Managing Without Growth: Slower by Design, Not Disaster by Peter A. Victor. Edward Elgar Publishing Ltd 2008.
Since the 1940s, gross domestic product (GDP) has become a widely-used concept for measuring the state of the economy of nations. Wikipedia defines GDP thus: Gross domestic product (GDP) refers to the market value of all officially recognized final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country’s standard of living. Economic growth is closely linked to rising GDP and has become the ultimate goal of most nations.
But GDP is at best an imperfect tool. It offers no information about how goods and services are distributed among the members of a society, for instance, and fails to consider many important variables such as unpaid housework or volunteer labour, or the cost of externalities such as pollution.
In Managing Without Growth, Victor looks at the meaning of GDP as a measure of progress and well-being and explores its flaws. He concludes that in the closed system that is Planet Earth, an open system such as a constantly growing economy is simply not feasible. Along the way, he examines many concepts relating to growth, including commodification, the consumerism required to keep the whole ball rolling, and price mechanisms as system regulators.
We count on our planet to support economic growth in three important ways. First, the environment at large is the source of raw materials, most notably the fossil fuels that drive our economy. Second, we rely on environmental services to provide a sink for our waste. We pour vast quantities of toxic wastes into the air and water and atmosphere and count on the environment soaking them up at no cost to us. Thirdly, we depend on the services the environment provides. Wetlands, for example, purify water. Forests act as the lungs of the Earth.
On all of these fronts we are reaching the limits of exploitation. An obvious example it that the easy to reach oil has been used up and we are moving on to deep-sea oil and bitumen oil extraction. Canadians destroyed the cod fishery and it is not reviving. Our pollution of the planet has reached extreme levels, with climate change being an obvious example of the results. And every year, we diminish the ability of the planet to serve us by mowing down forests and draining wetlands and otherwise damaging natural systems.
Has economic growth served us well? Victor points to evidence that beyond a rather modest level, increased income and material wealth does not correlate to increased happiness. Victor considers the three forms of consumption, useful goods, status goods and public goods and how each impacts happiness. He points to the writings of Richard Layard, a professor of economics and member of the British House of Lords, and offers an examination of what an alternative theoretical framework called HappyGrow suggests.
Victor goes on to consider some ways in which growth might be reined in. One possibility is reducing the number of hours in the work week to spread employment opportunities over a greater number of people while increasing leisure time.
Economic growth has failed to bring full employment to Canada. Nor has it reduced poverty or led to improved environmental management strategies. Beyond a basic level, it has not even led to widespread happiness. With many natural systems reaching crisis status, the need for stable state economics is immediate. Will we learn to manage without growth through a process of planned change, or will growth end through the onslaught of disaster?
Managing Without Growth reads like a textbook, which is probably not surprising as Victor is an economist and professor of Environmental Studies at York University. Though not an easy read, it does reward the persistent with an interesting framework of facts and ideas.