Nothing Grows Forever

Image Gallery Gracia Lam / www.gracialam.com

Peter Victor is an economist who has been asking a heretical question: Can the earth support endless growth?

Traditionally, economists have argued that the answer is yes. In the 1960s, when Victor was earning his various degrees, a steady rise in gross domestic product (GDP)—the combined value of our paid work and the things we produce—was seen as crucial for raising living standards and keeping the masses out of poverty. We grow or we languish: This assumption has become so central to our economic identity that it underpins almost every financial move our leaders make. It is to economics what the second law of thermodynamics is to physics.

But Victor—now a professor at York University in Toronto—felt something tugging him in the opposite direction. Ecologists were beginning to learn that Earth does have limits. Pump enough pollution into a lake and you can ruin it forever; chop down enough forest and it might never grow back. By the early ’00s, the frailties of the planet were becoming even more evident—and unsettling—as greenhouse gases accumulated and chunks of Greenland’s glaciers began breaking off into the sea. “We’ve had 125,000 generations of humans, but only the last eight have had growth,” Victor told me. “So what’s considered normal? I think we live in very abnormal times. And the signs are showing up everywhere that the burden we’re placing on the natural environment can’t be borne.”

In essence, endless growth puts us on the horns of a seemingly intractable dilemma. Without it, we spiral into poverty. With it, we deplete the planet. Either way, we lose.

Unless, of course, there’s a third way. Could we have a healthy economy that doesn’t grow? Could we stave off ecological collapse by reining in the world economy? Could we do it without starving?

Victor wanted to find out. First, he created a computer model replicating the modern Canadian economy. Then he tweaked it so that crucial elements—including consumption, productivity, and population—gradually stopped growing after 2007. To stave off unemployment, he shortened the workweek to roughly four days, creating more jobs. He also set up higher taxes on the rich and more public services for the poor, and imposed a carbon tax to fill government coffers and discourage the use of fossil fuels. The upshot? It took a couple of decades, but unemployment eventually fell to 4 percent, most people’s standards of living actually rose, and greenhouse gas emissions decreased to well below the levels outlined in the Kyoto Protocol climate agreement. The economy reached a “steady state.” And if the model is accurate, then something like it, say some ecologically minded economists, may be the only way for humanity to survive in the long term.

Victor’s economic theory is radical, but he is not alone. Over the past few decades, a handful of scholars have been laying the intellectual groundwork for “no growth” economics, and several recent books have proposed design principles for a healthy, nongrowing global economy. Even some of the world’s major governments, spooked by the twin specters of climate change and the recent financial crisis, have begun exploring this seemingly subversive idea: In 2008, President Nicolas Sarkozy of France asked Nobel economics laureate Joseph E. Stiglitz to draft new ways to measure prosperity without relying on GDP as the main indicator. But what would a no-growth society look like? Would we like it? And could we build one?