In Monday’s Guardian, Larry Elliott, the economics editor, wrote a long piece on how the “knock-on effects of slower US growth will be felt in every corner of the globe,” the “day of reckoning” for the US debt binge may be delayed but is “now inevitable”. What was significant about the piece, however, was that Elliott stepped outside of the hegemonic thinking of mainstream economists to ask whether, on ” the brink of ecological catastrophe, we ought to lose our fixation with growth and concentrate on self-sufficiency and sustainability instead”. The Guardian may be a left liberal paper but for an economist to question the raison d’etre of growth is to put themselves about as left field as you can get. We need a radical shift in economic thinking towards a form of steady state, sustainable economy and this piece is a welcome recognition of that in the mainstream media.

Elliott does not argue that an economic downturn is a good thing itself (if only things were simple). It’s worth quoting him in full:

“It is, then, conceivable that we could be in for a period in which a synchronised upswing in the global economy turns into a synchronised downturn, as weaker demand from the US ripples out to the export-driven economies of Asia and the Eurozone. Protectionism will then exacerbate the recession. To which the response might be: a good thing, too. If, as Al Gore was arguing during his visit to London last week, the world is on the brink of ecological catastrophe, we ought to lose our fixation with growth and concentrate on self-sufficiency and sustainability instead. The dystopian vision presented by the former vice-president is certainly alarming; the thawing of the Siberian permafrost, the irrevocable changes to marine life, the icequakes caused by the breaking up of the Greenland ice fields all point to the need for a root-and-branch rethink of the way we live our lives. From this standpoint, anything that throws sand in the wheels of the globalisation juggernaut is welcome. What we need is a full-scale cathartic crisis that will enable a new and better world to emerge.

It might not be that easy. True, a collapse of the Doha round, and a sharp contraction in global growth, could provide two of the elements that brought about change in the mid-20th century. But in the 1930s, the progression of events did not go stock market crash, recession, new world order. It went stock market crash, financial collapse, beggar-my-neighbour devaluation, protectionism, fascism, world war, new world order.

Clearly, the solution to Gore’s looming environmental Armageddon has to be collective, rather than unilateral. There is no way that the US, for example, is going to take action to cut carbon emissions unless it is sure every other country is doing likewise.

Yet the chances of multilateral action will be diminished in a climate of fear generated by economic weakness. The report on the economics of climate change currently being undertaken by Nick Stern at the UK Treasury is likely to conclude that the costs associated with a reduction in the emissions to the levels deemed safe by scientists are relatively modest. Gore himself believes that tackling climate change will be good for business, opening up plenty of new opportunities to make money.

That’s as may be. Multilateralism is a delicate plant; it does not thrive in harsh climates and the same impulses that drive countries to put up trade barriers when times get tough will persuade policymakers to listen to the special interest groups arguing that the price of tackling climate change is too high. The growth-at-all-costs lobby will be strengthened.

So it’s potentially a bleak outlook. The Gore thesis suggests the current economic paradigm is leading us up an environmental blind alley, but if, and when, there is a crisis in globalisation it will set off a train of political events that will make the prospects for salvation far more difficult to achieve.

Gordon Brown says that it is no longer enough for progressives to marry economic growth with social justice; the challenge now is to add a third element - care for the environment. He’s right: it is a challenge. As John Lennon once said, we’d all love to see the plan.”

http://business.guardian.co.uk/story/0,,1806079,00.html

Two organisations worth looking at:
New Economics Foundation http://www.neweconomics.org

Foundation for the Economics of Sustainablility http://www.feasta.org/