Imagine an umbrella. Now, in your head, double it in size – is it twice as good? Now double it again. Do you like your new umbrella?
After that, think of a bucket full of water but with a hole in the bottom. Now using your imagination, make the hole five per cent smaller. Is that the bucket fixed?
Umbrella = good therefore bigger umbrella = better. Hole = bad so smaller hole = job done. This nonsense is, in a nutshell, what is wrong with the debate over the environment and economics, and it seems at times like everyone wants to play.
One of the spillovers from the IPCC’s report on climate change is a long and unresolvable debate about whether we fix the climate with economic growth or whether we do it with degrowth. Will a bigger economy reduce carbon faster or will a smaller one?
This is really a battle being fought between fetishists about whose fetish is the best fetish and frankly bears little relationship with reality. And it is unresolvable because neither fetish is actually answering the right question – which is how in practical terms do we do what we need to do?
The very short answer to this is to give up obsessing about size. The longer answer requires us to backtrack a bit.
Because it may surprise you to know that 100 years ago we didn’t talk about the economy. We had economics but we didn’t think of a thing called ‘the economy’. We had unemployment, we had banking, we had wages, we had goods in the shops, we had public infrastructure – but these weren’t thought of by the public as ‘a thing’ but different things.
It was the sudden shock of the Great Depression that drove a desire to measure ‘what was wrong’. A desire that resulted in a measure called National Income to provide a quick ready reckoner of how things were going, which gradually became Gross National Product and eventually Gross Domestic Product or GDP.
And while these measures quickly became incredibly popular as a shorthand, it wasn’t really until the Cold War that they started to take on their modern connotations – as the world descended into a global competition to decide ‘who was best’, GDP went from being a rough-round-the-edges ready reckoner to being a single unqualified measure of success.
This is the root of so much which is wrong with society today, because as soon as GDP became a magical single source of undeniable certainty about what success looks like (despite being no such thing), anything which made GDP bigger became a good thing in and of itself.
Of course, you can do absolutely all the wrong things to make GDP get bigger (for example introduce sub prime mortgages or sell cigarettes to children) but once you largely ignore actions in favour of a magical ‘success number’ it doesn’t really matter.
Let’s call it a Collateralised Debt Obligation for public policy, a single idea which politicians can trade in freely without ever really knowing what it is made from but which everyone seems to have agreed is super valuable.
Yet GDP is a lousy measure of what people actually want. As we’ve seen, people get made unemployed and wages fall yet GDP goes up. The environment is trashed, animals tortured in industrial farming and the nutritional value of food nosedives and GDP goes up. We drop bombs on foreign countries, turning them to rubble and killing innocents and – what do you know? – GDP goes up.
So we get the inevitable human backlash – if all these things happened because we got bigger, we’ll need to get smaller. But this is just a logical fallacy – if X is bad and Y is the opposite of X then Y must be good. It’s a logical fallacy that The Three Bears rumbled in the middle ages (for example, in relation to porridge, knowledge culturally appropriated by the fair-haired Goldilocks).
Both growth-obsessives and the degrowth movement have a giant mental block they don’t seem to be able to get beyond – that it really is about size when it really isn’t.
So let’s come back to climate change. If we insulate every house in Scotland (and we capture the value of this) we need to produce a lot of insulation materials (from biomass sources if we have any sense). That means growing more biomass and processing it into useable materials and that creates jobs. So does fitting it (a surprising number of jobs actually).
The same is true of transforming transport or decarbonising heating or changing how we do construction or rewilding our land. They’re all material- and labour-intensive so they all create growth – whether we like it or not.
But this does not mean growth solves our problems because at the same time we desperately need to consume and waste less. This does not mean sacrificing our comforts, it means meeting them in different ways by borrowing more things we only need sometimes, reusing and repairing much more and upgrading what we have. But since waste produces profit, reducing pointless waste reduces GDP.
If we did them right, both these things (upgrading infrastructure and diversifying our access to resources) would do two things exactly the same and one totally differently. They would both improve the quality of our lives, and they would both reduce the harm we do the environment – but one would increase GDP and one would decrease it.
The mistake growth fetishists (of both sorts) make is to ignore the first two things and obsess about the third, to ignore the outputs and outcomes and instead focus on the size measure we use as a proxy for other things. And as both groups battle endlessly for the ownership of a very bad idea, they between them manage to obscure a very good idea.
That idea is to reorientate our entire understanding of the economy away from GDP and back to outputs and outcomes like wages, cost of housing, availability and quality of products, health, psychological wellbeing, and environmental impact. Common Weal has outlined how to do this in Resilience Economics.
This is an easy-to-understand, simple and effective step for us to take – but dear oh dear, we do make it difficult for ourselves!