The Growth Illusion

What gets rewarded gets done. That’s an old business and HR management maxim, but it’s also one of the pivotal messages of The Growth Illusion, Richard Douthwaite’s thoughtful review of economic history and the paradoxical consequences of economic growth, published in 1992 and updated in 1999. The “what gets rewarded gets done” principle states that if you want to motivate people to change their behaviour, use a reward. Since the Industrial Revolution, and to a lesser extent since the Agricultural Revolution, those with disproportionate wealth and power have learned that the best way to protect and increase that wealth and power is to get the population addicted to growth — growth in numbers, growth in consumption, growth in debt to pay for even more consumption, and tolerant of the enormous waste and inefficiency such extravagant consumption necessitates. As Douthwaite shows by drawing on the lessons of history and a mountain of data on the lack of correlation between growth, production, consumption, health and well-being, the consequences of all this growth are:

• an economic system so dependent on continued growth that when it falters, it quickly slides into deep recession or even crippling depression
• increasing unemployment — an inevitable consequence of the unquenchable need to cut costs
• decreases in 11 of the 12 major indicators of human well-being*, as the numerous negative impacts of growth (pollution, stress, traffic congestion, etc.) take their toll
• enormous economic fragility as that growth relies on innovation to compensate for the resource scarcities it is continually creating

<>growing inequality of economic resources between rich and poor at every level of aggregation

• <>inability of local communities to be self-sufficient especially in times of economic or natural disaster
• higher levels of crime, social disintegration and physical and mental illness
• more and more economic power and wealth concentrated in fewer and fewer massive, grossly inefficient and bureaucratic large corporations
• the need for ever-greater government subsidies and bureaucracies to compensate for the dislocation, damage and inequities created by growth economics
• a severely damaged and depleted ecosystem, which requires more and more resource subsidies to keep productive, and which as it becomes more homogeneous, fragile and stressed, becomes vulnerable to sudden, potentially catastrophic changes that it can no longer compensate for

Ultimately such a system is unsustainable, even pathological. As Edward Abbey said, “Growth for the sake of growth is the ideology of the cancer cell.” Yet today the rewards for participating enthusiastically in the growth economy are manifold: higher salaries, more senior jobs, more material wealth, economic and political support, political funding and kickbacks, and with all these things, greater personal ‘popularity’. These are powerful rewards and incentives for trying to perpetuate this bankrupt system, and for denying its negative consequences and its unsustainability. Furthermore, these days it’s the only game in town: Alternative economic systems either have been discredited or are untested.

In the absence of better economic models, what are we to do? Douthwaite starts by laying out several social principles that must be accepted as the foundation for any truly sustainable economic system:

• the need to end or reverse human population increase
• acceptance of a responsibility to leave as healthy an environment with as many resources for future generations, as we inherited from past generations
• valuation of other people’s interest equally with our own
• acceptance that some things are priceless’ and hence off-limits to economic development — they must not be sold, bartered, destroyed or used up regardless of the economic ‘value’ this might bring

The new economy, he suggests, must be built bottom-up. It starts with “sustainable local economies that would produce the essentials of life from the resources in their areas and thus be largely self-sufficient and independent of each other. This is not to say that they would not trade. They would, but never out of necessity”. A local economy that needs to trade is an indication that it is, or will become in time, unsustainable…A greater diversity of diet, clothing, building materials and lifestyles [would result] just as in the natural world where species have their own ecological niches and avoid competing directly. Regional economies would develop by finding good ways to use the resources of their immediate areas to meet the needs of local people rather than the demands of uniform markets far away. New cuisines and vernacular architectures would develop and new cultures would be born, and remain sustainable…provided its population did not exceed its carrying capacity.”

Douthwaite sidesteps as political the issue of self-defence: How a self-sufficient and sustainable economy can defend itself from a covetous unsustainable one, without itself becoming unsustainable in the process. Each local economy would have its own currency and banking system for its own protection, and would prohibit investment in, or capital transfers with, unsustainable economies. All ‘profits’ would be reinvested in the community that produced them.

This is of necessity a highly oversimplified summary of Douthwaite’s arguments and the solutions he espouses. In addition to reading the book I would recommend the Sustainable Territories online dialogue that accompanied his online seminar on the book. His follow-up book on building strong local economies is called Short Circuit.

It seems to me Douthwaite’s Sustainable Local Economies are entirely consistent with Peter Brown’s Stewardship Society,  Ivan Illich’s anti-institutionalization model, Diana Leafe Christian’s Model Intentional Communities framework, and my own Natural Enterprise blueprint. All of these models are built bottom-up, designed to show a better way to live, to make a living, in harmony with the rest of life on Earth. None of them depends on global national leaders in politics, business and public institutions suddenly becoming conscious of the madness of their ways. Rather, they all follow Bucky Fuller’s famous advice: “to change something, build a new model that makes the existing model obsolete”.

* goods produced, quality of environment, leisure time, equality of income distribution, working conditions, ease of making a living, safety of the future, health, quality and access to culture and education, housing quality, spiritual comfort, strength of community and family