Friday, 26 July 2013

Glimmers of growth are welcome, but only in the short run.

So the British economy "grew" by 0.6% in the last quarter, which I'm sure some Tory "perception managers" will shorty be telling us is an an improvement of 100% over the previous quarter. Wow!

I leave it to to others to make the obvious points that, as  students of the trade cycle well know, economies in recession do eventually recover, and that  without George Osborne's oxymoronic "expansionary austerity" policy the recovery would have been much quicker.  In the short run we must be thankful that those who are feeling the pinch most in this downturn will get a bit of relief.

In the long run, however, (and I hope I'm not dead before the political classes begin to make it more seriously), we must recognise that "Enough is Enough", that a per capita national income in the region of £25 000 is quite sufficient to provide everyone in this country with a comfortable lifestyle, and devise methods of sharing that largesse so that everyone has the means of fulfilling their aspirations.

Here is my review,  published in the latest copy of Liberator, of just one of the books that tackles this issue.

Enough is Enough by Bob Dietz and Dan O’Neill, Earthscan (from Routledge) 2103.  240 pages,  £12.99

Bob Dietz (American) and Dan O’Neill (Canadian but working in the UK at Leeds University) are respectively executive director and chief economist for the US based Center for the Advancement of the Steady state Economy (CASSE).  The book, subtitled ‘Building a sustainable economy in a World of finite resources’ is basically an account of the raison d’ĂȘtre of CASSE.  The 15 chapters, from ‘Have you had enough?’ to ‘Enough waiting’ deal with the problems of achieving a full and fair distribution of the world’s resources, work and products and the achievement of the possibility of fulfilment and happiness for all when we accept that the present solution offered by most political parties and financial institutions (yet more economic growth) is untenable, and that the need for an alternative is urgent.
There is not a great deal in this book that is new but it brings together the key findings of such as Tim Jackson (Prosperity without Growth),   Wilkinson and Pickett, (The Spirit Level), Peter Victor, the American Herman Daly and many others.  Each chapter is thoroughly indexed and it provides a comprehensive and highly readable account of the field.
Although some readers may be irritated by the use of American English and idioms (what on earth is a ’doohhickey’?) there is a good deal of readable anecdotal description to support the arguments, some nice touches of humour [“A Tobin tax (named after an influential economist, or a Robin Hood tax (named after an influential social worker”] and some amusing cartoons from
A major them of the book is that, although economic growth and  well-being go hand in hand from poverty levels to  middle income, beyond a certain point, which the authors  estimate to be around the equivalent of $US17 000 per head, further growth does not bring further improvements in the quality of life.  On the contrary,, the rising inequality which seems to accompany economic growth in most societies causes deterioration in community cohesion and mental well-being.  Nor can we rely on growth to improve the lot of the poorest: a rising tide does not in practice lift all boats.
The writers are concerned to limit population growth but, pointing out that the annual world population growth of 80m is almost exactly balanced by the 80m or so unintended pregnancies each year, they  mercifully content themselves with wider access to contraception rather than more draconian measures.  Whilst acknowledging, however, that a substantial proportion of the world’s population need further growth in order to reach a decent standard of living, the chapter discussing the ‘degrowth’ necessary in rich societies such as our own is rather thin.
The one chapter which I find unconvincing  is that on money, banking and debt.  The authors seem to be unaware of the measures by which governments control money supplies (or could if they tried) and wish to introduce a system by which money creation by bank debt should become illegal and currencies should have 100% backing. . .but with what isn’t clear.  A return to the “barbarous relic’ of the gold standard, perhaps.
At present economic debate in the UK is focussed on how to achieve fuller  employment and  prosperity for all, or at least more, through the resumption of economic growth.  There is little talk of greater sharing, and planned ‘degrowth’ to conserve resources and reduce pollution is barely mentioned.  The right-wing are obsessed with the alleged problem of handing on our debts to future generations.  To those  who want to look beyond the immediate to the real problem, of avoiding bequeathing to future generations an impoverished and sterile planet along with broken societies, this book is a useful introduction .

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