Reinventing Prosperity presents some new, creative and what authors Graeme Maxton and Jorgen Randers claim to be “politically feasible” proposals to solving the world’s most pressing economic, social and ecological challenges. In 13 proposals the authors present solutions to emerging issues in the so-called developed economies such as increasing income inequality, chronic underemployment and climate change. Many of these challenges are the result of a western economic model based on a perceived need for perpetual economic growth in spite of most countries having achieved material sufficiency and relatively happy people.
The book was prepared for the Club of Rome, a global think tank that has long raised similar concerns about the future of humanity. Its seminal 1972 work, The Limits to Growth, accurately predicted that exponential economic growth would result in a larger ecological footprint that would “overshoot” ecological capacity and could lead to economic collapse.
In Reinventing Prosperity, Maxton and Randers reflect on the warnings of that earlier book. A retrospective look at key well-being statistics from the 1973 OPEC oil crisis until today shows a steady decline in overall human and ecological well-being, including rising income inequality and falling real wages, while gross domestic product continues to grow.
To challenges such as the end of work—due to increasing robotization of production—the authors propose solutions including shorter work weeks, raising the retirement age, increasing unemployment benefits, redefining “paid” work and compensating unpaid work for the care of others. In short, they make the argument for a guaranteed livable income.
For environmental challenges such as the impacts of carbon emissions on climate change, the authors’ suggestions include a fossil fuel tax that returns proceeds to citizens—something Alberta is trying now with the carbon levy. They also propose a tax shift from employment to carbon emissions and resource use, as well as having smaller families and restricting trade only to where necessary (no more free trade deals). All of these may result in a reduction in the growing carbon liability imposed on nature from the current economic growth model.
Ironically, while compelling the reader (presumably policy advisers and decision makers) to find hope in their proposed solutions, they state unequivocally that their “idealized list has absolutely no chance of being accepted by those in power—financiers, the rich and big corporations.” The authors place their hope in the rest of humanity to read their book, recognize the benefits and feel compelled to vote for this new economic agenda. Yet they claim these ideas will likely take years if not “several decades” to implement.
While their ideas for a better future “beyond the limits of growth” are worth considering, I found myself disheartened by the authors’ failure to critique the mindset that has rationalized the perpetual economic growth model. A key driver behind more economic growth—and the single most important factor that has resulted in the economic, ecological and social crises of both the developed and developing worlds—is the nature of money, specifically debt money. Yet the authors fail to mention the impact that unsustainable and rising debt for all nations has had on increasing income inequality, falling wages and rising greenhouse gas emissions from ever-increasing economic output. Without addressing the problem of debt money, in my opinion, the authors fail to provide meaningful solutions to a more just, sustainable and happier future.
—Mark Anielski is an economist and the author of The Economics of Happiness: Building Genuine Wealth (New Society).