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More ‘green market’ ideas
A Better Choice of Choice: quality of life, consumption & economic growth
By Roger Levett, with Ian Christie, Michael Jacobs & Riki Therivel
Fabian Society Policy Report 58, August 2003. ISBN 0 7163 3058 X £9.95
THIS NEW Policy Report by the Fabian Society Blairite ‘think tank’ argues the case that cuts in consumption will be necessary to achieve environmental sustainability, in particular to tackle global warming. The argument goes that, given mounting evidence that economic growth as measured by Gross Domestic Product (GDP) does not lead to increased wellbeing, we can enjoy an improved quality of life even with lower consumption.
Routes to sustainability other than through cuts in consumption are downplayed by the authors on the grounds that it will be impossible to improve eco-efficiency by the factor of ten needed, by using new or different technology. This is because increases in productivity resulting from new technology themselves stimulate further growth and cancel out any eco-gains resulting from higher productivity. Also, since increases in total factor productivity (money costs of production/money sales) are the top priority for companies, matching improvements in ‘environmental resource productivity’ (production in volume terms/unit of environmental impact) will not occur, if profitability is adversely affected.
The authors are right to point out that the resulting growth can tend to cancel out productivity driven eco-gains in a market system. Although only hinted at in the report, the need for permanent growth, driven by competition and the profit motive, is central to capitalism. (However, a need for growth does not guarantee it will happen. Slumps, leading to temporary cuts in pollution, are inevitable as well.) This growth dynamic will always tend to undermine eco-efficiency gains, but it would be wrong to conclude that sustainability must therefore be achieved by cuts in consumption, rather than by eco-efficiency improvements. For example, in a non-market system environmental resource productivity could be planned to rise faster than total factor productivity.
The possibility of moving to renewable energy sources is heavily downplayed in the report, on the secondary grounds that they create local environmental problems. This slant is significant because it gives the false impression that there are no viable alternatives to consumption cuts, when in fact switching to renewables will be a crucial factor in transforming eco-efficiency, as it could enable environmental resource productivity to outstrip other measures. The technology exists to do it now but has not been deployed to any significant extent, partly due to the influence of the self-interested oil multi-nationals, but fundamentally because it would result, ultimately, in lower profits for most firms.
The point is made that problems arise if meeting basic needs rather than satisfying demands is made a central priority (as it is commonly argued by radical Green politicians) because defining the boundary between the two is difficult, since perceived basic needs vary according to context. For example, if satisfying need is defined as only providing basic subsistence (food, shelter, health, security), then this concept of need provides little help in guiding policy where the majority of the population live above subsistence levels.
A large section of the report is devoted to the sociology and psychology of consumerism, where it is argued that the link between growth measured by GDP and wellbeing is not clear. It cites research that suggests that beyond an (uncertain) level of affluence there are diminishing returns to social wellbeing. For example, psychological satisfaction is gained by developing good personal relationships rather than through increased consumption. That there are natural limits to consumption is shown by the experience of food consumption, the authors argue, where despite an abundance of food for over 50 years in the West, it is only recently that obesity has become a problem for large sections of the population.
The ‘hair–shirt’ green agenda is rejected in favour of a society where consumption will be cut, but not to the extent, for example, of eliminating ‘genuinely liberating’ items, such as labour saving devices in the home. A cut of this magnitude would not have a negative impact on ‘quality of life’ in the authors’ opinion. Many of the points they make about needs and wants – and there being natural limits to consumption – have some truth, but raise many more questions than they answer. In particular, the debate about natural consumption limits is abstract, because the growth dynamic of capitalism means that no such limits will be reached, even for the affluent, because a consumerist psychology, characterised by compulsive buying, and driven by insecurity and high pressure marketing, is built into the market system. However, if it is accepted in abstract terms that there could be natural limits to consumption and beyond this point human well-being is not enhanced, the question is posed: what are they?
The premise of the report is that natural limits of consumption have already been surpassed in the developed world, leaving room for GDP cuts consistent with a non-‘hair-shirt’ agenda that will be sufficient to tackle both the environmental crisis and not reduce wellbeing. This premise, however, does not stand up to scrutiny. Examples given in the report relate mainly to the lifestyle of the affluent middle classes who have reached their natural consumption limit, but just slightly reducing the consumption of this relatively small number of people (on a global scale) will be insufficient to solve our huge environmental problems. In fact, massive ‘hair-shirt’ cuts by the affluent, reducing consumption to far below any ‘natural limits consistent with maintaining wellbeing’, would be needed to even make a dent in greenhouse gas emissions, in the absence of other measures. Alternatively, if the consumption of the entire population of the developed world was cut this would have a bigger environmental impact, but it would be hard to sustain the theory that the wellbeing of the mass of the poor would not be affected. (There is a notable lack of evidence in the report that the consumption of the poor in the developed world has exceeded a level consistent with increased wellbeing!).
A valid point is made that ‘consumer choice’, which has an almost mythical iconic status in the neo-liberal agenda, does not mean real choice at all for most people. This is true particularly in education, health or public transport, and it is also environmentally wasteful, as for example in the production of a dozen varieties of near identical toothpaste. The de-regulation of bus services is given as an example of a sub-optimal market approach, as it eventually led to less use of buses, causing more pollution, and reduced choice due to re-monopolisation of the industry. Green consumerism is rightly rejected as ineffective because it is based on false neo-liberal assumptions, in particular that the consumer has access to perfect information.
A programme based on a ‘better choice of choice’ is put forward, including decent pensions, good local services, lower energy consumption and environmental impact, and ‘restoring the specialness of travel’. Some practical examples are given to demonstrate ‘a better choice of choice’, for example opting for lower pay in return for more job security or paying more tax for better local services.
Many of the general programmatic points such as decent pensions are non-controversial commonplaces, although in fairness they do say that the report’s aim is not to present a detailed programme. The reference to travel, however, refers to the well-known green idea that it is necessary to restrict the movement of people to protect the environment. Although couched in reassuring terms here, the kernel of this argument is reactionary. And the examples used to illustrate the programme, taking lower pay in return for job security, or paying more tax for better services, do not represent a ‘better choice of choice’ but Hobson’s Choice, ie no choice for most people. If they are options at all, they are only for the already affluent. Apart from betraying a total acceptance of the status quo and a lack of any radical or even reformist thinking that challenges capitalism, the impact of these examples on the environment would be very limited.
In conclusion they say that "an important task is to renew the possibility of taking collective solutions seriously". This is unfortunately not an appeal, however timid, for real solutions based on a break with capitalism and an endorsement of democratic socialist planning, but merely a plea for the state to play a slightly more interventionist role in checking the excesses of rapacious firms. In a world driven by private profit and dominated by multi-national companies this approach will have little impact.
Some key issues are raised in this booklet, and instances of market failure exposed, but readers will have to look elsewhere for answers to the pressing environmental problems facing the planet.