Will Consumption Bounce Back?


Dot Earth, the NYTimes environmental blog, has published a series of posts asking whether the recession-induced drop in consumption can be maintained as we climb out of the hole we dug for ourselves. Three successive posts, featuring a Nobel prize winning economist, Kenneth Arrow, an iconoclastic economist, Herman Daly, and an MIT systems dynamicist, John Sterman, leave this question largely unanswered.

Arrow gives the standard economist's response, that growth is good and the current increase in savings will provide the capital to enable future growth without mucking up the world. Daly, who has championed a steady-state economic model that recognizes the connection of the abstraction that is the economists' model of economy to the finite real world of resources, said, in response to Revkin's (the blogger) questions:

When we “grow up” the first thing to do is to stop further growth, to become a mature steady state in physical dimensions, and then concentrate on qualitative development and maintenance: knowledge, wisdom, justice, the noosphere, etc. Arrested development in the adolescent growth phase leads to giantism, obesity, overpopulation, resource wars, and massive die-offs.

Sterman, like Daly, understands that the limits of the Earth will sooner or later put a stop to continued growth. He likens our incessant demand for bigger and bigger or more and more to living on what he called a "hedonic treadmill." And like Daly, he points to the need for reductions and structural change.

[Reducing m]aterial consumption is critical to easing down below these limits and building a more sustainable society. And there’s tremendous scope for greater efficiency and de-materialization in our consumption. Through technological and organizational change, supported by proper pricing (internalizing the currently externalized costs and environmental risks of material consumption and waste production), we can almost certainly provide for the needs of the projected population, at a good standard of living. But of course that’s not enough. As long as the dominant ethos is the drive for more consumption per capita — ever greater accumulation and consumption of material goods, energy, etc., then no amount of efficiency will suffice.

None of the contributors to this interesting series speaks about how to go about changing consumption levels, except for standard economic measures like innovation and consequent efficiency increases or internalizing the real costs of unsustainability. They understand the cultural norms that drive people to strive for more money so that they can buy more things and so on and on. But they generally take those norms to be rooted in some sort of psychological feature of the modern human being. That leads to neutral or pessimistic estimates of how to go about changing these structure and the length of time it will take.

Sterman knows whatever is to be done "will take a lot of work to shift our lives from the self-defeating path we are on to a more satisfying, sustainable path." Arrow thinks things will right themselves sooner or later. Daly commented:

Will mainstream growth economists ever wake up? Maybe, maybe not. Keynes said, “We are capable of turning off the sun and the stars because they do not pay a dividend.”

As is so often the case, this whole conversation is being held in an uncritical voice assuming that the economic model of human behavior is inviolate. Unfortunately this model (and it is only a model) is self-defeating and has led to the very condition all these commenters are concerned about--excess consumption relative to the Earth's capacity to support it. Rather than fret over if and how long it will take for the economy to return to historic rates of expansion, it's time to focus on the cultural values and norms that drive modern economies and deliberately introduce alternatives that will bring satisfaction and happiness beyond what money can provide. I call this state, flourishing. I believe that we do know what are these alternate value and beliefs, but are, as a society, stuck in our addictive ways and lack the tools and leadership to break out.

At the same time the Times was running these blog posts asking about the possibility of reduced consumption, it ran a story in their Happy Days column all about the meaning of money. Written by Simon Critchley, a philosopher, the "money quote" (interesting, but ironic in this instance, term used to point to the highlight in an article) for me was:

As a learned philosopher once remarked, money is the pimp between need and object, making available all objects and objectifying all beings, especially human beings. In a society like ours, where money is the one true God, everything is for sale and everyone is a prostitute insofar as value can be ultimately determined in financial terms.

It's hard to believe that we really can change our ways, but I do indeed believe that we can and must.