Are we asking the right questions?

Only once in a while will I return to what I think is the central conundrum of business and economics today, growth. The vast majority of our society is probably only subcontiously aware of growth as the major driving factor of our current economic system. Those in the business and economics world are very aware that our system is about and demands growth. Then there is the very small group of progressive folks like those of us at BGI that want to create a truly sustainable world so that we, our relatives, kids and grand kids can actually have any sort of future at all, let alone one that is happy and hopefully equitable. However, I would say that even among us BGI types, growth is not something we are centrally concerned about. 

We must realize that the human race is already living far beyond the carrying capacity of the island called earth that we all live on. Our population is scheduled to reach at least 9 billion by 2050, and if our economies and consumption/affluence levels continue to grow at their current pace or faster, we will be looking at needing, not the current 1.5 earths minimally required to keep us going presently, but more like 6 to 9 earths depending on who is calculating. If all 9 billion people of earth from 2050 wish to live at the same levels of affluence of the developed world, which is a legitimate desire, then we would actually need 20 times the energy and resources that we currently use! Ted Trainer says, "The problem of Third World deprivation cannot be solved unless the rich world reduces its consumption dramatically and lives on something like its fair share of world resource wealth.  Yet its supreme goal is to increase its levels of production, consumption and GDP," in his paper titled "The radical implications of a zero growth economy." 

So, the problem is that our economic system, which we have spread to almost the entire globe at this point, requires growth. Growth is how we try to solve problems like unemployment, poverty, ect. Growth is the goal we aim for. Growth is what is required by our financial system which is structured to extract ever increasing levels of ROI, which is what Marjorie Kelly says, "puts the squeeze on public corporations." Growth is the result of a system which magically creates wealth when a bank makes a loan using the fractional reserve system. 

What should an economy strive for and measure and maximize? Purpose is definitely the right answer here (see Jill Bamburg's presentation at the recent BGI TEDx event), but even if our society was made up entirely of quadruple bottom line businesses, I think growth would still be an issue; capitalism requires it, our financial system requires it. In a recent book entitled "Enough is Enough" by Rob Dietz and Dan O’Neill, Herman Daly writes in the foreword, "Enough should be the central concept in economics. Enough means 'sufficient for a good life.'"

A system which is truly "steady state" or "no growth" will require radical changes. If we go back to Ted Trainer, he notes, "In the coming conditions of intense resource scarcity, viable communities will have to be mostly small, self-sufficient local economies using local resources to produce what local people need." I think that much of the "New Economy" movement has been driving in this direction if not explicitly for the reason of our little living way beyond the carrying capacity of the island earth problem. The movement recommends strategies such as place-based businesses which are truly rooted in a community and of an appropriate scale. Another strategy is in regards to finance; slow money, patient capital, and localized wealth creation and entrapment are reccomended. The strategy which my project team is most interested in is that of networks of mutually supporting worker owned cooperatives centered around a worker owned financial institution. 

We are currently researching the Evergreen Cooperatives in Cleveland Ohio. The lens through which we arrived at this decision was actually that of income and wealth inequality, something our current economic structure creates with high efficiency. This strategy of building multiple worker owned cooperatives in a local community, serving industry sectors which can benefit from import substitution and are centered around the community's anchor institutions, is a promising one both from the social and economic standpoint. More in depth information about the Evergreen Cooperatives can be found at www.EvergreenToolkit.org. 

I do not know if this strategy completely helps us to get to a steady state economy, but it is the best closest thing I have seen proposed and tried so far. Trainer says that in a new economy, "At least the main economic decisions would have to be made by deliberate social discussion, debate and planning...because this is the only logical alternative to leaving them to “free markets” and the owners of capital competing to gain." The network of mutually supporting worker owned cooperatives (also called Sustainable Community Economic Development) provides the infrastructure to create this kind of system made by "deliberate social discussion" and provides every member of the wealth producing mechanism ownership, governance and voice. I believe that this kind of radically democratic economic structure will have to be intentionally developed to suceed and displace the current system if we are to have any hope at acheiving real social and economic sustainability for the sake of the world. 

Its also super exciting! 

Ready, Steady-state, Go!

Tonight's journey started with a read of Norm's post, "The Implications Of A Zero Growth Society," which was more intriguing than I originally though it would be. He recaps some arguements and concepts having to do with creating a no growth, zero growth, or solid state economy. These movements and concepts are in reaction to the radical discovery that we live in a bubble which contains finite amounts of resources and fragile organic ecosystems with limited carrying capacities both for extraction of materials and for absorption of wastes. Norm notes that, "our global consumer culture, and the nature of our economic system is predicated on constant economic growth.  In order to address the problem of global warming we will need a different culture and a different economic system." Which is to say both that the need for a different economic system is great and that it would require a very radical change. 
Further down the rabit hole we go. Norm linked to a very interesting paper by Ted Trainer called, "The radical implications of a zero growth economy." Trainer's paper is very interesting as I have to admit liking the idea of a steady state economy, but also not really knowing much about what that would entail. As is implied by the title of his paper, this kind of economy would not look like ours with the simple adjustment of no growth, but would need to be radically different. He states, "It is not just a matter of getting to an economy that does not grow any further; the imperative is to reach a steady state economy in which production, consumption, investment, trade and GDP are very small fractions of their present quantities."
I would love to go into the deeper mechanics of a steady state economy at some other time, yet for now will instead point out some very interesting issues that come along with it. Inequality is a fond topic of mine. In this economic system we accept a large amount of economic inequality as legitimate or necessary or inevitable. Part of how we do that is because of the mythology that says anyone can be rich and live the American Dream if they just work hard enough. The other way we do it is through the mythology that economic growth is the way to eliminate economic inequality as it becomes the "tide which raises all boats." Trainer points out that economic growth is actually the concept and mechanism by which economic inequality is created and perpetuated. In a steady state economy everyone understand and finally acknowledges that the economic pie cannot simply grow forever, but instead is a fixed size. If this were the case then, "inequality would have to be addressed and dealt with consciously and deliberately, involving social decisions regarding distribution and fair shares...which again would involve a very different kind of society" notes Trainer. So in addition to being a solution to or a necessity of global climate change, the steady state economy might be a place where we all have to get serious about equity and finally have no greed inducing mythologies to hold us back. 
Another interesting tid bit about life in a steady state economy relates to what the purposes of social structures and the meaning of life really are. In our current system the meaning of our existence is tied to consumption and accumulation of wealth and material goods, and the social structures are for the purpose of facilitating those goals for a few, supported and made possible by the many. In a steady state economy, the purpose of social structures is to facilitate a meaningful and quality life. Trainer explicates that, "People would have to be concerned to produce and acquire only that stable quantity of goods and services that is sufficient for a satisfactory quality of life, and to seek no increase whatsoever in savings, wealth, possessions etc. It would be difficult to exaggerate the magnitude of this cultural transition."
Speaking of the cultural transition, I found this amazing speech by Christine Milne, a senator from the state of Tasmania in Australia. She is speaking about the kind of economy they need to build in Australia in order to create the world in which they wish to live. She asserts, “Surely it’s time that those who advocate economic growth derived from resource extraction and pollution as the major path be the ones labeled wacky, loopy, irresponsible, divorced from reality or connected to the CIA.” I wonder how long it will be before top elected officials are saying things such as this, and getting re-elected after doing something about it? I do not ask this rhetorically either. We must move not only beyond our false mythologies and conveiniently forgotten history of the evolution of these human created social structures brought about by power and those who wield it--not simply by "good" ideas benevolently implimented and with unintended consequences--but also beyond alternatives which leave the core structure of this system intact. We must create a system which facilitates true human happiness and harmony with our natural ecosystem.