Heikki Sairanen and Jaakko Stenhäll make some sharp observations about this paradox in their new book, Avoin vihreä talous [The Open Green Economy]. For the most part, the solutions presented in the book are worth supporting. For instance, Sairanen and Stenhäll are right to argue that the fundamental problems of economic policy are not to be found in economic theory as such, but in the economic policies built on these theories. I won’t go into the contents of the book here; it is worth reading and forming your own opinion. I will, however, highlight two blind spots related to the paradox I mentioned: a relatively uncritical attitude to the possibilities of immaterial economic growth and a lack of depth in the proposed solutions.
Sairanen and Stenhäll repeat the myth of economic growth rather uncritically. To cite an example given in the book: atoms can certainly be rearranged in endless new ways to support economic growth, but this assumes that the markets are willing to pay a constantly increasing price for this constant rearrangement. Further, not even atoms are immaterial.
Rearranging them uses up energy and every time it is consumed it is irrevocably converted, according to the laws of thermodynamics, from something more useful to a something less useful (e.g. Georgescu-Roegen). The service and digital economies are not immaterial.
What then could we consider genuinely immaterial economic growth? One answer might be that we might begin to pay each other more for spiritual things, such as love, death, trust, belief (see e.g. Daly). But this kind of “spiritual growth economy” does not appear to be a trend one could accept uncritically – spiritual and economic growth cannot be assessed by the same measures, for good reason.
The second, more central shortcoming in the book is the lack of depth and radical content in the suggested package of solutions.
When it comes to the earth’s resources, we Finns use about four times the amount considered sustainable. If we aim for a moderate 2% annual economic growth, Finland’s overall product needs to become 5% more ecologically efficient every year over the next 40 years. That way we might achieve our planetary resource limits by 2050. Until now, however, macro-level ecological efficiency gains have reached annual peak rates of 1–2%, not just in Finland but globally. History does not dictate the future, but it does give a good indication of the probabilities.
What we can conclude from this: if we establish sufficient limits on resource use, we can make a realistic guess that the economy has a substantial chance of heading for zero growth or even into decline. This is the central argument of the degrowth movement, but Sairanen and Stenhäll casually bypass this scenario. In some areas growth will be needed and achieved, such as in eco-efficient solutions, but the measuring rod needs to be macro-level sustainability, not micro-level success stories.
An addict does not understand what true freedom is until freed of their addiction. To make room for the desired radical solutions, we first need to understand our dependency on economic growth and then set ourselves free of this compulsion. A new, deeper learning is needed.
Current politics seeks solutions mostly in relatively short-term realpolitik. Utopias are consigned to failure from the start, even though politics should be the art of the possible. Realpolitik takes place as technical-economic suboptimisation where technical-economic instruments are used to resolve single, simple, identified problems. The difficulty is that concentrating too much on realpolitik produces – good intentions notwithstanding – not simple but complex, many-sided problems, with a time lag. This is the development model that, rather self-consciously, Sairanen and Stenhäll also follow: “We don’t want to propose unfeasible utopias, but rather, improvements to the status quo that can be achieved through moderate change.”
If we establish sufficient limits on resource use, we can make a realistic guess that the economy has a substantial chance of heading for zero growth or even into decline
Avoiding suboptimisation requires a more thorough investigation into basic values and aims, as well as a wholesale questioning of previously adopted frameworks. In the following I will sketch out four steps to help achieve this.
1. We need a “Parliament for the Future”
The problem is that parliament in its current form operates on a temporal horizon of two electoral cycles at most. Short-termism directs political debate towards relatively simple technical-economic solutions since there seems to be insufficient time to ponder alternatives. The Committee for the Future (of the Finnish Parliament) undoubtedly produces good perspectives and intentions, but its outputs fall victim to parliament’s short-termism.
And so we need a Parliament for the Future, independent of the current parliament, which will train its lens on the future. The current parliament’s task must be determined as economic and other policy-making on a projected timescale of one to ten years. The Parliament for the Future by contrast, should be tasked with framing the “basic laws” of ecological, socio-cultural, societal and economic activity on a time-horizon of ten to 100 years.
In other words, the Parliament for the Future will define decision making in future parliaments, but will not involve itself in day-to-day politics. The independence of this Parliament for the Future must be guaranteed, so that the political and economic players who are concentrating on sustaining existing conditions cannot dictate its work. The long-term framework for the Parliament for the Future would also have an impact on markets, since it would strengthen market players’ belief in coming market conditions and resource constraints.
It is up to debate as to how such a Parliament for the Future should be organised and elected. In order to guarantee its independence, parliament members should not have vested interests in any kind of day-to-day politics or business. Both personal and parliamentary expenses should be covered by the government during and after the membership, and one should not be able to receive any other type of private or public compensation during or after the membership. In order to guarantee the continuance and long-termism of the Parliament for the Future, we could elect 150 members, each for 15 years, so that 1/3 of the members change every 5 years.
2. Let’s start from the whole
The first decisions of the Parliament for the Future must start from a sense of the ecological, societal, cultural and economic whole, avoiding suboptimisation. An integrated conception must be developed and then the right priorities must be established. Firstly, tight global and national ecological limits must be set on people’s economic and other activities, preferably concentrating on principles of security rather than maximisation. Secondly, criteria for global and national human wellbeing must be set. Thirdly, individual freedoms, e.g. to undertake economic, cultural and societal activities, should be guaranteed within the conditions set by the aforementioned criteria for ecological and human wellbeing.
Let us instead direct our energies towards dismantling today’s monopolies of power, advancing democracy and developing our capacity for integrated thought and understanding.
3. A “driving licence” for the art of thought for everyone
In education these days, too much emphasis is placed on the kind of technical-economic skill that increases productivity and generates economic growth. But this does not enhance an overall picture of the ethics of the biosphere, or of the interconnections that sustain human relations and our shared habitat. Alongside this technical-economic education we need – even partly as a replacement – a stronger pedagogy in humanist, philosophical, societal and socio-cultural thought and understanding than today. With this we would not so much be seeking immediate economic gain but, instead, human flourishing in the long term (e.g., Nussbaum 2011).
To develop thought and understanding requires systematic education. In the same way as a driver’s licence is required to begin driving a car, a driver’s licence in ecological and humanist thought should be a prerequisite for working life. We could couple this with, for instance, a basic income and education framework so everyone is to have such a licence in order to be eligible for basic income and further education.
Defining what this driver’s licence should be is, of course, a challenge – since driving is a technical proficiency whereas the art of thought is anything but. It will certainly not be possible to grant a driver’s licence of thought and understanding on the basis of one quick test. Instead it will no doubt require a peer reviewed and multi-skilled mentoring and assessment process. The licence requirement should apply in all areas of education and the licence itself should require renewal at least every ten years. The licence benefits the public in the same way as the road network, so society should share the responsibility for making it available to everyone.
4. More democratic structures
In order for the previous three steps to become possible, monopolistic concentrations of power must be dismantled. Space must be made for equal, inclusive and fair democratic processes. This requires radical changes not only in global institutions, such as the IMF, the World Bank, the EU and international trade regulations, but also in the Finnish political system and structures of corporate power. The Parliament for the Future must be given the task of investigating how the structures of power monopolies are born and erect “counter-structures” to prevent them from emerging.
Often monopolies of power emerge when the decision making regarding the resources of a particular community or region is concentrated in the hands of just one or a few players. This kind of monopolisation can be prevented by setting a ceiling on power. One example would be to prevent any individual player from having decision-making power over more than 10% of any community’s or region’s resources. This would apply as much too democratic decision making as private markets. For example, leaders of parliamentary parties should not be in control of over 10% of votes nor business leaders of over 10% of an area’s market share or employees.
These steps are not easy, but they are necessary for Sairanen and Stenhäll’s many, undoubtedly good, technical-economic solutions to be given the space they need. The steps I have presented are not utopian, since they can be realised when enough people want them.
Unlimited economic growth on a limited planet on the other hand is utopian. The limits to growth were clearly conceptualised in the early 1970s – and the subsequent forty years were wasted. Sustainable development was not achieved. What was left was unsustainable development. It is not worth wasting the next forty years as well on realpolitik. Let us instead direct our energies towards dismantling today’s monopolies of power, advancing democracy and developing our capacity for integrated thought and understanding.
Daly, H. (1996). Beyond growth: The economics of sustainable development. Beacon Press.
Georgescu-Roegen, N. (1971). The Entropy Law and the Economic Process. Harvard University Press: Cambridge, Massachusetts.
Nussbaum, Martha (2010). Not For Profit: Why Democracy Needs the Humanities. Princeton University Press
Senge, P., Scharmer, O., Jaworski, J. and Flowers, B. (2008). Presence: Human purpose and the field of the future. Currency.