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Review: Prosperity Without Growth

Tim Jackson’s Prosperity Without Growth (I read the second edition, published in 2016) tries to answer a question closely related to the theme of this blog: what might “prosperity” mean apart from producing ever more material goods, and how might a society achieve it? Jackson’s main motivation is the environmental one that supposes that the Earth will eventually run out of resources with which to make material goods, and he spends quite a bit of book explaining and justifying this position, but the chapters on constructing a prosperous society are of interest to this blog independently of what one thinks about how long we can continue to draw resources from the Earth.

Jackson doubts that economic growth can continue indefinitely, and doubts that producing even more material goods does much for individual welfare in rich countries anyway, but he accepts that people need work of some sort in order to feel engaged in society. So one of the main problems addressed in the book is how to keep people so engaged without expecting them to produce ever more material goods. One way, frequently discussed on this blog and elsewhere, is to reduce working hours. But Jackson additionally proposes re-framing enterprises as services (transport rather than motor vehicles, and so on); re-framing work as participation in society; investing in assets or programmes that underpin future prosperity (rather than speculating on assets prices or seeking rent from resource extraction); and shifting control of the creation of money from private banks to government.

The last point is rather technical but the first three touch on the topic of this blog to one degree or another. The first two points appeal in part to employment in service-intensive sectors rather than resource-intensive ones. Aside from reducing the number of resources required to sustain an economy, services like caring for the sick, teaching, hospitality, and so on are notoriously difficult to automate. While mainstream analyses of the economy might despair at the slow productivity growth of these sectors, and the resulting increases in the costs of these services relative to material goods, slow productivity growth does have at least one benefit: humans can still find something to keep them engaged even when automated factories churn out all of the material goods we might want. Jackson’s third point is then about making the investments in energy efficiency, education, and so on to support this kind of economy.

Plenty of commentators have observed that Western countries have been on the way to being “service economies” for some time, as agriculture and manufacturing have been either automated or sent to developing countries. Jackson nonetheless doubts that growth in services can or should replace old-fashioned growth in agriculture and manufacturing. For one, he doubts that even service economies can grow indefinitely without also growing material needs. But, from the point of view of this blog, hoping that we all get to work long hours in teaching or healthcare or hospitality would also represent its own form of perversity.

People sympathetic to Jackson’s case might take some action of their own accord—he notes the divest/invest movement as an example, and people like me can voluntarily reduce their working hours—but Jackson sees governments as stuck with a desire to protect social and environment goals on one hand, and with an economic system that demands constant growth for its stability on the other. He suggests that government needs to instead focus on setting limits on what resources can be extracted safely; restricting practices (such as advertising) designed to encourage consumerism; reducing the level of inequality in society; and adopting economic structures that favour the sort of investment already mentioned over simple growth.

I’m not holding my breath for governments to take up Jackson’s challenge; criticisms of growth have been around for a long time but mainstream economic analysis continues to go something like blah blah blah productivity blah blah blah growth. But Jackson’s thinking is relevant to the theme of this blog if only because he’s at least thinking about how society might get on without producing ever more stuff.

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