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Change thinking on growing the economy

Being in a constant state of growth seems is held up as the goal for most governments and businesses as if there is no other scenario that can be considered. To question this is to be considered negative and out of step with being ‘normal’ within economic circles.  In this story: Why Australia needs to change its thinking on growing the economy, Ian Lowe (Brisbane Times, April 29, 2023) references mainstream economists who point out the flaws in this human centric way of thinking that discounts just about everything else that we value and consider essential for our future quality of life. Ian Lowe writes …

The evidence is clear that the present level of human consumption is damaging our future prospects. We are changing the global climate, driving a loss of species, eroding the productivity of our land, reducing the fish catch and reducing the availability of such essentials as fresh water.

In that context, aiming at further growth does not seem an intelligent approach. We should be prepared at least to think about alternatives. The late Professor Herman Daly came to a conference in Australia in 1977 to speak about his idea of steady-state economics. He argued that recent growth had done little or nothing to improve community wellbeing, while risking serious environmental damage.

I have followed with interest the work of Canadian academic Professor Peter Victor, whom I met when we both gave papers to the same international conference a decade ago. He said that he grew up believing the conventional wisdom that economic growth would alleviate poverty, provide full employment and enable us to address environmental problems. But he realised that 30 years of unprecedented economic growth had not achieved any of those goals.

Not only had economic growth failed to eliminate unemployment and lessen poverty, it had actually widened inequality and worsened environmental problems. So he decided to use the sort of economic models employed by the Canadian Treasury to assess the impacts of different approaches.

Later …

As Victor’s work showed, it is at least feasible to consider futures in which we don’t regard the economy as an end in itself and see maximising economic growth as the highest priority, one which overrides human rights, social cohesion and environmental integrity. We need to change our thinking about the economy, reflect on what is important to us and others, in particular recognising the most basic flaw in the common assumption that we can safely leave the level of environmental protection to the market.

Get the full story here.
This is an edited extract from Ian Lowe’s Australia on the Brink: Avoiding Environmental Ruin due to be published on May 1 as part of Monash University Publishing’s ‘In the National Interest’ series.