In Curing Affluenza Australian economist, Richard Denniss puts forward proposals to tackle “that strange desire we feel to spend money we don’t have to buy things we don’t need to impress people we don’t know”. This disease of ‘affluenza,’ he argues, “is economically inefficient… the root cause of environmental destruction and… global inequality”. As an advocate of moving to a Simpler Way, I am highly sympathetic with Denniss’ case. But in my view his diagnosis, as well as the proposed remedies, are far too mild to adequately deal with our societal ills.
For a book about affluenza, one might be surprised to learn that Denniss does not advocate for consumers to spend less money. Consumerism, he defines, is the “love of buying new stuff” – with the emphasis on stuff. The central concern of the book is to ward consumers off spending their hard-earned money on resource-intensive and wasteful items such as plastic water bottles, hand bags and home gymnasiums. For the stuff we do buy we are encouraged to adopt a genuinely ‘materialist’ philosophy, by caring for, repairing, recycling and sharing what we have, rather than discarding it after one use. Good advice. Sustainability 101.
But, as a well-trained (market) economist, Richard is aware of the famous ‘paradox of thrift’ first diagnosed by Maynard Keynes, in which – in the context of an unplanned free market economy – a reduction in aggregate demand can result in economic depression and mass unemployment. Indeed, within the market economy, even a slow-down in growth can lead to a spike in unemployment, given growth is the only way the system (being unplanned) is able to soak up the labour displaced by technological advance. This basic reality was made clear in a recent article at online ABC in which it was noted that about one quarter of Australian GDP ($423 billion per annum) is made up of household consumption of non-necessities (i.e. items not related to food, shelter, clothing, utilities and health etc). As Saul Eslake pointed out “if everyone cut their spending back to the basics, and did it immediately, the result would be an almighty recession — indeed, a depression.” Denniss knows this. And so, rather than advise consumers to tighten their wallets, he instead recommends a shift in expenditure. As he puts it: “while spending money on things we don’t really need is one way to create jobs, spending the same amount of money on things like services and infrastructure is another way”.
As a strategy for achieving environmental sustainability this is consistent with what is referred to as eco-modernism via ‘dematerialisation’ – a process that Denniss believes is already underway. Rich countries are “consuming less steel, less oil, less electricity, less paper…(p.68)”. Dematerialisation, he argues, simply needs to be accelerated via the purchasing choices of eco-savvy consumers, together will sound legislation and regulation from enlightened social-democratic (capitalist) governments.
But Denniss should have done his research more thoroughly. While rich countries may have reduced their material footprint in some areas, the data on overall material footprinta suggests very little progress has been made, notwithstanding a huge increase in the service sector in the last few decades. A recent study, for example, found that when the resources embedded within imports are factored in – and thus the full effect of globalisation is included – the material footprint of OECD nations has continued to increase and at a rate only marginally slower than GDP growth. In other words, very little ‘dematerialisation’ is really going on. In fact, at the global level, a UN study found that in the first decade of this century, the global economy become less resource efficient.
Its not just that industrial-material intensive sectors of the economy remain important. Its also that many services, far from being clean and green, have large material footprints either due to direct consumption of resources or indirect dependence on the material-industrial sectors of the economy. Frank Trentman points out that in 2007 “the French travelled 42bn kilometres to pursue their hobbies another 12bn to eat out. That takes a lot of fuel.” And while many online e-services involve zero exchange of ‘stuff’ between provider and consumer, they still rely, he notes, on the vast network of physical “power stations, data centres, cables, batteries and cooling systems.”
Even more annoying for a book claiming to offer a cure for affluenza is the ambivalent attitude towards economic growth (in terms of GDP growth). It’s not the size of the economy that matters, Denniss argues, but its shape – i.e. the type of economic activities that businesses, governments and consumers are engaging in. “If it is the parts of the economy that do little or no harm to the natural environment that are doing the growing, then an increase in economic activity will have little or no impact on the environment” ( p.117). An economy, he points out, which is based on renewable energy, extensive service provision, quality public services and local organic food growing, will be far more environmentally efficient, than one based on coal, cars and purchased water bottles.
This is correct – the shape of the economy matters for sustainability. But so too, obviously, does its size! If Denniss does not appreciate this, he only needs to take a glance at the basic, impossible, numbers. If the 9+ billion people expected to be living in 2050 were to ever rise to Australian projected 2050 GDP, the size of the global economy would need to be about 15 times its present size – and, yet, already today the world is in ecological overshoot (a measure, by the way, that does not include our obviously unsustainable massive dependence on non-renewable resources). The most optimistic ‘dematerialises’ think we might be able to achieve factor four reductions – clearly inadequate. So, come on Richard – do you really think that size does not matter? These kinds of numbers illustrate the sheer magnitude of the current Australian overshoot – but they are never made clear, let alone the focus for reflection on proposed solutions.
In response to this line of argument Denniss points out that some industries, such as renewable energy or organic farming, will need to grow in the transition to sustainability. That’s correct but to claim, as he does, that this removes the need for us to worry economic growth is to confuse the need for sectorial or industry growth with the overall size of the economy. Clearly, one can imagine a scenario in which some industries grow, but at the same the world (and wealthy nations in particular) embarks on a process of economic phase down, as the above numbers suggest is needed. It should also be noted that GDP could theoretically contract, even while the economy remains fully employed. Everything depends on the level of labour productivity (i.e. output per hour of labour worked) of the economy. There are strong reasons for thinking that transition to a far less energy-resource intensive green economy would result in more labour-intensive patterns of work (i.e local organic farming) which in turn would reduce labour productivity and therefore wages, profits and GDP.
Even at the industry-sector level, size matters for sustainability. Renewable energy is a good example. Today solar and wind industries have a small eco-footprint, given they provide about 2% of world primary energy. But if the attempt was made to run today’s energy intensive globalised economies on 100% renewables – a project, by the way, that is highly implausible, for both financial and bio-physical reasons – then, as David Roberts put it this would “mean building a huge amount of shit”. Not only would such a project require the mining of vast amounts of non-renewable resources, some very rare, but even more significantly, as a recent study showed, it would also depend on a very large and highly problematic land-footprint, given the lower energy density of renewable energy and the need for system over-capacity to deal with intermittency. Again, such issues are never analysed, let alone convincingly dealt with by Denniss; the usual eco-modernist assumption that renewables (at the scale needed), along with other green technologies will be unproblematic, prevails.
Given Denniss does not think economic growth is much of a concern, its not surprising he is equally ambivalent about the need to find an alternative to capitalism. Capitalism, he opines, is an imprecise term that confuses more than it clarifies. It is used to describe countries as diverse as Mozambique and Norway. Shouldn’t critics just by-pass the ‘c’ word and focus instead on making the eminently persuasive case that economic systems with a strong public sector are viable and attractive? Just look at the Nordics!
But while its true capitalism has diverse expressions across the global economy – not least due to the maintenance of a rich world empire – there is one feature of the system that is as universal as it is suicidal: namely, the growth imperative. As socialist critics have long pointed out the system is driven by a growth compulsion – ‘accumulate, accumulate that is Moses and the prophets,’ in the memorable phrase of Marx. This is certainly true at the global level where the big transnational share-holder driven corporations dominate. True, there are some today such as Herman Daly who think we can design a ‘steady-state’ version of the market economy. But I am deeply sceptical, especially given the goal is (or should be) not a steady state economy operating at the scale of rich nations today, but rather a vastly de-scaled, de-globalised, de-industrialised economy.
Can capitalism – in the sense of a basically free market and corporate controlled economy – really survive such a transition? Ted Trainer argues convincingly that there will simply not be the economic surplus available to make the capitalist drive to accumulate viable, at least not without generating major social tensions. That said, the simpler way vision we put forward, suggests there could be a place for private enterprise operating in a market at the local level, so long as all were willing to act within democratically set guidelines and within a culture of sufficiency.
What then is the answer? The point is, there isn’t one, at least within today’s global-consumer society. The task is to work for a very different kind of society characterised by simpler lifestyles; highly self-reliant local economies; a radically remade geography of settlements; a planned-democratic-socialised macro economy (greatly reduced in scale), and (hardest of all) a very different set of values from the ones that prevail today. Some of the detail, and reasons for thinking such a transition could actually improve quality of life, even in countries like Australia, is given here. Movements like Transition Towns, permaculture, voluntary simplicity have got the ball rolling, but they need many more helpers and a far bolder and radical analysis, such as is provided by the Simpler Way.
Denniss would no doubt respond that such proposals are simply impractical and non-viable. But, the coming oil-energy-climate shocks and related GFCs might lead more people to consider them. In any case, does a good doctor tell the obese patient with high blood pressure that they will be fine if they continue life as normal? Or do they, instead, confront them with some harsh realities? Curing Affluenza, I am afraid, fails to spell out the radical dose of ‘medicine’ needed to move us towards societal forms that both avert catastrophe, and make a just and sustainable future viable.
