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.

Telling the Truth About Debt, Austerity and Taxation

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The Joy of Tax: How a Fair Tax System Can Create a Better Society

by Richard Murphy

Corgi Books (2015)

Book Review

Although the topic is economics, I personally guarantee this product to be totally painless. Murphy describes economics in ordinary comprehensible language – unlike mainstream economists who treat economics like a religion that can only be understood by high priests – and who speak and write in obscure language so you can never be sure if they’re telling the truth or not.

In The Joy of Tax, UK Tax Justice Network co-founder Richard Murphy offers a radically pioneering approach to tax and fiscal policy.  Murphy is one of the first economists to link tax policy to the 400- year-old reality that nearly all money is created by private banks out of thin air.

For political reasons, most economists try to conceal that private bank loans, i.e. debt, are the source of nearly all money in circulation. According to Murphy, the recent admission by the Bank of England (Quarterly Bulletin April 2014) about the true source of our money makes it possible to debunk a number of myths perpetuated by mainstream politicians and economists. Some examples: that investment is only possible when there are sufficient savings in the economy, that government debt is bad and that austerity, balanced budgets and government surpluses are good.

A point Murphy emphasizes repeatedly is that government also has the ability to create money out of thin air. Moreover it has regularly exercised that right to stimulate a stagnant economy. In fact, because all money is created as debt, it’s essential for government to “create” money (by spending it into the economy) whenever private banks fail to create sufficient credit. If this didn’t happen, severe economic recession results.

In Murphy’s view, the primary purpose of taxation is to reclaim the money government creates to keep it from over-inflating the economy. He claims the conservative elites who rabbit on about repaying government debt are really making the case that only private banks should have the right to create money. Aside from making them enormously rich, this makes no sense. Private banks are incapable of acting in the public interest – by law they can only act in the interest of their shareholders.

Citing Adam Smith in The Wealth of Nations, Murphy maintains a rational tax system can deliver other important goals, such as reducing inequality, recovering externalized costs (e.g.  pollution, toxic waste) imposed by corporations and promoting economically and ecologically sustainable growth.

For the current tax system to accomplish these goals, it would need to be far less regressive. At present most of the tax burden falls on middle and low income taxpayers. According to Murphy, the global economy will continue to stagnate until the wealthy shoulder their fair share of tax.

To make our current tax system fairer, Murphy proposes to introduce a number of “progressive” taxes, including a financial transaction tax, a wealth tax, a carbon/pollution tax, a land value tax to fund local government and a special tax on corporations that fail to re-invest their profits. He also proposes to do away with the current welfare bureaucracy by introducing an Unconditional Basic Income (UBI).

Although most of these tax reform proposals are specific for the UK, they would clearly produce similar benefits for the US and other post-industrial economies.

Originally published in Dissident Voice