Economic Issues

Jackson, Tim, 2009, Prosperity without Growth: Economics for a Finite Planet, Earthscan, London.

Stern, Nicholas, 2006, Stern Review on the Economics of Climate Change, UK Treasury, London.

An official report, chaired by (Lord) Nicholas Stern, which considered the costs and benefits of investing rapidly in renewable energy to avoid excessive climate change. The report emphasised the advantages of acting quickly, which of course did not happen. It was also notable  for its discussion of the inappropriateness of using conventional economic discounting methodology to consider costs and benefits over very long periods of time. Whether we’re entitled to leave a wasted planet to future generations is a matter of morality not of economic cost/benefit analysis.

Victor, Peter, 2008, Managing Without Growth: Slower by Design, Not Disaster, Edward Elgar, Cheltenham, UK

To stop environmental destruction, we will have to halt economic growth in the richer parts of the world. This book is one of the few, so far as I know the only one, that actually constructs an economic model of an economy, in this case the Canadian economy, as it makes the transition to a ‘steady state’. Unsurprisingly one of the principal conclusions is that there will be less paid work to go round. Victor proposes to address this problem by limiting the hours that can be worked in a year – as indeed France has tried to do. I believe that a better solution is to introduce a ‘basic’ or ‘citizen’ income paid by the state to everyone. It does not need to be sufficient to live off. A basic income at any level would affect at the margin people’s inclination to work and would thus reduce to some degree the supply of labour (to use economic jargon). Of course this would need to be finely judged so that sufficient numbers would still have an incentive to do the work that would still need to be done.

Victor, Peter, November 2010, Questioning Economic Growth in Nature Vol. 468, 18 November 2010, Macmillan, London

In effect a summary of the conclusions of Victor’s economic modelling set out in his above book .

Stiglitz, Joseph E, Sen, Amartya, Fitoussi, Jean-Paul, 2009, Report by the Commission on the Measurement of Economic Performance and Social Progress, Paris

Two Nobel prize-winning economists headed up this official study for the French government of the limitations of using economic growth as a measure of economic performance and human welfare and considered alternative or supplementary indices that could be developed. On the principle that ‘what gets measured gets managed’ this was an important report which was indeed followed up by a few national statistical offices in Europe. But its political impact seems to have been minimal so far. Politicians still talk overwhelmingly about economic growth.

Gordon, Robert J, August 2012, Is US Economic Growth Over? Faltering Innovation Confronts the Six Headwinds, National Bureau of Economic Research, Working Paper 18315, Cambridge MA.

In this interesting and very controversial paper Gordon argues that the era of high economic growth experienced over the last two hundred and fifty years was driven by very particular technological developments notably: the use of steam and later other fuels as a source of power which previously had (almost) all come from human and animal effort; and the discovery and application of electricity. Gordon argues that there are no similar break-through technologies on the horizon and that consequently economic growth per capita in rich countries (i.e. those on the technological frontier) is bound to fall back to long-run historical levels, say less that half a percent a year. His argument s interesting in that it has nothing to do with environmental constraints or about a voluntary reduction in the rate of economic growth. But (Western) politicians might well take heed as they strive to recover rates of growth that were last seen before 2008. They may never succeed, other than by various form of manipulation – such as bringing some forms of work (for example care for children or the elderly) into the (measured) monetary economy whereas in the past they were left outside it.

Heinberg, Richard, 2011, The End of Growth: Adapting to Our New Economic Reality, Clairview, Redhill.