thoughts gathered from here ..Life after the end of economic growth
A continually rising GDP is not necessarily possible – or even desirable. So why do policymakers obsess over it?
A post-growth economy would take into account environmental realities. Photograph: Dan Istitene/Getty Images
Richard Heinberg 30 November 2011 06.14 EST
The tide of economic growth that has flowed since the second world war may finally be ebbing. For politicians and most economists, this is like saying the sky is falling. Growth has become guidepost and grail, the sine qua non of economic existence. Growth is necessary to job creation and the health of businesses. Without growth the rolls of the homeless and jobless swell, requiring governments to shoulder more responsibility; yet at the same time tax revenues fall, making both new and existing government debt unbearable.
Stimulating growth has become job No 1 for policymakers. David Cameron insists that his nation must deregulate business and reform employment law in order to "go for growth". And at the conclusion of the recent G20 global economic summit, the US president, Barack Obama, reported that the discussions there had revolved around the question, "How do we achieve greater global growth?" Such statements raise nary an eyebrow; they are entirely expected. [ http://www.number10.gov.uk/news/we-need-to-go-for-growth/ ]
Nonetheless, in recent years a few economists have advanced a contrary view. Tim Jackson in the UK, Herman Daly in the US, and Serge Latouche in France have argued that growth is not always good for the environment or for the real health of communities, and that GDP growth is impossible to sustain over the long run anyway because we live on a planet with limited natural resources. Their position has won few adherents in the mainstream. In the "real" worlds of politics and economics, questioning growth is like arguing against gasoline at a Formula One race.
But doubts about growth are no longer theoretical. We seem to have arrived at a moment when further economic expansion is hemmed in by financial as well as natural limits. As extraction industries chewed through the low-hanging fruit of the world's oil, coal, natural gas and other minerals, and turned to lower-grade and thus more expensive ores and fuels, managers of the economy tried to keep growth going by piling up debt in the mistaken belief that it is only money that makes the economy run, not energy and raw materials. Today, high oil prices are keeping a lid on commercial expansion in the older industrial nations as petroleum demand shifts to the hyperactive economies of Asia, which for now can afford steeper fuel prices. Meanwhile, we in the west seem to have maxed out government and consumer credit, and that realisation is sending financial markets into fibrillation. With energy resources and credit both stretched tight, that means more economic growth may simply not be possible in the US and Europe, regardless of our opinions about it.
If policymakers fail to recognise this and continue assuming that the current debt crisis is just another turning of the business cycle, then we may lose whatever opportunity still remains to avert a crash that could bring civilisation to its knees. Over the short run, this is scary business. Financial markets have a hair trigger, and fears about flagging growth could bring down governments and banks.
Still, over the longer term there will undoubtedly be life after growth, and it doesn't have to play out under miserable conditions. With less energy to fuel globalisation and mechanisation there should be increasing requirement for local production and manual labour. We could meet everyone's basic needs by prioritising jobs in manufacturing and agriculture while downsizing the financial industry and the military. We will also have to reduce economic inequality and corruption (as the rapidly spreading Occupy movement rightly insists).
As we do these things, we must reform economics to reflect ecological reality: nature is not, after all, just a pile of raw materials waiting to be transformed into products and then waste; rather, ecosystem integrity is a precondition for society's survival. Adaptive responses cannot only be left up to government officials and economists; for their part, households must rein in debt and overconsumption while contributing more to community resilience.
There's light at the end of the tunnel. If we focus on improving quality of life rather than boosting quantity of consumption, we could be happier even as our economy downsizes to fit nature's limits.
But a benign future is unlikely to transpire if we all continue living in a dream world where growth knows no bounds, where debt can be repaid with more debt, and where natural resources are assumed to be endless.
Alarm bells are ringing. Wake up to the post-growth economy.
.........this makes sense to me ..and why did we forget Rachel Carsons book Silent Spring? I didn't forget it ..but one day at a time other things come up ..that you believe are important and soon it's ten years that you thought of Rachel Carson ... times goes on that's for sure ... .;)
Eurozone warned of credit downgrades after Germany and France strike deal
Merkel and Sarkozy spark relief in markets after agreeing package of measures to take to EU summit
Ian Traynor and Jill Treanor The Guardian, Tuesday 6 December 2011
Germany and France are among the nations threatened with a credit downgrade by Standard & Poor's. Photograph: Charles Platiau/Reuters
The grand bargain struck by Germany .. http://www.guardian.co.uk/world/germany .. and France to save the euro .. http://www.guardian.co.uk/business/euro .. and restore confidence in the single currency was facing its first challenge within hours of being negotiated, after 15 eurozone nations were warned that their credit ratings could be downgraded.
Just after crunch talks in Paris seen as vital to preventing the collapse of the euro, France and Germany were among the countries warned that Standard & Poor's was considering whether to reduce their ratings.
The German chancellor, Angela Merkel, .. http://www.guardian.co.uk/world/angela-merkel .. and the French president, Nicolas Sarkozy, .. http://www.guardian.co.uk/world/nicolas-sarkozy .. had earlier brought relief to the markets after agreeing a package of measures to take to an EU summit on Thursday, at which the deal is likely to be contested, but will probably be blessed.
Merkel and Sarkozy called for the Lisbon treaty to be reopened to facilitate the new eurozone deal but both agreed that if it ran into insuperable resistance, the 17 countries of the eurozone would themselves forge a new euro pact.
Although the announcement in Paris brought instant relief for the beleaguered euro, the pressure on the currency was short lived as rumours of the S&P action swirled just before the US markets shut. The Dow Jones closed up 78 points, giving up much of a 167-point gain it had made earlier in the day.
Until then, the costs of borrowing for Italy and Spain fell by half a percentage point or more, while the stock markets .. http://www.guardian.co.uk/business/stock-markets .. rallied and the euro strengthened against the dollar.
Earlier, Mario Monti, the new Italian prime minister, had unveiled his radical austerity package entailing €30bn (£26bn) of savings and warned Italy would be the next Greece without the drastic action.
S&P is reviewing 15 of the 17 eurozone credit ratings, and has promised to conclude its review as quickly as possible after this week's summit. Much of the market's focus will be on the six top-rated countries, particularly Germany, whose AAA status had not been thought to be in doubt before Monday night.
Merkel and Sarkozy said the new eurozone regime would be punitive, with automatic sanctions levied against countries breaching budget deficit limits. This was a concession for Sarkozy, who risks howls of criticism in France that he is surrendering parliamentary and governmental sovereignty over the French budget.
Eurozone leaders mustering a qualified majority of 85%, however, would be able to block the sanctions, Sarkozy said. That will allow him to claim that national democratic legitimacy has prevailed, although this looks unlikely.
The Franco-German pact presents David Cameron with a dilemma: whether to support treaty change at the summit of all 27 countries so the UK has a say in what happens, or let the 17 get on with it and face being marginalised. If the Lisbon treaty is reopened, Cameron has to tread carefully between Tory backbenchers who could exploit the opportunity to refashion the UK relationship with the EU, and most of the rest of the EU, who are wary of getting bogged down in a row about what Britain wants. In Brussels, however, officials speculated that the changes might be possible within the framework of the Lisbon treaty.
The German victory on automatic penalties for deficit sinners came on top of a joint call, also a German demand, for legally enshrined debt brakes in all eurozone countries, geared to ensuring balanced budgets, with the European court of justice charged with ruling on individual governments' practices. This appeared to be a more restrictive role for the court than Merkel had wanted, however.
In yet another U-turn by France, Sarkozy said there was no case for pooling eurozone debt and issuing collective debt instruments known as eurobonds – a German red line. "What a strange idea – harmonising the debt," said Sarkozy.
The summit was preceded in France by a chorus of bitter anti-German rhetoric from the left and the far right, putting Sarkozy in a difficult position six months before he bids for a second presidential term. "Those who speak like that are in opposition," said Merkel. "Let's be happy it's us in government and not them."
While both leaders agreed for the first time to rule out eurobonds, they were also poised to turn a blind eye to expanded intervention in the crisis by the European Central Bank, emphasising they would not comment on what the ECB chose to do.
The ECB's short-term role will be critical to whether the euro can be stabilised and whether the new blueprint for a so-called fiscal union is given the time to work.
While the overall package was largely scripted in Berlin, Merkel delivered one major concession, abjuring losses for private investors in sovereign debt crises. Under pressure from France, the ECB and the European commission, she agreed private investors in eurozone debt would not be forced to accept losses in the event of a default or bailout, with the exception of Greece where "haircuts" for the banks and private investors were agreed last July.
In an unexpected move, Berlin and Paris called for the eurozone permanent bailout fund, the European Stability Mechanism, to be launched next year rather than in 2013 as previously planned.
The package is to be turned into a formal joint proposal to be handed to Herman Van Rompuy, the European Council president, who is chairing the EU summit on Thursday and Friday. It falls to him to twist arms and to get the rest of the EU and eurozone to support the package. A big sticking point will be Merkel's insistence on renegotiating the Lisbon treaty, with many member states fearing that will mean opening a can of worms, sparking a lengthy acrimonious bout of horse-trading.
The Irish government will be particularly anxious as it may have to stage a referendum on the revised treaty, potentially derailing the entire scheme. Ireland faces more heavy cuts in public spending next year, with welfare and health departments taking the brunt of the pain under the country's latest austerity budget outlined on Monday.
Ireland's public expenditure and reform minister, Brendan Howlin, said spending would be cut by 2.7%, amounting to €1.4bn (£1.2bn) of reductions, in the first part of a budget which will continue with announcements on tax increases from the finance minister Michael Noonan on Tuesday.
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