Kate Raworth: A New Economic Model Based on Planetary Boundaries Instead of Continual Growth

Donut Economics

VPRO (2017)

Film Review

In this documentary, Dutch filmmakers interview British economist Kate Raworth about her proposal to create a new economics that focuses on planetary boundaries instead of continual economic growth. Raworth argues that the world already has all the technological know-how we need to transition from fossil fuels to 100% renewable energy. However our archaic economic models will continue to favor massive resource extraction and waste accumulation so long as government policies continue to favor growth over sustainability.

She believes that state intervention is needed to develop a new circular economy that will minimize resource extraction and waste production. Her ideal is to establish collaborative networks between manufacturers that enable them to recycle their products when they wear out or break down of dumping them in landfills and the ocean. The “donut” Raworth uses to illustrate her economic model calls for sufficient economic activity to lift people in the donut hole out of extreme poverty and oppression without overshooting planetary boundaries (by increasing carbon, particulate, and toxic pollution and exacerbating species extinction).

The filmmakers ask her to comment on two existing manufacturers that incorporate this circular approach to waste. The first is a Dutch company that “rents” jeans instead of “selling” them. When they wear out, the customer returns them to the factory to be recycled into new jeans. The second profiles a  Dutch company that reclaims gold, silver and scarce earth minerals from used cellphones and circuit boards.

 

 

How Economic Growth is Destroying the Environment

Growing Pains: The Ecological Costs of an Insatiable Economy

Al Jazeera (2019)

Film Review

This film begins by linking the new concept of GDP (Gross Domestic Product) introduced after World War II) with the popular myth that ever increasing GDP is a magic formula for preventing recessions and depressions and the mass unemployment and misery that accompany them.

Following the second world war, western countries experienced three decades of 8% GDP growth, resulting in near full employment and massive expansion of their middle class.

Unfortunately by the 1970s, most of western society had acquired all the cars, TVS, fridges and washing machines they could ever use; growth stalled and unemployment started to rise again. It was around this time the elite round table group Club of Rome* first questioned whether unlimited growth was possible on a finite planet.

In the 1980s, Wall Street’s answer to stalled growth was monetarism, a belief they could stimulate growth and prevent recessions by deregulating the the financial industry and simply controlling the money supply.

Instead of relying on the production of goods and services to increase growth, western economies began relying on the creation and trading of financial products (credit cards, mortgages, currency exchange, commodities futures, debt-based bonds, options and other derivatives) to keep the economy ticking over.

This seems to to work pretty well until 2008. Global growth collapsed that year and never really recovered.

The film directly challenges, from several perspectives, the pro-growth hype put out by various financial gurus. First they look at the heart breaking ecological damage wreaked by skyrocketing growth in Brazil’s Amazon rain forest. Next they examine evidence that the creation and trading of financial instruments is actually glorified gambling and speculation (in which winners have become fabulously wealthy at the expense of most of the middle class). And finally they talk to psychologists who challenge Wall Street’s claim that human beings have an endless desire to accumulate more useless stuff.

In my view the film’s major weakness is its failure to link the pressure for perpetual growth to our debt-based monetary system. At present, contrary to popular belief**, private banks create 97% of our money out of thin air when they issue loans (see An IMF Proposal to Ban Banks from Creating Money). This results in an ever increasing debt spiral, which can only be repaid via continuously increasing economic growth.

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*See The Steady State Economy Movement

**When polled, most people in western countries express the belief that all money is issued by government.

The film can’t be embedded for copyright reasons but can be viewed free at the Al Jazeera website Growing Pains

Demolishing the Myth of Perpetual Growth

Life After Growth: Economics for Everyone

Leah Temper and Claudia Medina (2010)

Film Review

The purpose of Life After Growth is to challenge the perpetual growth paradigm in an era in which markets have taken the place of religion in determining major social values.

At present media pundits and policy makers champion continual economic growth as an unquestioned fact of life. In reality, it’s a fairly new phenomenon. Prior to the 19th century and the industrial revolution, all human civilization was characterized by a steady state economy in which both population and productive capacity grew very slowly.

The documentary argues that the urgent crises of poverty, inequality, shortages of water and energy and ecological destruction mean the time has come to explore better ways to design the economy other than infinite growth – especially as the latter is impossible on a finite planet.

At present a “healthy” economy is expected to grow at an average annual rate of 3% a year. At that rate, the size of the economy doubles every 23 years, as do carbon emissions and resource depletion.

Filmmakers also explore what the transition from a growth economy back to a steady state economy might look like. They do so by profiling a number of “DeGrowth” groups that have opted out of “corporate” society:

• The voluntary simplicity (aka voluntary simplicity) movement launched by Vicki Robin’s 1992 book Your Money or Your Life – where members vastly improve their quality of life by working 1-2 days a week, living more simply and consuming less.
• The Transition Towns movement – involving communities throughout the industrialized world collectively organizing to downsize their lifestyle and reduce their carbon footprint.
• The Catalan Integral Collective in Spain – funded by the civil disobedience of Enric Duran, in which he used credit cards to “borrow” 492,000 euros from 39 banks, an amount he couldn’t possibly repay. (See Spain’s Modern Day Robin Hood )
• Ecuador’s Keep the Oil in the Soil campaign – in which the president of Ecuador pledges to not to mine Yasuni National Park (one of the most biodiverse places on earth) for oil provided developing countries commit to replace Ecuador’s lost income.
• Bhutan’s decision to measure their country’s success through Gross Happiness Index (GHI) rather than Gross Domestic Product (GDP).
• The Church of England’s God is Green program dedicated to reducing Britain’s carbon footprint.

GrowthBusters: Hooked on Growth

(This is the seventh of a series of posts about ending our debt based monetary system and reckless emphasis on perpetual economic growth. Dave Gardner makes the ecological case for ending our addiction to continuous economic growth.)

Growthbusters: Hooked on Growth

2011, Directed and produced by Dave Gardner

http://www.growthbusters.org/

Film Review

Growthbusters is the inspiring story of Dave Gardner’s efforts to challenge conservative Colorado Springs’ failed growth promotion policies. The film also takes a broader theoretical look at the overall failure of economic growth to solve the global economic crisis.

While Gardner is clearly an environmental crusader concerned about the link between unlimited growth on carbon emissions, resource scarcity and species extinction, he inserts a heavy dose of economic reality into the discussion. All of us involved with local government have heard the same insipid assertions about the urgent need to cut corporate tax and regulations to attract new industry and jobs, as well as the need to spend to spend billions of dollars on new infrastructure to accommodate the hoards of people we want to attract to our cities and towns.

In reality, the people and institutions who promote growth most heavily are the only ones who benefit from it – at the expense of everyone else. This includes real estate developers who derive profits from building more homes, office blocks and shopping center; the mining and fossil fuel companies that fuel this economic activity, as well as heating all the new homes and powering the new cars; and the banks who finance all this. In other words the super rich.

The Population Bomb

In addition to tackling the pro-growth agenda head on, Gardner also makes the important link between exploding population growth and environmental degradation. Paul Ehrlich, who appears briefly in the film, warned in his 1970 book The Population Bomb that mankind was rapidly outstripping the Earth’s natural resources. Dennis Meadows, who directed the 1973 Club of Rome project resulting in the book Limits to Growth, also appears. Based on advanced computer modeling, this controversial report warned forty years ago that population growth and resource scarcity would cause the global economy to falter at the beginning of the 21^st century. Apparently, as Meadows reminds us, the 2008 global economic crisis was right on schedule.

As Gardner, Ehrlich, Meadows and other experts point out, humankind is living beyond our means, “liquidating” resources we should be should be saving for our children and grandchildren. If we were still growing all our food locally, as we were at the beginning of the 20^th century, it would be obvious there is no longer enough land in cultivation to feed 7 billion people. However because of globalization, most of the industrialized world has no idea where their food comes from. While the one billion people who die of starvation or gradual malnutrition are virtually invisible.

Family Planning: the Best Way to Reduce Carbon Emissions

Gardner doesn’t advocate for mandatory population control like they have in China. However he argues strongly for major environmental groups like the Sierra Club to use their public profile to begin educating governments and communities about making informed decisions around family size.

There’s no way we can possibly change enough light bulbs or plant enough trees to compensate for all the babies born to our children and our children’s children. Population control is a critical ecological issue. The “official” environmental movement is letting us all down by refusing to take it up.

New Paths Forward

Gardner himself does his part. When he’s not running for city council or making movies, he’s out in the street distributing free Endangered Species Condoms on the street. The condoms come in choice of packaging featuring endangered panthers, polar bears and cute critters.

He also encourages people to join the Transition movement to help in strengthening their communities, re-localizing economic life and rebuilding skills that don’t depend on corporations and fossil fuels.