Why growth might kill us

I  find Pope Benedict’s frequently repeated view of capitalism — that it cannot be trusted — quite fascinating. Recently he said that the recent global financial breakdown had demonstrated the “fragility” of the current economic system. He added that the market was not “capable of regulating itself apart from public intervention and the support of international moral standards”.

It reminded me of a paper I read some years ago by a fellow called Peter Russell, on the heady issue of whether economic development and growth were sustainable. I flicked through it again, and found it twice as scary now as it was all those years ago.

Peter Russell was one of the first people to introduce personal development seminars to the world about a quarter of a century ago. His point is that the only truly sustainable economy is one with zero material growth.

In recent times, he says, the more developed nations have been experiencing unprecedented economic growth. The average Westerner consumed 100 times the resources of a person living 200 years ago, at the dawn of the industrial revolution.

Over the same period the population increased by a factor of ten. Combine these two growths, says Russell and the result is a 1000-fold increase in consumption, and with it a corresponding increase in waste and pollution.

Both these growths are set to continue. The human population is expected to double over the next three decades. That means not only twice as many mouths to feed and bodies to house, but also twice the industrial production, twice the consumption and twice the pollution. And this would be the case if there was zero per capita industrial growth, which is highly unlikely.

Continued economic growth has made a few people richer and a lot more poorer. In 1980 the average company CEO earned 42 times as much as the average hourly-paid worker. A decade later the CEO earned 157 times as much, and now probably three times that again. Third world debt is increasing by 10% a year and doubling every seven years.

Russell refers to R Douthwaite’s book, The Growth Illusion, and his notion that “the sooner growth is dropped from our thinking and we revert to setting ourselves specific and finite objectives that lead towards our steady state, the better our future will be.”

A few years ago Herman Daly of the World Bank put it more bluntly: “It is obvious that in a finite world nothing physical can grow forever. Yet our current policy seems to aim at increasing physical production indefinitely.”

But, says Russell, zero growth is far too uncomfortable for most economists and politicians to accept. Not to mention shareholders. Western capitalism cannot survive without growth; national and corporate economies are compelled to expand if they are to avoid collapse. And here, lies the fundamental conflict.

We want to ensure the future of humanity, says Russell, yet we also want to ensure the continuation of the very system that is contributing to its downfall. A bit like going to the doctor and asking him to heal you but without interfering with your drinking, smoking, stress-producing lifestyle and over-the-top cholesterol count.

Another thing that worries Russell (and scares the daylights out of me) is his determination that interest is as equally unsustainable as growth and development.

He kicks off by pointing out that for centuries interest was outlawed by the Catholic Church; it is forbidden by the Qu’ran and, says Russell, there are several Islamic countries that today forbid their banks to charge interest. The accumulation of compound interest, he argues, is unsustainable in the long term.

Secondly, he says, it is those who have money who lend it and those who haven’t who need to borrow and pay interest.

Third, interest is wanting something for nothing. The act of lending money involves no input of human labour. It is, says Russell, the old time desire for a free lunch. This chain, he says, all depends on economic growth. Given the disastrous long-term implications of continued economic growth, we must question whether the charging of interest is compatible with the goals of sustainable development. If not, we must seek to create a radically different system, he says.

Well, whether you agree with Peter Russell or not, these arguments are fascinating, to say the least. They are guaranteed to create lively discourse at the Sunday lunch table but, hopefully, not that lively that it puts you off your pudding.

My only comment on all this, is quite simply, thank God for God.