Prosperity Without Growth - Essay Example

? “PROSPERITY WITHOUT GROWTH” IS NOT ONLY AN ALTERNATIVE VISION BUT ALSO A NECESSITY FOR OUR WORLD This essay explains the impact of growth on prosperity in accord to “Prosperity without growth”, a book by Professor Tim Jackson. It emphasises on the fact that “Prosperity without growth” is not only an alternative vision but also a necessity for our world. The dominant view about growth is explained along with the factors, which cause the relentless phenomenon of growth that we have so far experienced. It explains why humanity should look towards prosperity, which is not going to be measured by the traditional indices of growth. TABLE OF CONTENTS Introduction 4 Limits To Growth 4 Mathematical Analysis 5 Role And Impact Of Technical Advancements 7 The Quality Of Life 7 Challenges 7 Transition To A Sustainable Economy 8 Conclusion 8 References 10 1. Introduction Barack Obama (27 March 2008) said, “I think all of us here today would acknowledge that we’ve lost that sense of shared prosperity”. With the escalating gap between the economy of nations and amongst the individuals of same nation, prosperity is declining. The definition of prosperity needs to be revisited considering the world’s limitation of resources. According to Jackson (2009), global economy is constrained by finite ecological limits. The flourishing of human society in context of ecological limits is not only an alternate vision but also a necessity. This is a finite world with limited resources. To add to this, the population is expected to rise to 9 billion [1] and even more within a span of just three decades. Having a vision of prosperity for such a scenario is the need of the hour. Jackson (2009) has scrutinized the assumption that whether growth is essential for prosperity or not. Herman Daly (2008) and others have continuously tried to put forward the notion of steady-state economy. Jackson’s Prosperity Without Growth (2009) has been a vital attempt on the same notion and following it there are considerable “De-growth” European movements (Latouche, 2007) and surfacing of organisations like CASSE (2010). These actions and notions are all in favour of removing the growth element from the current implications of the economy. The arguments against this idea constitutes primarily of the reforms of the consumer-capitalist society. However as per Trainer (2010), the consumer capitalist society cannot be fixed or reformed. Rather, it needs to be scrapped and then remade along different lines. 2. Limits to Growth There are some huge issues down the line and these include the complete consumption of the environment, resource depletion, war, conflicts and lessening of social bonding. The key cause behind this would be overconsumption. Fotopoulos (2007) comments on the “de-growth initiative” and states that people are currently trying to live at standards of affluence which are too high for all to share. This is leading to an unstable society and considering the environmental factors, the adversity of results can be well analysed. Considering the following two examples, it is clear that the there needs to be a limit set to the growth factor or else, there would be no prosperity at all. Example 1: As per World Wildlife Fund (2009), it takes around 8 hectares of potent land to supply water, food and settlement area for one individual in Australia. After three decades, considering the number of 9 billion, 72 billion hectares of potent land would be required. This is approximately 10 times of the land which would be available at that time. Example 2: The Green House issue is well addressed by Hansen (2008) and Meinschausen et al (2009). In order to discontinue carbon content present in the atmosphere, the CO2 eliminations would be required to be completely eliminated by possibly 2030. Such examples clearly explain that the rich people’s living standards would no longer be sustainable in the coming future. People are living in way which makes it completely impossible to share resources by all. 3. Mathematical Analysis According to Jackson (2009), a massive increase in resource use, considering global economy of 2050, the need of setting ecological limits becomes very important. Meadows et al (2004) explored the possible outcomes of exponential population rise, resource use and economic activity. As per the following figure, humans are clearly heading for a collapse as the ecosystem is exceeding its resource base. Figure 1: b) Ecological overshoot, a) Economic growth (Jackson, 2009) Meadows et al (2004) suggested that the scarcity of the resources would eventually bring about a rise in the prices and cease the possibility of growth in future. For the same reason, the resource base would eventually collapse if the material throughput is not curtailed. One of the key notions given by Meadows et al (2004) is that the amount of resources cannot be computed by taking into account the current reserves and dividing it by the current usage, if the resource use is increasing. In such a scenario, the resource usage would also be taken into account as a percentage increase annually. Consider the case of chromium whose reserves were 775 million metric tons (MMT) in 1972 from which 1.85 MMT was mined annually. *The static index comes to be 775/1.85=418 years. However, taking into account the constant rate of increase in increase in usage as 2.6%, (Meadows et al (2004),pp 54–71), the statistics would differ. Including the 2.6% rate of increase in consumption, the resources would instead last for: calculating formula for a resource’s time left with constant consumption growth is: [2] where: y = years left; r = 0.026, the continuous compounding growth rate (2.6%). s = R/C or static reserve. R = reserve; C = (annual) consumption. 4. Role And Impact Of Technical Advancements People generally follow an approach that even if it growth escalates to high levels, they would be able to sustain high standards of living as the scientists and the technical wizards would be able to figure out the ways to produce goods and means without any issues. As a matter of fact, the technology for searching alternatives to reduce overconsumption is no implementation of these alternatives owing to political reasons. However, these changes are perceived to bring reductions of existing problems only by some tolerable proportion. Von Weisacher and Lovins (1997) have proposed a factor 5 reduction, which is possible via “technical fix”. However, this factor is clearly undermined by the contemporary requirements. Lovins claims that it is possible to double world output while at the while at the same time, halving the available resource. By 2050, the global output would be 20 times more than today and there for it would be impossible to provide the needed reduction by Factor 40. The assumption of technical fix is focused primarily on the use of renewable sources of energy. This would also eliminate the issues like Green House Gases. However, with this also there is a contradiction and it is believed that the availability of renewable resources and the utilisation of the sources like biomass would not be enough for fulfilling the needs of the people by 2050 (Trainer, 2007). 5. The Quality of Life The paradox of “Quality of Life” clearly supports the view of Prosperity without Growth. Literature including the work of Eckersley (1997) and Speth (2001) suggests that the increase in the Gross Domestic Product of the rich countries does not seem to contribute to the quality of human life. On the contrary, the quality of life seems to decline in the richer countries. This paradox raises the question that for what reason are we striving for economic growth. 6. Challenges The economy has grown in a massive way and is now at the verge of depleting resources. Most of the economical structures today are driven by growth and hence, in absence of growth, they won’t be able to operate. Growth cannot be removed while leaving economy as it is. Fotopoulos (2007) points out at the fundamental issue of de-growth. Latouche (2007) raises the concerns relating to growth and socio-economic system’s structural relationship. If these undesirable impacts were to be remedied, then it would be requiring a widespread and radical action and we would be opting for an entirely different economic system. Daly (1991) calls for changes such as the phasing off of wasteful production, curbing CEO salaries and escalating environmental restoration. However, this requires a massive change in business activity and it cannot be achieved without extraordinary state regulation, compulsion and involvement. A change in climate of opinion and political situation is required for the same. 7. Transition to a Sustainable Economy As per Barack Obama (2008), “In the end, this economic agenda won’t just require new money. It will require a new spirit of cooperation… We will be called upon to take part in a shared sacrifice and shared prosperity”. Jackson (2009) further adds that the economic crisis presents a unique and valuable opportunity to invest in change. The short-term thinking on economy and prosperity needs to be eradicated. It has plagued our society for decades and it is time to replace it with a potent policy-making which is capable of addressing the massive challenges of tackling the climatic change and ensuring the delivery of lasting prosperity. The Fair Trade initiative is an apt example to achieve sustainable economy. According to Brussels -Commission of the European Communities (2009), the Commission has adopted a communication for better environment [3] on public procurement, and this complements the Green Procurement Guide of the Commission. The aim is to provide solution for public procurement, which is sustainable in nature. Many of the authorities have thereafter called for the inclusion of “fair trade” objectives in the procurement policies of their tenders. However, it is not yet extensive enough to safeguard the ethical and ecological standards in line with the supply chains. 8. Conclusion A change in the social logic is required. There is a requirement of strong trading standards for dismantling the culture of consumerism. There is also a significant requirement of enabling a stronger trading standard in order to protect the citizens both as consumers and as workers. As per Daly (2008), ‘steady-state economy’ is the greatest need of the hour. In his book “Prosperity without Growth”, Jackson (2009 aims to surface the modern definition of prosperity in accord with ecological limits. Many economists have constantly contributed to the same thought. According to MacKenzie, The Limits to Growth (2004) puts forward the computer modelling of the unchecked population and economic growth with finite and limited resource supplies. Revisiting the speculation of collapse, they show that ceasing growth is the only alternative of human subsistence and prosperity. With the boom of needs and ecological exploitation, the only thing that would be achieved is nothing else than the doom of entire humanity. Hence, prosperity without growth seems to be the only aegis that we have in present era. 9. References Brussels Commission of the European Communities, (2009). “Contributing to Sustainable Development: The role of Fair Trade and nongovernmental trade-related sustainability assurance schemes” Daly, H. (1989), For The Common Good , pp. 1-2, Boston: Beacon Daly (1991). Steady-State Economy, pp. 75, 100, 102, 103; Washington: Island Press Eckersley, R., (1997). Perspectives on Progress; Is Life Getting Better?, Canberra: CSIRO. Fotopoulos (2007). “Is de-growth compatible with a market economy?,” The International Journal of Inclusive Democracy, Vol. 3, No. 1 Hansen, J., et al., (2008). “Target atmospheric CO2; Where Should humanity aim?”, The Open Atmospheric Science Journal, 2, 217 – 231. Jackson, T. (2009). Prosperity without Growth: Economics for a Finite Planet, London: Sustainable Development Commission Latouche, S. (2007). “Degrowth; An electoral stake?,” The International Journal of Inclusive Democracy,” Vol. 3, No. 1. MacKenzie, D. ( 2012). "Boom and doom: Revisiting prophecies of collapse". New Scientist. Available at http://www.newscientist.com/article/mg21328462.100-boom-and-doom-revisiting-prophecies-of-collapse.html. [Accessed Jan 20, 2013] Meadows, Donella, Randers, J. Meadows, Dennis (2004). “Limits to Growth: The 30-year Update”, available at http://books.google.co.in/books/about/Limits_to_Growth.html?id=QRyQiINGW6oC, [Accessed Jan 19, 2013] Meinshausen, M, N. Meinschausen, W. Hare, S. C. B. Raper, K. Frieler, R. Knuitti, D. J. Frame, and M. R. Allen, (2009). “Greenhouse gas emission targets for limiting global warming to 2 degrees C”, Nature, 458, Page 1158 -1162. Obama, B (2008). From a speech on ‘shared prosperity’ that Obama made in Janesville, Wisconsin, 13February 2008, online at www.barackobama.com/2008/02/13/remarks_of_senator_barack_obam_50.php. [Accessed Jan 11, 2013] Trainer, T., (2010), ”De-growth is not enough’, International Journal of Inclusive Democracy” Von Weizacker, E. and A. B. Lovins, (1997), Factor Four : Doubling Wealth - Halving Resource Use World Wildlife Fund (2010), Living Planet Report, available at http://wwf.panda.org/about_our_earth/all_publications/living_planet_report/. [Accessed Jan 20, 2013] Read More