiple material objects.
This is why indicators like the Genuine Progress Indicator, that flatline from the 1970s on while GDP rises, are so unpersuasive. I disagree with Tim when he writes: “[T]he continued pursuit of economic growth doesn’t appear to advance and may impede human happiness.” So although I agree completely that the usefulness of GDP as a welfare measure is declining, I don’t think we know how to weigh against each other the environmental minuses and innovation pluses. This is why I’m obsessed with how we conceptualise and measure society’s economic welfare, including measuring assets to give us a handle on sustainability; but many of the innovations do advance human well-being. I remember the 1970s, and though the music was better, many aspects of life were far less satisfying. Patti Smith and Siouxsie & the Banshees aren’t enough to make me want to turn the clock back.
This is an important, possibly existential debate, so I hope the book is being widely read. I also appreciate its (only slightly lukewarm) defence of economics: contrary to the impression some environmetalists seem to give, many economists care passionately about our environment and sustainability, & we think our intellectual tools can make a useful contribution.