Transformation

A new economy for a regenerative society

Most of the products of our growth-addicted economy are useless, obsolete and unnecessary junk that do not contribute to our human purpose; on the contrary they impoverish, deplete and contaminate our eco-livelihood.

Carlos Cuellar Brown
30 January 2015
Time to end mass consumption. Flickr/Natalie Maynor. Some rights reserved.

Time to end mass consumption. Flickr/Natalie Maynor. Some rights reserved.

Humanity needs a wide set of solutions as it transits the transformative path to a regenerative society. In the enactment of this transition, motivation and heart-felt commitment are central to civil action. As economist Andrew Simms reminds us: “when there is commitment, extraordinary things can be achieved.” These extraordinary things are the kind of spirit and urgency we need to spread as we chart this transition forward. The need to envision a desired endpoint for a new economy is central to this new paradigm.

The old economy based on aggregate growth has become uneconomic and is highly energy reliant and dependent on the endless consumption of Earth’s resources; it is also based on unlimited aggregate quantification that leads to an unmanageable and oversized economy. “Growth economies”, writes Herman Daly, “become an absurdity when their scales grow beyond the biophysical limits of their subsets.”

Unlimited growth is impossible

Modern economists say that a robust economy is one that continues to grow and grow. What they are also saying is that the economic structure needs to keep bursting at its seams, growing imperviously to create new markets. This is impossible in a closed system like Earth. Unlimited economic growth is not only impossible but it is also reckless and not based on biophysical reality. However for two centuries, growth economies have set the course, pegged to standard measurements representing GNP or GDP and other utilities. These economic indicators promote a society whose primary objective is economic expansion, which leads to wasteful hyper consumption.

To facilitate this expansion, our foremost economic architects have persuaded us to diligently and incessantly consume under the illusion that markets demand rules. This belief encourages the idea of limitless energy resources to sustain economic growth ad infinitum. We have come to accept this and unquestioningly go along with this business as usual, maximising consumption and aggregating quantities of industrial products to our national and individual capital debt.

As soon as a society accepts this doctrine and believes that more energy carefully managed will always yield more goods for more people, that society becomes locked in the wheel of consumption. Economic Growth values objects and products over human beings. Most of the resultant products of our growth-addicted economy are useless, obsolete and unnecessary junk that do not contribute to our human purpose; on the contrary they impoverish, deplete and contaminate our eco-livelihood.

If the rest of the world lived by US consumption standards we would need 4.1 Earth footprints worth of land and energy resources to run the operation. Past a threshold of economic growth, ever diminishing marginal utilities lead a society to the underdevelopment of its people; increasing environmental and social costs. As an example we need not look far to the underdeveloped neighbourhoods creeping out of our inner cities and towns as poverty increases proportionally to the growth of the rich corporations and plutocracies running the global economy.

Over-consumption leads to higher demands on non-renewable energy. In this process we have degraded our environment and eroded our social fabric; eternal economic growth is a failed system with biophysical limitations and no understanding of thermodynamic flux. In this sense Andre Simms reminds us of the “tensions between the physics of growth and the economics of unlimited growth.” In theory limitless growth is modelled on an open system, but Earth is enclosed in finite limitations, fluctuating marginally as a planetary ecosystem. The eco-footprint of our over-consumption habits are compromising the balance of this steady state structure. 

Time to talk about consumption

Reformulating our consumption habits and behaviours must be paramount as we go forward with a new economic vision. Embracing the notion that we will gain in humanity while consuming less, focusing on the maintenance and servicing, on the restoration and preservation of what we already have.

Becoming engineers and designers, planters and healers, we have to de-materialise production and promote the maintenance and longevity of products, rethinking consumption and incorporating growth to other sectors that have minimum energy impact and maximum social significance. We have to consider and re-organise industrial production, protect food autonomy, energy self-reliance, and the opportunity for business reorganisation in self-management ventures and quality investment.

We also really need a major “ethos” transformation from the great economic architects of our times; they must help correct the belief that growth economies will solve our precarious economic state. As Ivan Ilich has written, “the belief that economic growth at all costs will eradicate poverty and improve our lives endlessly implies a contradiction in the joint pursuit of equity and economic growth. Energy and social equity grow concurrently only to a point.” The new economy would instead increment subjective wellness standards as we shift the emphasis from money and economic growth to an emphasis on team spirit, stewardship and social equity. In 2009, the German president went some way to summarising this view, implying that “we should stop our fixation on economic growth and learn to live with less.”

The aggregate growth economy reached a certain point and brought improvement to the human experience, beyond which it has now become un-economic. At this place increasing energy consumption lessens substantially the equity of life for all of us.  Signs of this destruction are everywhere on Earth. The perversity of GDP is killing our planet, making humanity less equitable, futureless and on the whole more miserable.

Through this transition to the new economy the oil based power sector will begin to run primarily on renewable energies. In this capacity we have to reformulate energy reliance and integrate more and more renewables into the old system as it readjusts. Big benefits and qualitative growth for society will come when we improve renewable energy transmission lines, eliminating spillage, increasing storage capabilities and smart grid technologies.

Economic growth is not the same as economic development. Economic development has more to do with increasing social equity and human wellness. This social development functions much like knowledge shares in open source economies. These economic activities are low entropy, low energy dependent and work horizontally to develop well-being, general knowledge, self-reliance and problem solving skills. 

For a new economy to develop qualitatively, its baseline must strive for elevating social minimum and lowering drastically maximums for privilege. It must measure what really matters. Our goal as a healthy society is to have an economy that maximises well-being. Social equity comes in many forms, beginning with the securitisation of education and knowledge, health care, shelter, food autonomy and other liberties.  But how do you measure qualitative development, wellbeing, or happiness? How do we adjust regional, national and global economies to measure personal, social and environmental well-being?

Some economists are using new ways to measure equity in their societies. Happiness indexes are now being used in many countries. For example instead of GDP or GNP standards, the small Himalayan country of Bhutan is measuring personal, social and environmental well-being with an indicator known as “Gross National Happiness”. In the new rationale for economic development we will re-enact the classical views, which saw human kind as adapting gracefully to finitude interdependent with a steady state planet.

The perversity of GDP

So we need to get off the GDP or GNP system and begin to adopt this new economy where growth only functions in the realm of qualitative development, and this might take the form of downshifting and de-materialising production. This involves us making efforts to “grow, gather, preserve and cook; to repair, reuse, recycle and mend. Going back to making (and making do) this heralds a return to higher levels of purpose and thus wellbeing” – unlike in the growth economy where we buy stuff so we can impress people we don’t care about. In the new qualitative economy we will rediscover the nurturing and caring of our neighbours and communities, and we will harvest and make stuff to give away, for the better whole of our extended families.

The new rationale of downshifting the economy includes the structures of business and government whom will shrink their jurisdictions and breakup into smaller self-regulating constituents. The neighbourhood scale of the new economy will need a political system involved in reshaping and empowering local forces of production. From this seed we can include regional, national and global sectors and components of a larger society: “the new system begins with self government of small communities, village by village, town by town, region by region.” On this scale, communities will re-discover the participatory democratic subsets that keep personal interest in check.

These fundamental points and others need to be summoned as we engage in the transition to a new economy; notable economists of our times – names like Meadows, Daly, D’Escoto, and Bello have given us lists and axioms from which to start. Although incomplete and in need of further discussion, I will attempt to summarise 10 points worth discussing.

1) Develop a new economic “ethos” that stands for the common good of Humanity and Earth.

2) Bring the economy back to its due place in the complexity of society, with internal markets that return the epicentre of business to community.

3) Develop technology that is sustainable and retrofitting. Ecological tax-reform with the implicit notion that resources extracted from nature deplete our bio-system and should internalise external costs. To ensure social equity we must put limits on resource mining. 

4) Shift and reorganise production to re-use, maintain, restore, re-cycle, and design robust products with high product lifetimes, revitalising production of goods at the community scale.

5) Drop our consumption habits and moving away from an oil, coal, nuclear-based economy, improving energy strategies that help transition to a renewable based power grid. We can achieve high penetration of renewables by improving energy storage, transmission infrastructure, new resources, variability and grid flexibility; eliminating spillage by increasing our storage capacity.

6) Move to 100% reserve requirements, eliminate the fractional reserve banking and downgrade central banks, putting capital in the hands of community and lending cooperatives and away from private banks and clearing houses. Enclose the remaining commons of rival natural capital in public trusts and management.

7) Democratise all orders and social subsets, generating participatory democracies inside each circle. Self-determination will flourish in a civil society who controls and supervises the private sector and state.

8) Limit use of resources to rates that ultimately result in levels of waste that can be absorbed by the ecosystem. (Daly 2005) Create biotechnology that harvests waste, regenerates biomass, biodiversity and atmosphere, creating top soils and healthy water systems. 

9) Prevent war economics and predatory derivations. This includes redistribution of privilege capital and an honest revision of private property.

10) Empower a spiritual vision of the world that gives back a sense of transcendence and wonder. Engage in our formidable creative labour during this rather brief and minute transit aboard diminutive planet Earth.  

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