Thursday, September 2, 2010

Sustainable Growth as an Oxymoron

Many of the big players on the international stage think that "smart" or "sustainable" growth is the best solution to the big problems today. Not only a bigger pie, but a smarter recipe. Is sustainable growth indeed possible? Or are the terms self-contradictory, an oxymoron? Several years ago Tom and Ray Magliocci, the “Click and Clack” of the NPR radio program Car Talk, talked about morons and oxymorons. One of them had said that such and such a thing, such as an inexpensive Mercedes-Benz, was an oxymoron. “Who are you calling a moron?” replied the other. Yet there is something moronic about an oxymoron, particularly one like sustainable growth.

Herman E. Daly’s ecological economics places the world of economic production and consumption squarely within the constraints of the natural world ecosystem, and in so doing he critiques today’s economists’ emphasis on growth. If anyone doubts where contemporary economists stand on growth, they have only to review current government policy regarding the so-called great recession. Economic policy makers such as Federal Reserve head Ben Bernanke view growth as the remedy for the problems supposedly caused by a contracting economy. (The causes, of course, are far more fundamental, and they are bound up in the way people think about human beings, the natural world, property, rights, production, consumption, wealth, money, work, life, ethics, pleasure, and leisure, among other things.) Indeed, economists frame recessions in terms of growth versus contraction in the gross national (domestic) product. We must produce and consume our way out of this predicament, according to the economists. Produce more! Buy more! Spend more! Save less! Put people back to work making more product so that the cycle of growth and progress can continue. This is  neo-classical economics in action, dominating contemporary policy.

In his early writings, Daly argued that the economic world ought to be viewed as tending toward a steady-state (equilibrium) rather than continually progressing and growing. In so doing, he was following the consensus among ecologists that ecosystems tend toward states of equilibrium. (As I wrote earlier in this research blog, this consensus among ecologists eroded in the last decades of the twentieth century; but more on that later.) After the Brundtland Report, Daly began using the increasingly common term “sustainable development.” He did so in an interesting and characteristic way.

To back-track a bit, one of the reasons the term sustainable development has gained popularity is that its meaning can be understood broadly; that is, because it is capable of many interpretations, policy makers can find ways in which it suits their inclinations. The Brundtland Report did not define sustainability in detail, saying only that sustainable development is "development that meets the needs of the present without compromising the ability of future generations to meet their own needs." (This, of course, makes the strange assumption that the needs of future generations can somehow be known in the present.) In the nearly 25 years since the Brundtland Report, economists, environmentalists, ecologists, and to the dismay of many, corporate conglomerates have jumped on the sustainable development bandwagon.

Everyone wants to be green, today. My state public radio network, a non-profit corporation with employees and a Board, instituted an “evergreen friend” category of support. If instead of sending in a check after a telephoned pledge you agree to have a certain amount of money deducted monthly from your charge cards, you will "save a tree." It turns out that the trees saved would otherwise have gone to paper for fundraising letters, checks, and the like. How many trees can be saved by a few thousand evergreen friends? Ten? Two? I guess the idea is to have everyone do their part, however small. But the problem is much bigger than this.

Daly, predictably, has little use for such imprecision. In his textbook Ecological Economics, he explains what he means by “sustainable” in the context of “yield”; i.e., sustainable yield, as in a forest in which the re-growth exceeds the amount harvested or lost for other reasons such as disease and fire. In his more popular writings he takes great pains to define sustainable development in contradistinction to sustainable growth. He writes: “The term ‘sustainable growth’ when applied to the economy is a bad oxymoron” (“Sustainable Growth: An Impossibility Theorem,” in Valuing the Earth, edited by Herman E. Daly and Kenneth N. Townsend, MIT Press, 1993, p. 267). Obviously, if the economy is enveloped by a finite ecosystem there are limits to economic growth; when these limits are reached and costs of growth are greater than benefits, growth becomes “uneconomic.” But what about sustainable development? Daly thinks sustainable development is both possible and desirable. His argument is both subtle and clear, and it is worth taking some time to explore. I will do so in the next entry.

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