We continue the serialisation of our intervention, The Viable Economy with the sections on Growth and Resilience. But you can download the whole pamphlet as a pdf file, here.
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The way our economy is organised at present is unviable because it is dependent upon growing in size endlessly to sustain itself and maintain a semblance of social stability. This growth, at a preferred three percent per year is exponential, growing like compound interest. Three per cent per year would mean an economy that doubles in size every 27 years, or increases eight-fold in an average Western lifetime. It is not surprising that critics of economic growth liken it to the pathological growth of a tumour, rather than healthy growth that reaches a natural limit.
This requirement for infinite growth is ecologically unviable because there is not evidence that it is possible for economic activity to be separated (decoupled) from the amount of physical material moving through the global economy1. It is therefore incompatible with the finite nature of the planet and the environmental resources which support human life, depending on the destruction of ecological abundance and the capture of value from regions of the majority world2.
The viable alternative
A viable economy requires that we re-design the economy to ensure economic activity is based on what is socially useful and restoring and maintaining ecological assets. Measures and projects of ‘good growth’ and ‘green growth’ are not sufficient; the viable economy is only ecologically viable when it is able to function without growing in overall size.
The viable alternative is socially preferable. Real increases in productivity and technological improvements must be better shared with society as real improvements in quality of life. This includes reductions in working time and increasing opportunities to undertake activities that need not make a profit but have value for individuals and communities.
Some viable policy ideas
Many aspects of the unviable economy require radical reform at the national and international level: campaigning on those fronts is essential to change the context in which the local economy operates. But there are policy options for regions such as Greater Manchester to pursue a more viable economic path, and in doing so to both prefigure the change required and develop resilience to likely future economic shocks and energy scarcity. These are covered in the following sections where we review each key aspect of the viable economy in turn.
Our unviable economy with its monopolies, just in time supply chains and reliance on oil inputs, is not resilient. Economically, it goes in cycles of boom and bust, most recently in the form of unsustainable credit and property bubbles. We rely on long and vulnerable supply chains for our food, energy and other goods. Socially, it simultaneously over-works and over-rewards some while rendering others ‘surplus to requirements’ and condemning them to a life of poverty and desperation; this damages everyone’s mental and physical health. Ecologically, it requires ever increasing resources and production of waste, making the planet an unsafe place to live. Taken together this means we have limited ability to withstand and recover from various kinds of systemic shocks. The shocks could be ecological – for example from slowly or rapidly changing climate affecting our food sources; economic – for example from sudden ‘melt-downs’ of the global financial system that enables international trade; political – for example from wars, industrial action or actions by energy- exporting countries3). We believe that, as a result of these “geopolitical risks”, our population is far more vulnerable than it appears from its apparent prosperity4.
The viable alternative
A viable economy places the values and practices of stewardship at its core. This means treating the earth’s resources not as something to be extracted and consumed, but as something to be looked after while borrowed. The same goes for human resources – people are not born to be exploited, nor to consume but to live meaningful and satisfying lives in social harmony and solidarity. In rebuilding our social and economic systems the viable alternative seeks to use the principles of ecological resilience.
Ecological principles of resilience
Resilience is defined as the capacity of a system, community or individual to absorb disturbance and reorganise while undergoing change, so as to still retain essentially the same function, structure, identity and feedbacks5. This depends on at least four dimensions including:
Diversity – the variation within the system. A field of one crop is more vulnerable to pest attack than a field of mixed crops.
Modularity – the extent to which the system is broken up into relatively autonomous subsystems. The size and interdependence of financial institutions intensified the impact of the banking crash of 2008
Tightness and damping of feedbacks – the speed with which the system can respond to disturbance without over-compensating.
Redundancy – the extent to which the system has duplication of elements. If you are growing one lettuce and the slugs get it, you have no lettuce. If you have several plants you can afford to lose one.
However, the resilience of human settlements and their economies also depends on their social relations, which cannot be reduced to the economic. It is the values and practices of mutuality, cooperation and solidarity that make for an economically resilient society.
Some viable policy ideas
Reduce our demand for food, energy and other resource use through cutting out waste, increasing product life, re-using and recycling, developing incentives and sanctions to support all these things.
Shorten supply chains by producing more of our food, energy, clothes and other requirements more locally.
Radically increase the rate of retrofitting of buildings to reduce fuel demand.
Devise collective energy purchase schemes that incentivise lower unit levels of energy use.
Work to help people identify less in terms of material possessions and more in terms of a culture where conviviality is central.
Teach, demonstrate and incentivise the practices of stewardship – for example the repair of clothes and electrical equipment, and food growing.
Support (technically, politically, economically) local communities to plan and manage their own regeneration, increasing people’s stake while shortening the chain from the emergence of problems to their solution.
Incentivise cooperation – for example in the award of grants for community amenity improvements and business development.
Promote practical research on increasing the diversity of our food resources6.
1 Steady State Manchester (2012) In Place of Growth, http://bit.ly/1bTiASu pp. 18-20. and Jackson, T. (2009). Prosperity Without Growth: the transition to a sustainable economy. London: Sustainable Development Commission. http://bit.ly/1tXp35t
3 As happened in the 1970s with the OPEC oil price shock.
5 Walker, B, Hollinger, C.S., Carpenter, S.R. and Kinzig, A. (2004) ‘Resilience, Adaptability and Transformability in Social-ecological Systems’, Ecology and Society 9 (2) p.5.