Can there be a sustainable capitalism?

Tim Jackson, photo by Graham Jepson -

The current financial crisis and subsequent world recession has pulled up short many who believed the growth-centric, consumer-driven market economy was unstoppable. And yet, teetering on the brink of total collapse, the colossi of the financial world were forced to beg cap-in-hand for handouts from politicians, while the developed nations were forced to stump up the cash to prop up ailing banks, insurers and manufacturers deemed “too big to fail”. The lesson is that economies are fragile: growth is unstable and cannot be predicted, while shrinking economies inflict a terrible fallout in terms of job losses, closures, bankruptcies and repossessions.

Fears of imminent environmental collapse, growing inequality and social breakdown have led to an upswell of opinion that unfettered laissez-faire capitalism is simply not up to the job of providing a stable, prosperous world for us all. One voice is that of Tim Jackson, head of the government’s Sustainable Development Commission and Professor of Sustainable Development at the University of Surrey. In a lucid and fiercely argued new book, Prosperity Without Growth, Professor Jackson shows how rampant consumerism has been encouraged as a mechanism to prop up economic growth, measured by the volume of goods and services moving through the economy – the GDP, or Gross Domestic Product. However, as material resources become scarcer, environmental damage increases unchecked and social inequalities grow more stark, Jackson argues for a new definition of prosperity, and a new economy structured around strict ecological limits that does not revolve around just “buying more stuff”.

Jackson is not the first to argue that GDP is neither an accurate nor useful way of measuring a nation’s prosperity. Just last month French President Nicholas Sarkozy accepted a report from top economists and thinkers including Nobel Prize winners Joseph Stiglitz and Amartya Sen that argued for a more human-centric measure of prosperity that prioritizes standard of life over strict economic output.

“For the first time this has put that we need an alternative way of measuring the economy on the international agenda – we need to change our performance indicators, because if we use the old ones we’ll keep on chasing the old targets,” Jackson says from his home in Farnham, Surrey.

“Measuring in a different way and creating policies around those measures is key to establishing a different idea of prosperity in our society.”

In order to step away from an unsustainable consumer driven economy whose raw materials, energy and ecological impact we can no longer afford, Jackson looks at defining prosperity in terms other than economic growth, like meaningful work, community relations, participation in society or creative endeavour. He calls this our ‘capacity to flourish’, as opposed to our capacity to merely add to the national GDP.

But he recognises there is a powerful ‘social logic’ that underpins the modern world’s obsession with material goods – one that will be difficult to change.

Sociologist Max Weber described in the 1920s the “iron cage” of capitalism, its dehumanising and alienating regimes that stemmed from the division of labour and factory work. Jackson appropriates the term to refer to consumerism, warning: “We are locking ourselves into these structures of production and consumption capitalism.”

Our buying obsession, however, is more complex than just competitive buying, buying for status or to keep up with the Jones. “All the anthropological evidence is that every society there has ever been has given this symbolism to possessions. We use them to participate in society, to create a sense of meaning, identity or belonging to social groups,” Jackson explains.

“For example Christmas, which often seems slightly obscene, is actually also us usurping material goods to express our sense of caring or relating to others, its all about gifts, both giving and receiving. Over the last 50 years, we have handed over all these largely social tasks to material goods.”

But as a bonus, encouraging such spendthrift urges has helped governments drive economic growth. “We might have a predisposition toward expressing ourselves through material symbols, but we are also exactly the kind of people needed – materialistic, consumerist – to keep the economy going,” he says.

Surely the ‘social recession’ being experienced in the West in recent decades, as we lament the erosion of our sense of community, is connected to the extent to which we have retreated behind our shiny possessions, away from real social relations?

“I think so,” he says, “and you could argue that they have in fact undermined them. From voter apathy and mistrust of politicians to lack of neighbourliness and community spirit – these things are connected. We need to create alternative ways to express identity, participation, and a sense of belonging outside these symbols, and develop a less commodified world.”

Some have already led the way, with Norway and Sweden banning advertising to children and the Brazilian city of Sao Paulo banning advertisements from an entire district of the city. Indeed, even Jackson himself has a sideline as a radio script writer and dramatist when he is not number crunching economics.

He identifies a fascinating, paradoxical but on some level self-evident truth: greater riches have not made the developed nations rose gardens. For example, Portugal is the ‘poor man of Europe’, but tops the happiness index of EU states. Using data from the UN Human Development Report, plotting nations’ household income against rates of happiness and well-being reveals a diminishing return – after a certain point, greater and greater wealth simply doesn’t make us happier.

Furthermore, a Defra study revealed that those in higher social grades with larger earning potential reported greater satisfaction in all aspects of their lives except one – a sense of community, lending some credence to the adage of “poor but happy”.

So while today’s economies strive to grow by producing more with less – less staff, less investment, less resources – Jackson sees our future as producing less with more – using less resources, making fewer things, and employing more people working fewer hours. Stripped of consumerist status anxiety, society can spend more time on growing, instead of time spent chasing growth.


[This article was originally published in The Big Issue, November 2009]


Transition Town Brixton

Brixton Pounds

“One of the failings of the environmental movement is thinking that the best way to get people to change is to give them a sufficiently depressing leaflet so they think: hell, that’s terrible, I’d better go and plant carrots.” For an environmentalist, Rob Hopkins has some strong views about environmentalists. “We need to find other ways to engage people and get them involved,” he said.

Ways, he suggests, that might mean planting vegetables or might mean issuing a local, alternative currency – as seen with the launch of the Brixton Pound and Stroud Teasel last month. Going so far as printing an alternative to Sterling might sound like a scene from Passport to Pimlico, but it’s all part of Hopkins’ plan to tackle climate change, neighbour by neighbour.

When he states bluntly that “there won’t be any planes in fifty years” it seems a pretty bold statement. But the 41-year-old lecturer, co-founder of the ‘Transition Town’ movement that has spread across Britain and the Anglosphere, has spent years designing methods to cope with an oil-free future – in which getting a fully laden aeroplane off the ground may be just too expensive.

“Without fossil fuels, generating electricity is hard – the priority is going to be keeping the lights on and infrastructure going, not travel,” he explained. “In fifty years, we’re going to need to go to bed every day having locked up more carbon than we’ve produced. How we do that is a huge, huge question.”

His Transition concept has in only four years taken hold in more than 100 cities, districts, towns and villages in Britain and the Anglosphere, parts of Europe, South America and China. It has even reached Ambridge, the fictional rural town setting for long-running BBC radio show The Archers.

Transition holds that communities must re-orient themselves around local resources, producers and consumers in order to create local economies more resilient to any future shocks. Such ‘resilience’ might seem a smart proposition in light of the recession that has thrown hundreds of thousands of people out of work, bankrupted businesses large and small, caused runs on banks and highlighted the precariousness of Britain’s financial-institutions-and-callcentres-only service economy.

An oil-scarce or even oil-free future will ensure that flying in freight from abroad will become hugely expensive – perhaps even impossible – making it all the more vital for communities to be able to meet as many of their own needs as they can.

Hopkins said: “I don’t think anyone is saying that Transition will be enough on its own to save the world from runaway climate change. We need international legislation, government and local authority action. But community involvement has to be central, not just lip service.”

Critics state the Transition model is too vague, doesn’t go far enough, or leaves fails to address the root of the problem – seen from some quarters as capitalism itself. Green author Ted Trainer made these criticisms, adding that the only solution was “an Anarchist form of government”.

“People tend to bring their backgrounds with them to the transition movement, so ‘deep greens’ might say they have to remove capitalism first,” Hopkins said. “I feel if that’s the case we may as well not bother. A lot of people in the environmental movement have very little awareness of how little such a radical perspective appeals to people.

“We have to take out all these value judgements – cars are bad, capitalism is bad. We don’t have to convert everyone, people don’t have to change their whole job or their life, just enough to help rather than hinder.”

As one of Transition’s means to get people involved, issuing local currency ticks many boxes: it gives prominence to local businesses and producers, encourages consumers to spend locally, and forges closer links among the community. As it cannot be banked and is worthless outside the area, such currency re-circulates within the local economy instead of leeching into the pockets of large companies’ shareholders or City finance institutions.

While the Brixton and Stroud schemes join others in Lewes, Totnes and the Eko, used in the Scottish ecovillage of Findhorn, these are not cutting edge pioneers. Alternative currencies have existed for centuries: set up in 1934, the 65,000 members of the Swiss wir scheme trade the equivalent of 1.6bn Swiss Francs annually, the town of Berkshire, Massachusetts has issued $1.5m of Berkshares in only a few years, and the Lewes Pound itself existed once before between 1789 and 1895.

While not met with universal enthusiasm (“Monopoly money”, was one Brixton market trader’s dismissive response), 100 businesses signed up to the Brixton Pound including cafés, market traders and restaurants, a department store, shoe shop, record shop, caterer, bars and pubs, an off licence, computer shop, estate agent, builders, plumbers, a solicitor and a bellydancer.

Josh Ryan-Collins, co-founder of the Brixton group, said that the haulier’s petrol strike in 2000, with supermarkets only days from food shortages, showed the dangers of an oil crisis. Local currency taught “the democratisation of money”, he said. “It gets people thinking about how money can have an effect. It de-mystifies money and shows how it’s not just a neutral tool for exchange, but that it can also embody the values you give to it.”

He added: “And it’s fun – I’ve met hundreds of interesting new people. It’s changed the way I think about Brixton.”

Patrick Crawford, from the Lewes Pound, said at launch last year the group hoped for 30 businesses and around 100 shoppers using the currency, but now has signed up more than 150 businesses and 40,000 notes in circulation. “Some traders offer discount as an incentive, but I feel a sense of pride and independence using it,” Crawford said. “I enjoy using it because I can.”

What stood out, Crawford said, was how members of the group had come together under the Transition banner to start the ball rolling, without government or council involvement. “For example, Lewes had an energy discussion group, out of which we spun-off an energy company employing people to do insulation and glazing and carrying out work with grants on behalf of the council. The groups are filled with people actually interested in doing things, which is how thing’s get done. It’s very grass roots.”

The Lewes Pound notes bear the image of libertarian and reformer Thomas Paine, who lived in the Sussex town between 1768-74. Beneath are his words, as resonant then in the time of revolutions as they are now: “We have it in our power to begin the world anew”.


[This article was originally published in The Big Issue, October 2009]