In place of growth: The case for pursuing a steady state economy

So here we are, in an implausible world. Implausible? Well, OK it does exist, but on all the indications, it shouldn’t because whichever way we look, our current economic and social context is untenable.  The economy is not delivering genuine prosperity and well-being, and it is debatable whether it did so consistently before the crash.  Our society is plagued with insecurity, division, inequality and a lack of authentic lived culture that gives meaning to people’s lives.  And most threatening of all, the ecosystem is collapsing around us, as a direct result of unprecedented human activity.

And that malaise is replicated in dominant thinking as refracted through the media and embodied in the policies and practice of all the large sectors of our society and economy.  Such ethical and conceptual bankruptcy means there is little in the way of a convincing narrative of what an alternative approach would be, capable of squaring the circle of social justice, ecological safety and economic viability.

It is that search for a convincing alternative policy framework, and narrative, that drives the approach of Steady State Manchester.

We identify two obvious shortcomings of the dominant story about what is good and how to secure it, with a view to turning these on their head in the search for better ways.

1)  Economic Growth

Growth of the UK economy (as measured by Gross Domestic Product – GDP) over the ten years to 2009 averaged 2.64% p.a. – an economy that doubles in size every 26 years.  It is generally assumed that around 3% GDP growth per annum is healthy for an economy and to keep people employed. Such growth has an environmental cost.

The ecological footprint of the UK is 4.71 hectares per person – that is to say we each depend on that area for our consumables, recreation, to absorb our emissions and so on. But the available ‘biocapacity’ of the UK provides less than a third of that (1.34 hectares) – a situation of “ecological debt”.  So collectively we are going on as if we had three and a half planets to live on, when we have just one (even globally we are using the equivalent of 1.5 planets).  But that is before any further growth. And all the evidence says that while it is possible for the economy to become less resource intense, that can only be done more slowly than the economic growth rate. (This is known as relative but not absolute de-materialisation of the economy).

In other words, unselective, aggregate economic growth – the standard policy mantra – is incompatible with ecological and climate safety, a point reiterated by University of Manchester climate scientist Kevin Anderson who has made it clear that “holding to even an outside chance of [the minimum safe global temperature rise of] 2°C cannot be reconciled with economic growth”.

And we also know that far from helping address the problems of our economy and society, since the 1960s , economic growth has not been associated with gains in life-satisfaction but with increased inequality, with areas of persisting severe deprivation, an unbalancing of the economy in favour of the South East, and far greater reliance on long international supply chains for most things we need.

But ending unselective, aggregate economic growth does not mean everything has to stay the same, or shrink.  Some sectors will need to grow – local food and energy production, for example, but also a variety of industries, old and new, that can offer decent jobs, fulfilling local needs, using sustainable production processes: a de-industrialised city is not part of the Steady State vision.

2)  Winning a Global Competition

Advocates of the growth model make a second dubious assumption: they emphasise ‘competitive advantage’, assuming that success depends on winning a global race, to attract capital and sell what we produce.  Yet we can’t all be winners, and the evidence to date indicates that the North West is indeed losing that race (even as it does better than places like Wales or the North East).  And anyway the idea is ethically wrong: for us to win other regions must lose. Is that really what we want – to cast others into poverty so we can prosper? And where does this capital for investment come from anyway?  Other regions – so why not use our own resources and invest locally?  It makes more sense to consider how we can generate more of our own prosperity locally, with local investment, local expenditure, local jobs and local production, de-linking relatively from the global economy rather than depending on it and then finding that such dependence is a barrier to change.

Steady State Manchester

The ideas of Steady State economics have been around since the early 1970s, and a considerable body of work has evolved in support; the ‘dissident discipline’ of ecological economics views the economy as just part of a larger ecosystem, rather than reducing the enviornment to a set of services and costs for a dominant economy that defines all other realities.  But most steady state and ecological economic thinking is relatively abstract, articulated in relation to the national and international levels.  The same could be said for much of the work of the European degrowth movement, a kindred development with some shared roots but a rather different trajectory and emphasis.  In Manchester some of us saw the need for something more local in focus, without succumbing to an extreme version of self-sufficient localism.

Steady State Manchester was set up in June 2012, to work on the practical implications of an ecologically safe economy that nevertheless prioritises social and economic justice and an economy that delivers the kind of ‘frugal prosperity’ implied by the ecological emergency we are living in. Our major statement, In Place of Growth was launched a year ago in November, 2012.  It expands on the arguments above, citing the relevant evidence.  We see its major contribution as presenting a vision for a steady state economy at the municipal and regional levels with concrete recommendations for the various sectors of our economic and social system from local government to business.

In Place of Growth includes sections on – redistribution and reducing inequality; debt, investment and the money system; measuring ecological, social and economic well-being; re-localising the ecconomy, reducing consuption and strengthening culture, and on influencing the broader context.

Needless to say, that work is not the last word and there was and is plenty more to do. Other work has focussed on practical solidarity with the majority world, ethical investment and banking, transport infrastructure and on local government economic policy.  We have focussed over the last year on building a network of people familiar with the ideas of a steady state society and economy, working together with organisations with similar aims (the conference on November 14th 2013, Rethinking Prosperity, is one fruit of that), and keeping open a dialogue with those with whom we disagree, but with whom we share common goals, for example on social justice (as in our engagement with Manchester City Council).  Many of our positive proposals, while consistent with steady state principles, will make sense to anyone interested in promoting local well-being, for example our proposal for a municipal green inestment bond as an intervention that bridges the crisis of the financial institutions and the need to construct a more ecologically benign infrastructure.

One of the biggest challenges we have faced is in defining those elements of the economy that should be developed – and how, in order that a post-growth future does not exacerbate the social divisions and deprivation that have been magnified under the policy consensus of the last 30 years.

On the ground we can see many fragments, practical experiments, each of which provides part of the answer.  We see part of our role as helping to connnect them together, both practically and conceptually, so they point the way to the kind of strategic policy that is needed at all levels locally and regionally (and beyond as well – we have to campaign to influence the broader realities too).

So as well as increasing our knowledge of what is being tried and what works, we want to help build the network of those who could be seen as part of the same movement towards a plausible reality, where people can thrive without harming the planet.
If this looks interesting to you, then do get in touch with us via our website or email steadystatemanchester@gmail.com .