Deep Economy: Reading Guide 1
Chapter 1 – After Growth
“...growth...is producing more inequality than prosperity, more insecurity than progress... [moreover it] is no longer making us happy” (p. 11).
McKibben’s aim in this chapter is to question what he calls our “fixation on growth” (p. 11). He means the belief in the goodness of limitless economic growth, which is built into American culture, politics and identity. The goal is always to produce more, to expand markets, to increase investments, to earn more – to continually grow. McKibben cites Democratic and Republican arguments for the many benefits of growth. The taxes reaped from a growing economy help pay for popular programs like Medicare and Social Security. Greater economic wealth frees up resources for environmental clean-ups. And increasing prosperity allows individuals to have more choices and options. At least these are some of the standard arguments in favor of economic growth. McKibben challenges these arguments, however, and he proposes three chief objections to limitless growth.
He argues that:
1) growth is producing more inequality and insecurity.
2) growth is taxing our available energy while creating inevitable pollution.
3) growth no longer makes those in developed nations happy.
The following outline breaks down four main themes within this chapter.
Wealth – What McKibben seeks to demonstrate is that economic growth isn’t making us financially wealthier. He shows that real wages have declined over the last 30 years, despite the fact that economic growth has increased. McKibben argues that the reason for this is due to the nature of growth itself. His claim is that “growing wealth accumulates in a very few...pockets.” In other words, businesses and corporations gain from economic growth; most wage earners don’t (p. 12). Our economic thinking – growth for the sake of growth – produces these inequalities in income. Though distributing incomes more fairly would help, McKibben’s overall belief is that this would do little to solve the problem (p. 14). The problem is our very idea about what it means to be wealthy.
Not only is our current economic approach not making us richer, it is destroying our environment. McKibben states that “getting rich means getting dirty.” Industry and manufacturing inevitably create pollution. While richer nations may be able to devise methods to “clean-up” their by-products, no one can adequately address the problem of carbon dioxide – the prime reason for global warming (p. 21). Our economy can’t function unless there are people to work and resources to harvest. Therefore, our cycle of grow, pollute, clean, grow is simply not feasible. McKibben also claims that “the effect of unabated climate change would be to make us 20 percent poorer by century’s end” (p. 25). In trying to imagine what a different economic view could be, McKibben examines the emerging field of ecological economics. This economic approach considers both the cost of manufacture as well as the cost of manufacturing’s environmental impact (p. 26–30).
Energy: Fossil Fuels and Renewables - McKibben explains that before fossil fuels were used, production was dependent on biomass – or “stuff that grows anew each year.” More simply, it is food for animals, wood for fuel, human labor, etc. McKibben states that “energy depended on how much you could grow” (p. 15, 16). While we do have modern forms of biomass – ethanol for example – we need machinery that runs on oil to fertilize, harvest and convert it into fuel. The problem is that we’re running out of these much needed fossil fuels (p. 16). Feeling the pinch, Americans have started to buy smaller cars and use mass transit systems (p. 17). This certainly helps. But if countries in the developing world continue to be encouraged to follow our model of growth, our cut backs in oil will be more than made up for.
McKibben points out that renewable energy sources, like solar and wind power, have much less of an impact on the environment. However, they are less energy abundant. Unless the way in which solar panels and windmill are used changes, renewable energy can’t provide enough fuel for what we currently need (p. 17). While limited supply has led to innovations in the past, it may not be possible to reinvent the way we use fossil fuels. Even a mere reduction in supply would re-shape and restructure our very lives (p. 17).
Global Warming – McKibben offers convincing data and statistics about climate change and global pollution. He breaks down the idea of environmental pollution into two broad categories: 1) the sort that “results from something going wrong” – like dirty water and polluted air – which he argues is easily fixed by investing in methods of clean-up, and 2) the inevitable by-products of fossil-fuel-fired industry and machinery working properly. Carbon dioxide is one inevitable by-product. There is currently no way of getting rid of it completely. It is true that, as growth increases, better technology develops that is more “environmentally friendly.” However, “these improvements have not matched the rate of growth in the amount we burn” (p. 22). Hybrid cars are only driven by the select few who can afford them, and even their engines produce carbon dioxide. Because of this, the problem of carbon dioxide pollution and its effect on climate change has not been effectively addressed (p. 23).
Happiness – McKibben explains the concept of utility maximization which means what you freely choose to buy is an indicator of what will make you happiest or feel most secure. More pointedly, it means, “you can tell who I really am by how I spend” (p. 30). This idea assumes the rationality of consumers. However, McKibben points out that many of things we buy simply aren’t rational (p. 32). Buying a deck of cards at the check-out counter (when you already have two) is an impulse buy, not a well-thought-out decision. What is more, despite our economic riches, McKibben shows that Americans have been consistently reporting that their happiness is decreasing. This trend is not unique to the United States (p. 35). This is not to say that having more money is necessarily causing dissatisfaction. But it does suggest that increasing wealth does little to alleviate unhappiness in affluent countries. In the developing world, however, this is not the case. As McKibben states, “money consistently buys happiness right up to about $10,000 per capita income, and that after that point the correlation disappears” (p. 41). What is important for us to see, says McKibben, is that we’ve “kept doing something past the point where it worked” (p. 42). When food is scarce, having more money makes you exceedingly happier. But, our food is not scarce, nor is anything else for most of us. What we need then, according to McKibben, is to come up with a new economic strategy that asks “deeper questions” regarding individual and community satisfaction as well as one that offers a chance at global sustainability (p. 45). What he calls for is an economics that is based first on subjective well being, which values those goods that reliably make people happier. This would allow economists “to stop asking ‘What did you buy?’ and to start asking ‘Is you life good?’” (p. 34).
