Prosperity Without Growth: Economics for a Finite Planet

Throughout this book, Jackson tackles the questions of: What is prosperity? Can greater prosperity be achieved without eroding the basis for the well-beings of others now and in the future? If so, how do we move towards systems that promote prosperity within the confines of a finite world?

In answering the first of these questions, Jackson heavily relies upon the theory of prosperity as possessing the capabilities for flourishing, that is “how well are people able to function in any given context” (p41). Jackson claims, “A prosperous society can only be conceived as one in which people everywhere have the capability to flourish in certain basic ways.” These “certain basic ways” follow the central human capabilities defined by Nussbaum (2006, Frontiers of Justice: Disability, nationality and policy design): life; bodily health; bodily integrity; senses, imagination and thought; emotions; practical reason; affiliation; other species; play; and control over one’s environment. Jackson accepts this list, but clarifies that they are not “a set of disembodied freedoms” but rather “a range of ‘bounded capabilities’ to live well –within certain clearly defined limits” (p45). Capabilities are bounded, according to Jackson, “on the one hand by the scale of the global population and on the other by the finite ecology of the planet” (p45). Ultimately, this brings Jackson to define prosperity as, “the ability to flourish as human beings –within ecological limits of a finite planet’ (Chapter 12).

With this definition in mind, Jackson makes two different points about the role of economic growth in regards to the second question. First, Jackson argues and provides evidence that, despite its prominence in metrics and policy priorities, economic growth is not the same thing as rising prosperity. Jackson refers to Kasser’s statement, “materialistic values such as popularity, image and financial success are psychologically opposed to ‘intrinsic’ values like self-acceptance, affiliation, a sense of belonging in the community. Yet the latter are the things that contribute to our well-being. They are the constituents of prosperity”. Second, Jackson points out the detrimental effects economic growth, and consequently increased throughputs, have on the environment and ecosystem services that are critical to current and future well-being. Jackson argues that though decoupling–reducing the ecological intensity per unit of economic output–is vital, there is little to no evidence that absolute decoupling is occurring and will achieve ecological targets without reducing growth in population and income per capita. With evidence that economic growth does not guarantee increased ability to flourish, but does push against the ecological limits we must operate within, Jackson calls for the dismantling of “this materialistic vision of prosperity” (Chapter 9).

Despite this call, Jackson does recognize that, because it is so entrenched in our current economic and social systems, economic growth does promote prosperity indirectly through economic stability and as a means for social participation. Considering the relationship between economic growth and stability, Jackson explains, “…the dilemma of growth has us caught between the desire to maintain economic stability and the need to remain within ecological limits. This dilemma arises because stability seems to require growth, but environmental impacts ‘scale with’ economic output: the more the economy grows the greater the environmental impact–all other things being equal’ (Chapter 8). Further, “We have no models for how common macro-economic ‘aggregates’ (production, consumption, investment, capital stock, public spending, labour, money supply, and so on) behave when capital doesn’t accumulate” (Chapter 8), but the assumption is that “the modern economy is structurally reliant on economic growth for its stability” (p14). Economic stability, including job security, does contribute to prosperity partially through providing ways for people to participate in society. Jackson also argues that consumerism is so entrenched in our social interactions that income, consumption, and the status they generate have become means for participating in the life of society, gaining a sense of identity, meaning and purpose, and defining our dreams. In these ways, economic growth is linked in a strained fashion to prosperity through both the current social and economic systems.

Consequently, both the economic and social systems must be addressed if we aim to promote prosperity within the confines of a finite world. Jackson outlines two specific components of change:

1. Need to fix the economic system, to develop a new ecologically literate macro-economics, a resilient economy–capable of resisting external shocks, maintaining people’s livelihoods and living within our ecological means–is the goal we should be aiming for here.
2. Shifting the social logic of consumerism. This change has to proceed through the provision of real, credible alternatives through which people can flourish…They must also provide capabilities for people to participate fully in the life of society, without recourse to unsustainable materialistic ways. (Chapter 10)

These changes require government action: “A transition from narrow self-interest to social behaviors, or from relentless novelty to considered conservation of things that matter, can only proceed through changes in underlying structure, changes that strengthen commitment and encourage social behavior. And these changes require governments to act.” Jackson points out, for those who would argue this is not the place for government, that policy decisions have routinely promoted growth and consumerism and that “A state framed narrowly as the protector of market freedom in the unbounded pursuit of consumerism bears no relation to any meaningful vision of a social contract” (Chapter 10).

Finally, Jackson outlines concrete steps to build the systematic changes needed:

1. Establishing the ecological limits

(a) Resource and emission caps and reduction targets (contraction and convergence)

(b) Fiscal reform for sustainability (ecological tax reform)

(c) Support for ecological transition in developing countries

1. Fixing the economic model

(a) Developing an ecological macro-economics

(b) Investing in jobs, assets, and infrastructure (Cinderella economy)

(c) Increasing financial and fiscal prudence

(d) Revising the national accounts

1. Changing social logic

(a) Working time policy

(b) Tackling systemic inequality

(c) Measuring capabilities and flourishing

(d) Strengthening social capital

(e) Dismantling the culture of consumerism

These changes promote an economy that delivers prosperity –the capabilities for flourishing within the ecological limits of a finite planet. “The means to livelihood, perhaps through paid employment. Participation in the life of society. A degree of security. A sense of belonging. The ability to share in a common endeavor and yet to pursue our potential as individual human beings’ (Chapter 12).

Ultimately, Jackson identifies three areas where more efforts are needed: development of an ecological macro-economic model, refinement of specific policy asks, and recruitment of a political “champion”.