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]