Ben’s Strategy blog: Making economics the servant, not the master

9th August 2017

"An advanced city is not one where even the poor use cars, but rather one where the rich use public transport," Enrique Peñalosa, former Mayor of Bogota.

I’ve been reading the new edition of Tim Jackson’s Prosperity Without Growth. I read the first edition some years ago and this terrific, substantially rewritten version seems much clearer and easier to understand. This is partly because Jackson has perfected his arguments by rehearsing them so many times since then, and maybe I know more now about what he’s talking about.

I think however it’s also the way the financial crisis, politics and the approach to climate change have played out in the years since 2009, when the report that became the book was first released. The standard economic responses to environmental and financial crises have not succeeded and inequality and political unrest are rife. So maybe the book just seems more obvious. As Jackson points out in the prologue, what he writes about isn’t now just a fringe issue but an essential, almost mainstream discussion.

What is prosperity?

Jackson sets out the problems of growth and then seeks to redefine prosperity, using work that shows that beyond a certain point more income doesn’t increase happiness. Reducing poverty is crucial, but once you get to the level of the poorer countries in Europe, the gains from increased wealth are marginal (although being better off than your peers seems to matter). And he argues, along  with a long list of philosophers, writers and economists over the ages, that prosperity actually resides in such things as:

  • Physical and mental health
  • Entitlement to democratic and educational participation
  • Trust, security and a sense of community
  • Relationships
  • Meaningful employment and participation in society

The Problem of (no) Growth

Where I came unstuck is where Jackson tries to explain why, contrary to received economic opinion, a no- or slow-growth society won’t lead to a depression, mass unemployment and the accompanying social discord. His answer is that an economy that focuses on health, education, community and so on will be a services-based economy rather than a manufacturing/production-based one. This has a lower potential for productivity gains through technology and innovation: you can’t increase efficiency in an orchestra, a hairdresser’s or a nursing home, which rely on human engagement, as you can in a widget factory. So the slower growth will not reduce jobs as much, and the shift won’t be as bad as we think. This seems fair enough, but we’re still going to need food and various kinds of stuff in this brave new world: concert halls, scissors and beds, if nothing else. Can you have an economy solely based on services? Maybe I’m missing something…

However, it’s a great book and Jackson seems to me to recognise and state the key point, that the future society we need to build is going to be different to the current one. Continuing the way things are will lead to similar problems of overstepping the Stockholm Resilience Centre’s planetary boundaries. That this is seldom remarked upon baffles me. And an example came up again in a way in the UK Government’s recent announcement that they would ban new internal combustion engine cars from 2040.

Imagining a different world

Instead of changing what makes the cars run, we should be thinking about whether, where and when we need cars. They take a great deal of energy and carbon to produce; they cause other forms of pollution; they waste lots of valuable space in cities and towns; driving wastes time and causes stress; they cause health problems through accidents and lack of exercise. Of course they are advantageous for some people and some of the time: to move stuff around, to enable people with mobility problems to participate fully in society. But there’s an opportunity to rethink a whole series of things: how we plan our environment; where we put homes, workplaces, hospitals, shops and other facilities; how we plan public transport networks; when we work; and so on.

There’s an assumption that people want to travel by car. But backing up Jackson’s work, for my PhD research in Aberdeen I’ve analysed over 3,000 responses to surveys and held six focus groups, and I’m not so sure. People did travel to the theatre by car but were annoyed about parking – finding spaces and the costs – and they wanted to enjoy a drink during the interval. However the problems with public transport and elements of the urban environment being off-putting, particularly to women, made the car the obvious choice. Not because it was good, but because the alternatives were worse.

Even the technological answer of autonomous cars assumes a need for easy and largely private motorised mobility. Walking, cycling, public transport don’t get much of a look in but are arguably better for public and private health, both mental and physical. Perhaps because they don’t feed the economy: more walking doesn’t lead to increased GDP.

It’s not just the economy, stupid.

What Jackson seeks to do in Prosperity Without Growth is set out the economics of a post-growth society. And that’s hard because, as he points out, contemporary (although not all) economics assumes growth to be essential to the success of a modern society. But the sociologist John Urry argued that economics has had a stranglehold on thinking about climate change for too long and that other disciplines should join in. This is surely where the arts and culture feature: we need to imagine our new society, and then economics is useful to understand how to make it work. But imagining the unimaginable needs to come first, and that’s what artists do. (Interestingly, Jackson is a playwright as well as an economist – perhaps this is a job for him?)

We’re currently planning our 2018 Arts+Sustainability Residency which will take place in Aberdeen and be focused on the post-fossil fuel future for that city-region. We’ll bring an energy expert and a cultural producer together to help eight artists explore how that future might be shaped. We won’t solve the problem, but we may sow the seeds for future imagining that will make the job easier in future.

 

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