Category Archives: Economic growth

Economic Crisis Shakes Old Paradigms

“As our global economic and ecological crises converge, neither neoliberalism nor Keynesianism can cure what ails us.” (Source: Foreign Policy in Focus)

Excellent analysis of the flawed remedies for the twin economy-ecology crises by Walden Bello in Foreign Policy in Focus.

To analysts like Richard Heinberg, the intersection of the financial collapse, economic stagnation, global warming, the steady depletion of fossil fuel reserves, and agriculture reaching its limits is a fatal one. It represents a far more profound crisis than a temporary setback on the road to growth. It portends not simply the end of a paradigm of global growth driven by the demand of the center economies. It means the “end of growth” as we know it. It is, in short, the Malthusian trap, though Heinberg understandably avoids using the term.

The gyrations of the finance economy, he says, do not simply stem from the dynamics of capital accumulation but from an all-encompassing ecological disequilibrium. “Until now the dynamism of growth has enabled us to stay ahead of accumulating environmental costs,” he writes. But “as growth ends, the environmental bills for the last two centuries of manic expansion may come due just as our bank account empties."

Is climate change a euphemism for growth?

"One question that stops conversations cold is, ‘What if our greatest societal challenge is not climate but growth?’

Climate change is really just an ambiguous term or understatement for the problem at the root of our energy production and consumption, which is growth in energy use, economic/population expansion, and environmental degradation resulting in overshoot that is vulnerable to collapse.” (Source: Energy Bulletin)

Interesting reflections on how all the energy spent on dealing with climate change distracts us from the real root cause of our "great disruption".

When Growth Outpaces Happiness

It is startling to find that Chinese people’s feelings of well-being have declined in a period of such momentous improvement in their economic lives.” (Source: NY Times)

Richard Easterlin in NY Times: China demonstrates that "growth alone, even at sustained, spectacular rates, has not produced the kind of life satisfaction crucial to a stable society — an experience that shows how critically important good jobs and a strong social safety net are to people’s happiness."

Another piece of evidence that it is time for a new economic and social development model. Read on the same subject “Does economic growth make you happy?”, a Times Literary Supplement review by Robert Skidelsky of the latest book “Economics after the crisis” written by Adair Turner.

For those in Brussels interested in this topic, there is a great conference organised by the ETUI on 15-16 October: “From ‘uneconomic’ growth to future well-being

Climate change is already damaging global economy, report finds

Economic impact of global warming is costing the world more than $1.2 trillion a year, wiping 1.6% annually from global GDP… (Source: The Guardian)

By 2030, the researchers estimate, the cost of climate change and air pollution combined will rise to 3.2% of global GDP, with the world’s least developed countries forecast to bear the brunt, suffering losses of up to 11% of their GDP.

Read the press release published by DARA and the Climate Vulnerable Forum.

Neoliberalism, Degrowth and the Fate of Health Systems

"Degrowth recognizes that humanity’s access to the earth’s resources and services of the biosphere are constraints upon socioeconomic activity. It also holds that politics and economics cannot trump thermodynamic and ecological realities. It places the limits to growth and ecological overshoot at the center of the predicaments Homo sapiens confront. It connects to culture and political/economy through this root public policy question: How to equitably distribute a shrinking economic pie?" (Source: Health After Oil blog).

Must-read analysis by Dan Bednarz and Allana Beavis on what "the end of cheap energy and growth" means for Western health systems.

Monti, Hollande: “leaders” (losers?) stuck in their growth religion

“Italian premier Mario Monti and French leader Francois Hollande on Tuesday said Europe must urgently restore economic growth and create jobs as part of a wider plan to safeguard the 17-country euro currency union.” (Source: Foxnews)

Politically elected or technocrat, left or right – Europe’s elites remain stuck in old and failed ideologies (growth as the miracle cure) instead of preparing for the Prosperous Way Down. With a European Union like that, who needs the European Union? Time to prepare the alternative (which is not a “retour” to grand old nationalism by the way Smile ): Phoenix Europe.

Help our EU leaders awake from their naive dreams and send them this 8-minute video from the Post-Carbon Institute of Richard Heinberg: Who killed economic growth?

Social Innovations for Economic Degrowth

"… a growing community of scientists and social activists, sharing the basic insight that a reduction of energy and material use implies a reduction of gross domestic product (GDP), is gathering under the heading of sustainable degrowth.3 Degrowth obviously entails a fundamental transformation of economic structures. But what precisely are the necessary steps?" (Source: Solutions Journal)

Very good article in Solutions Journal on the need to scale up social innovations for sustainable degrowth if we want to move from the failing growth paradigm to a new paradigm of the good life.

Commons: Alternatives to Markets and States

"…what is emerging fast is the alternative of a commons based economy. Peer to peer, social sharing, collaborative consumption, commons, economic democracy are all terms that cover economic activity that moves beyond the market and the state, based on cooperation and harnessing human creativity." (Source: Energy Bulletin)

Excellent analysis by Derek Wall on the need to move to an economy of sharing, an economy of the commons as an alternative to failed socialism (state) and failed capitalism (market).

Suddenly, quantitative easing for the people seems possible

As some of the world’s top central bankers start to admit that standard quantitative easing is failing to generate growth, previously taboo ideas can be mentioned, including QE for the People, discussed here last week.” (Source: Reuters Blogs)

Interesting and provocative ideas from financial economist Anatole Kaletsky (author of "Capitalism 4.0"). Give the new money created by central banks to the people instead of the banksters.

The problem with Kaletsky’s potentially popular solution for our Great Depression? The money given to people should be used for new consumption. As in his famous book, Kaletsky does not question economic growth, the consumer society, inequality or capitalism. Worth reading nevertheless.

Degrowth, expensive oil, and the new economics of energy

"Expensive oil … does appear to be suffocating the debt-ridden, global economy, just as it is trying to recover …

Unfortunately, mainstream economists, including those in government, seem oblivious to the close relationship between energy, debt, and economy, and this means they are unable to see that expensive oil is one of the primary underlying causes of today’s economic problems. Consequently, they craft their intended solutions (e.g. stimulus packages, quantitative easing, low interest rates to encourage borrowing, etc) based on flawed, growth-based thinking, not recognising that the new economics of energy means that the growth model, which assumes cheap energy inputs, is now dangerously out-dated. When growth-based economies do not grow, household, firms, and nations struggle to repay their debts, and quickly things begin to unravel in undesirable ways." (Source: Energy Bulletin)

Excellent analysis by Dr Samuel Alexander of the links between global energy descent, rising commodity prices, the end of growth and the Great Depression.

From the conclusion of this report:

Economic growth requires energy, especially oil. Stagnating oil production, however, is happening at a time when demand is continuing to rise. This means that oil is going to get more expensive – a consequence already playing out – but it is not clear that our economies can function on oil prices much above $100 per barrel or when total oil expenditure exceeds roughly 5.5% of GDP. The exact figures can be debated, and will be debated. But a strong case can be made that the price implications of slow-to-negligible growth in crude oil production is causing the global economy to stagnate, leading, among other things, to the inability of many households, firms, and nations to meet their debt obligations. This is causing significant economic instability around the world, and as oil prices rise in the future the situation is probably only going to get worse. This is not a happy message to convey, but in order to respond to problems effectively it is important that first their gravity is recognised and acknowledged.”

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