Letter to Liberals: Liberalism, Environmentalism, and Economic Growth

 

Letter to Liberals: Liberalism,

Environmentalism, and Economic Growth

by James Gustave Speth
 

THIRTIETH ANNUAL E. F. SCHUMACHER LECTURES
NOVEMBER 2010, NEW YORK CITY
EDITED BY HILDEGARDE HANNUM

 

OTHER VERSIONS:    VIDEO      PAMPHLET     KOBO E-BOOK     KINDLE E-BOOK    |    SPEAKER BIO


 

Introduction by Will Raap
​MEMBER, BOARD OF DIRECTORS, NEW ECONOMICS INSTITUTE

A new economics, one that values people and nature at least as much as production and consumption is possible only through transformation of our lives, politics, education, business, and culture. To lead in this process of transformation requires a new kind of integrated thinking, combining what is and what might be, the pragmatic and the philosophical, the worst case and the hopeful. Thomas Berry—priest, cultural historian, Rhodes scholar—was such a leader. Berry said: “This we know: the Earth does not belong to man; man belongs to the Earth. All things are connected like the blood that unites us all. Man did not weave the web of life; he is merely a strand in it. Whatever he does to the web he does to himself.” E. F. Schumacher was also such a thinker. Nearly forty years ago he wrote: “Infinite growth of material consumption in a finite world is an impossibility.” Schumacher made the radical proposition that we might sacrifice economic growth to improve the quality of life. We are now beginning to fully realize the power of that idea.

It is my pleasure and an honor to introduce our first speaker, Gus Speth, another integrative thinker in the lineage of Berry and Schumacher. Gus has been at the forefront of rethinking the connection between the health of the economy and the natural world for four decades. In the introduction to his seminal 2008 book The Bridge to the Edge of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability Gus wrote: “The pattern is clear. If we could speed up time, it would seem as if the global economy is crashing against the earth, the great collision. And like the crash of an asteroid, the damage is enormous. For all the material blessings economic progress has provided, for all the disease and destitution avoided, for all the glories that shine in the best of our civilization, the costs to the natural world and the cost to the glories of nature have been huge and must be counted in the balance as ultimately a tragic loss.” But after this ominous beginning, Gus ends with something very hopeful, I think. He says: “Many of our deepest thinkers and many of those most familiar with the scale of the challenges we face have concluded that the transitions required can be achieved only in the context of what I will call the rise of the new consciousness. For some it is a spiritual awakening, a transformation of the human heart; for others it is a more intellectual process of coming to see the world anew and deeply embracing the emerging ethic of the environment and the old ethic of what it means to love thy neighbor as thyself. But for all of this it involves major cultural change and a reorientation of what society values and prizes most highly.”

Gus Speth is one of America’s most influential environmental activists. He has helped shape the environmental movement through his active role in national and international environmental organizations and as an advisor to U.S. and world leaders. In 1970 Gus co-founded the Natural Resources Defense Council; he was chair of the U.S. Council on Environmental Quality and helped develop President Carter’s environmental policies. In 1982 he founded and was president of the World Resources Institute and from 1993 to 1999 administered the United Nations Development Program.

Gus currently serves on the boards of the New Economics Institute, New Economy Network, Natural Resources Defense Council, World Resources Institute, Rockefeller Brothers Fund, One Sky, and Institute for Sustainable Communities. Those are just some of the organizations that are part of the new economics matrix. As a distinguished graduate from Yale School of Law and a Rhodes scholar Gus taught environmental and constitutional law at Georgetown Law School and later served as the dean of the Yale School of Forestry and Environmental Studies until his retirement in 2009. Best of all, in 2010 Gus joined the faculty of the Vermont Law School, and he and his wife Cameron moved to Stratford, Vermont. I say “best” because Vermont now can benefit from his wisdom, leadership, and unique skills as an entrepreneurial change agent as we in Vermont try to figure out how to help build our own “bridge to sustainability.”

 


 

I’d like to thank the New Economics Institute, and Susan Witt in particular, for this opportunity. Under Susan’s leadership, over the years the Schumacher Lectures have opened many a new horizon, pointing the way to a better world. I’m proud to be part of this effort and proud to be speaking today along with Neva Goodwin and Stewart Wallis.

I want to talk with you about liberalism, environmentalism, and economic growth.  Many of us, I think, bestride the uneasy gap that separates American liberalism and American environmentalism. We have a foot in both camps, and if we were asked by a pollster, we would say “yes” to liberal and “yes” to environmentalist. Progressive souls in Congress generally support both causes eagerly. The Black Caucus has one of the strongest environmental voting records in the Congress today.  But between the people and the Congress there are the organized groups advocating for the two causes, and they typically, I hate to say it, go their own separate ways. I think that's true of the progressive community as a whole, with every progressive cause in its own silo. There's much less silo-ing on the right, where the typical think-tank or advocacy group will cover everything from stripping the EPA of its power to address climate change to ensuring that the rich are minimally taxed. I think they have something to teach us.

Today I want to argue that the walls separating liberals and environmentalists must be breached. If we are to succeed, there must be a fusion of progressive causes, we must forge a common agenda, and together we must build a mighty force on the ground, at the grassroots. This progressive fusion is essential—first of all, because we are stronger if we support each other. We are better together. That should be enough of a reason, given the formidable forces we face today, forces that certainly gained strength in the recent mid-term elections in the United States. But there are other, deeper realities to consider beyond mere alliance.

For their part, environmentalists are slowly coming to see that real progress on their issues will remain elusive unless the liberal agenda of social justice and political reform is steadily realized. In a land of pervasive economic insecurity and stark inequality like ours, American environmentalists will keep losing. In such a land, the economic will continue to trump the environmental, and environmentalists will continue to live in a strange place where they can save the planet only if it helps the economy.

In a similar way, environmentalists will also keep losing if American politics remains as it is today. To point to just one indicator, Peter Barnes notes that “the ‘influence industry’ in Washington now spends $6 billion a year and employs more than thirty-five thousand lobbyists [and those figures are from a few years ago]. . . . [I]n a capitalist democracy, the state is a dispenser of many valuable prizes. Whoever amasses the most political power wins the most valuable prizes. The rewards include property rights, friendly regulators, subsidies, tax breaks, and free or cheap use of the commons. . . . We face a disheartening quandary here. Profit-maximizing corporations dominate our economy. . . . The only obvious counterweight is government, yet government is dominated by these same corporations.”

Environmentalists need for liberals to succeed, but what about the opposite? Do liberal groups that fight for social and political improvements need for environmentalists to succeed? I believe the answer is clearly yes. For example, environmental success in the areas of climate and energy would usher in an era of much needed growth in green jobs. Also, the new rights-based approach to environmental protection is embracing liberal themes like climate justice, the right to food and water, the right to cultural survival, and more. But I would like to stress the liberal stake in environmentalism at a deeper level.

Consider a world in which environmentalists continue to lose on the big issues like climate change. Many of our most insightful observers today see current trends taking us to some type of collapse, catastrophe, or breakdown in our society. They see climate change and other environmental crises as leading ingredients in a devil’s brew that includes such stresses as population pressures, peak oil and other energy supply problems, economic and political instabilities, global income disparities, terrorism, failed states, nuclear proliferation, and other similar threats.

A world of environmental failure would be an increasingly nasty place. A world where environmentalists fail is a world of food and water shortages; sea- level rise; increasing heat waves, fires, floods, storms, droughts, and other so-called “natural” disasters; deforestation, desertification, and biotic impoverishment; pollution and toxification; energy shortages; and additional unpleasant surprises. This is not a world where the concerns of the poor and the powerless or even the average Joe are likely to fare well, and politics in such a world could move in unfortunate directions. For example, some who have constructed scenarios of the future see a continuation of “business as usual,” staying on the same path we're on now, as leading us to a “Fortress World.” Here is how Paul Raskin and his colleagues at the Tellus Institute describe a fortress world. They present it in global terms, but it could happen anywhere:          

The global economy spawns a new class of internationally connected affluent. But there is a counterpoint—the billions of desperately poor whose boats fail to rise with the general economic tide. . .

As the level of poverty increases and the gulf between rich and poor widens . . . the remnants of the institutional capacity and moral commitment to global welfare are lost. Meanwhile, environmental conditions deteriorate. Multiple stresses—pollution, climate change, ecosystem degradation—interact and amplify the crisis. Disputes over scarce water resources feed conflict in regions with shared river basins. Environmental degradation, food insecurity and emergent diseases foster a vast health crisis

 In this atmosphere of deepening social and environmental crisis, conflict feeds off old ethnic, religious and nationalistic tensions. Poor countries begin to fragment as civil order collapses and various forms of criminal anarchy fill the vacuum. . . . The bite of climate change and environmental devastation grows fiercer. The affluent minority fears it too will be engulfed by rampant migration and violence and disease. . . .

A system of global dualism—some call it a Fortress World—emerges from the crisis. The separate spheres of the haves and have-nots, the included and excluded, are codified in asymmetrical and authoritarian legal and institutional frameworks. The affluent live in protected enclaves in rich nations and strongholds in poor nations—bubbles of privilege amidst oceans of misery. In the police state outside the fortress, the majority is mired in poverty and denied basic freedoms.

In a similar way, my friend Clive Hamilton reports on a conference in 2009 of climate experts at Oxford, where the question “Can we continue to gamble with democracy?” came up.  The point was made that slashing emissions may require much less democracy and something akin to a tyranny, benevolent or otherwise.  But as Hamilton notes, tyrannies are rarely benevolent for long.

In recent years military experts and others have warned repeatedly that climate disruption could lead to humanitarian emergencies, climate refugees, conflicts over water and other resources, failed states, extreme North-South tensions, and any number of further threats to international security and stability. A new book just came out with the title Climate Wars. Of course, there is a lot of speculation in all of these musings about what the future might hold for us, but at a minimum one can conclude that the liberal program—the liberal agenda of democracy and peace and rights and dealing with our social issues—is threatened by unfolding climate and other environmental trends. We know that in times of great stress and loss and instability, societies can tend to illiberal answers. Liberals need to appreciate how serious and near-term the environmental threats actually are. Political and social systems are threatened, not just ecological ones. Liberals, and indeed all of us, need to recognize that these environmental threats are much too serious to leave to the environmentalists.

There is another line of inquiry that also points to the need for the greening of liberalism. This sphere is opened up not by thinking about a world of environmental failure but by thinking about the requirements for environmental success. Ideas coming forward today from cutting-edge environmentalism offer the potential to strengthen the liberal agenda; at the same time, environmental analysis is pointing to some novel policy prescriptions that are definitely at odds with prescriptions regularly urged by American liberals. In both areas, I believe, the new environmental thinking may have something to offer American liberals.

The most important way in which this latest environmental thinking conflicts with the current liberal agenda is on economic growth. Over the years I have read many books by our leading liberals, most recently Robert Reich’s Aftershock, and I attend daily to the excellent online liberal news and opinion summary, “Campaign for America’s Future”; I read and admire both The Nation and The American Prospect. I admire what they're doing and feel that I'm part of that liberalism. So I know that American liberals tend to be strong advocates of economic growth. Indeed, the way the growth issue is perceived in Washington today, those fighting the current battles there have little choice but to adhere to this growth mantra. Yet a growing number of environmental thinkers are urging a different perspective. They see—and, indeed, I see—a world where past growth has brought us to a perilous state environmentally; where we are poised for unprecedented increments in growth; where this growth is proceeding with wildly wrong market signals and without needed constraints; and where a failed politics has not meaningfully corrected the economy’s obliviousness to environmental needs.

In his book Prosperity Without Growth Tim Jackson, a leading British economist, frames the growth issue this way: “During the [period since 1950] the global economy has grown more than 5 times.” The size of the world economy is on track to double and then double again by mid-century. Jackson notes:

This extraordinary ramping up of global economic activity has no historical precedent. It’s totally at odds with our scientific knowledge of the finite resource base and the fragile ecology on which we depend for survival. . . . A world in which things simply go on as usual is already inconceivable . . . . For the most part, we avoid the stark reality of these numbers. The default assumption is that . . . growth will continue indefinitely. Not just for the poorest countries, where a better quality of life is undeniably needed, but even for the richest nations where the cornucopia of material wealth adds little to happiness and is beginning to threaten the foundations of our well-being.

The reasons for this collective blindness are . . . easy enough to find. The modern economy is structurally reliant on economic growth. . . . Questioning growth is deemed to be the act of lunatics, idealists and revolutionaries.

But question it we must. The idea of a non-growing economy may be an anathema to an economist. But the idea of a continually growing economy is an anathema to an ecologist. No subsystem of a finite system can grow indefinitely, in physical terms. Economists have to be able to answer the question of how a continually growing economic system can fit within a finite ecological system.

The only possible response to this challenge is to suggest—as economists do—that growth in dollars is “decoupled” from growth in physical throughputs and environmental impacts. But . . . this hasn’t so far achieved what’s needed. There are no prospects for it doing so in the immediate future. And the sheer scale of decoupling required . . . staggers the imagination.

Jackson concludes, “In short, we have no alternative but to question growth.” And that questioning must begin soon. Consider the following recent headlines:

             “Heat Waves Could Be Commonplace in the U.S. by 2039”;
            “Glacial Melt and Ocean Warming Drive Sea Level Upward”;
            “Indian Ocean Sea Level Rise Threatens Millions”;
            “Melting Mountains Put Millions at Risk in Asia”’
            “Greenland Glacier Slide Speeds 220 Percent in Summer”;
            “Ocean Acidification Unprecedented, Unsettling”;
            “Fifth of Vertebrates Face Extinction”;
            “World’s Mangroves Retreating at Alarming Rate”;
            “Midcentury Water Shortages Loom in 1 of 3 Countries”;
            “Depletion of Aquifers Is a Looming Tragedy.”

The existential issue of global warming and climate disruption is particularly worrying. Many analysts have concluded that it will probably be impossible to reduce greenhouse gas emissions at required rates in the context of even moderate economic growth. The needed rates for reducing the carbon intensity of economic output are simply too high in an economy that's growing at a significant rate.  In The Bridge at the Edge of the World I indicated that in order to reduce U.S. carbon emissions by 80% between now and 2050, the carbon intensity of production would have to decline by 7% a year, every year, for 40 years if the U.S. economy is growing at a modest rate of 3% a year. That’s a huge transformational shift. It involves wringing carbon out of a fairly rapidly growing economy at a phenomenal rate.

The New Economics Foundation in London, our sister organization, which has contributed so much to the new economic thinking, recently completed a thorough overview of whether climate goals can be met in the context of growth. The study is entitled “Growth Isn’t Possible,” and that’s an appropriate title, given the conclusion it came to. The New Economics Foundation quotes favorably from this conclusion: “Economic growth in the OECD cannot be reconciled with a 2, 3, or even 4˚C characterization of dangerous climate change.”

We should be able to solve this puzzle.  In his book Managing Without Growth, Canadian economist Peter Victor presents a model of the Canadian economy that shows “it is possible to develop scenarios over a 30 year time horizon for Canada in which full employment prevails, poverty is essentially eliminated, people enjoy more leisure, greenhouse gas emissions are dramatically reduced, and the level of government indebtedness declines, all in the context of low and ultimately no growth.” The New Economics Foundation has an ambitious effort underway to expand on this work.

It’s essential that we move soon to resolve the difference between liberals and environmentalists on economic growth. A crucial question to ask is whether it is possible to successfully craft a common platform and agenda among environmentalists and liberals. Is it possible that such a platform might contribute to the challenge recently laid down by liberal thinker Mark Schmitt to forge a persuasive alternative vision for the U.S. economy? “It’s time to get the idea machines cranked up,” he writes; “What we’re looking for now aren’t political answers, incremental reforms, or bargaining chips. . . . We need clarity about just how different the economy will be, even after the recession ends, and a strategy for how we can, once again, make sure that the vast majority of people will have a place in it.” Can we forge a common agenda between environmentalists and liberals? Can we rise to this challenge that Mark Schmitt has given us?

Well, nothing ventured, nothing gained, so let me offer for your consideration a first draft of such a platform and agenda for progressive fusion. You be the judge. Because of the time factor, I will concentrate almost exclusively on domestic, not foreign, affairs.

 

A Platform for Progressives

We must begin by acknowledging that today’s political economy is failing our country. It's a failure that reaches several spheres of national life—economic, social, political, and environmental. Indeed, our country can be said to be in crisis in each of these four areas.

The economic crisis of the Great Recession brought on by Wall Street financial excesses has stripped tens of millions of middle-class Americans of their jobs, homes, and retirement assets.

The social crisis of extreme and growing inequality has been unraveling America’s social fabric for several decades. A tiny minority have experienced soaring incomes and accumulated grand fortunes while wages for working people have stagnated despite rising productivity gains and poverty has risen to a 30-year high. Social mobility has declined, the middle class is disappearing, schools are failing, prison populations are swelling, employment security is a thing of the past, and American workers are putting in more hours than workers in other high- income countries.

The environmental crisis, driven by a ruthless drive to grow profits and expand the economy regardless of the costs, is disrupting Earth’s climate and impoverishing its biota.

The political crisis is reflected in governmental paralysis and a democracy that is weak and shallow and corrupted by “so damn much money”—the title of a book by Robert Kaiser.

If we are to seek something new and better, then, and move beyond these four crises, the place to start is to ask why today’s system of political economy is failing so broadly. The answer, I think, is that key features of this system work together to produce a reality that’s highly destructive. An unquestioning society-wide commitment to economic growth at any cost; powerful corporate interests whose overriding objective is to grow by generating profit, including profit from avoiding the social and environmental costs they create and from keeping wages and benefits low; markets that systematically fail to recognize externalized social and environmental costs unless corrected by government, which is itself beholden to corporate interests and thus not strongly inclined to curb corporate abuses; and a rampant consumerism spurred on endlessly by sophisticated advertising—all combine to deliver an ever-growing economy that is insensitive to the needs of people and place and planet.

For the most part, we have lived and worked within this current system of political economy, but I think we're seeing now that working within the system will not succeed in the end when what we need is transformative change in the system itself. The case for immediate action on issues like climate change, job creation, and unemployment is compelling, but the critical environmental and social challenges we face are not going to yield to problem-solving incrementalism. Progressives have gone down the path of incremental reform for decades, and we’ve learned that it is not enough.

We need to reinvent the economy, not merely restore it. The roots of our environmental and social problems are systemic and thus require transformational change, require the shift to a new economy, a sustaining economy based on new economic thinking and driven forward by a new politics. Sustaining people, communities, and nature must henceforth be seen as the core goal of economic activity, not some hoped-for by-product of market success, growth for its own sake, and modest regulatory interventions. This is the paradigm shift we seek: the shift to a sustaining economy.

Today, the reigning policy orientation holds that the path to greater well-being is to grow and expand the economy; productivity, profits, the stock market, and consumption all have to go up. This growth imperative trumps everything else. It can undermine our families, our jobs, our communities, the environment, and our sense of place and continuity in life because it is confidently asserted and, in fact, widely believed that growth is worth the price that must be paid for it. But an expanding body of evidence is now telling us to think again. Economic growth may be the world’s secular religion, but for much of the world its god is failing as it underperforms for billions of the world’s people and creates more problems than it’s solving for those of us in the rich, affluent societies. As Herman Daly and others have pointed out, we've entered an era of uneconomic growth. The never-ending drive to grow the overall U.S. economy hollows out our communities and the environment; it fuels a ruthless international search for energy and other resources; it fails at generating sufficient jobs; and it rests on a manufactured consumerism that is not meeting the deepest human needs. Americans are substituting growth and consumption for dealing with the real issues, for doing the things that would truly make us better off. Psychologists have pointed out that while economic output per person in the United States has risen sharply in recent decades, there has been no increase in life satisfaction, and levels of distrust and depression have increased substantially.

It’s time for our country to move to a post-growth society where working life, the natural environment, our communities and families, and the public sector are no longer sacrificed for the sake of mere growth in the Gross Domestic Product (GDP); where the illusory promises of ever more growth no longer provide an excuse for neglecting to deal generously with our country’s compelling social needs; and where true citizen democracy is no longer held hostage to the growth imperative. How many times have we heard, "If we don't keep growing, we'll have to deal with the redistribution problem in our country”? Well, we have had a lot of growth, and we have not dealt with the redistribution problem in our country, which must be addressed. 

When you think about it, it is the growth imperative that controls us: the necessity for growth puts American politics in a straightjacket—a golden straightjacket, as Tom Friedman would say—and it gives the real power to those who have the finance and technology to deliver growth. Of course, it is clear that even in a post-growth America a certain amount of growth is needed: we need to grow good jobs and the incomes of the poor and the working Americans; we need to grow the availability of health care and the efficiency of its delivery; we need growth in education, research and training; growth in security against the risks of illness, job loss, old age, and disability; growth in investments in public infrastructure and in environmental protection and amenity; growth in the deployment of climate-friendly and other green technologies; growth in the restoration of both ecosystems and local communities; growth in nonmilitary government spending at the expense of military spending; and growth in international assistance for sustainable, people-centered development for the half of humanity that live in poverty. These are all areas where public policy needs to ensure that growth occurs.

Jobs and meaningful work top this list because they are so important and unemployment is so devastating. We should be striving in the United States today to add half a million jobs a month if we're going to put our people back to work. But likely future rates of economic growth, say 3% a year, will reduce the unemployment rate only slightly. The availability of jobs, the well-being of people, and the health of our communities should not be forced to await the day when overall economic growth might get around to delivering them. It is time to shed the view that government mainly provides safety nets and occasional Keynesian stimuli. We must insist that government have an affirmative responsibility to ensure that those seeking decent-paying jobs find them. The surest and most cost-effective way to that end is direct spending, investments, and incentives by government, targeted at creating jobs in areas of high social benefit.

Creating new jobs in areas of democratically determined priority is certainly better than trying to create jobs by pump-priming aggregate economic growth, especially in an era when the macho thing to do in so much of business is to shed jobs, not to create them. There need be nothing temporary or second-rate about employment of this type. As William Greider recently pointed out, reversing the U.S. gung-ho stand on free-trade globalization can bolster employment at home. To keep investment and jobs at home, he notes, Washington needs to “rewrite trade law, tax law, and policies on workforce development and subsidy.”

I want to call your attention particularly to a set of policies that are central, it seems to me, to a new economy, government policies that will slow GDP growth, thus sparing the environment, while simultaneously improving our social and environmental well-being. Such policies exist: 

—shorter workweeks and longer vacations that allow more time for families;
       
—greater labor protections, job security, and benefits, including generous parental leaves;
                        
— guarantees to part-time workers and combining unemployment insurance with part-time work during recessions

—restrictions on advertising; a new design for the twenty-first-century corporation, one that embraces rechartering, new ownership patterns, and stakeholder primacy rather than shareholder primacy;
—incentives for local and locally owned production and consumption; strong social and environmental provisions in trade agreements;

—rigorous environmental, health, and consumer protection, including full incorporation of environmental and social costs into prices—for example, through mandated caps or taxes on emissions and extraction;

—greater economic and social equality, with genuinely progressive taxation of the rich—including a progressive consumption tax—and greater income support for the poor;

—heavy spending on neglected public services; and initiatives to address population growth at home and abroad.

If you take this agenda as a whole, these policies would undoubtedly slow GDP growth, but well-being and quality of life would improve, and that's what really matters.

In this mix of policies, Juliet Schor and others have stressed the importance of worktime reduction; for example, if productivity gains are accompanied by shorter worktime, then personal incomes and overall economic growth can stabilize while quality of life increases. She points out that workers in Europe put in about 300 fewer hours each year than Americans.

Beyond policy change, another hopeful path into a sustainable and just future is to seed the landscape with innovative models. I think one of the most remarkable and yet undernoticed developments in the United States today is the proliferation of innovative models of “local living economies,” sustainable communities and transition towns, and for-benefit businesses that prioritize community and environment over profit and growth. The community-owned Evergreen Cooperative in Cleveland is an excellent case in point. As Gar Alperovitz and his colleagues have pointed out, state and federal programs can be crafted to support community development and finance corporations, local banks, community land trusts, employee and consumer ownership, local currencies and time dollars, municipal enterprise, and nonprofits operating businesses. All of this can be encouraged with appropriate state and federal programs.

Now, I submit that running parallel to these changes in policy there must be a change in national values. In particular, it’s time to move beyond our runaway consumerism and hyperventilating lifestyles. There are certainly mounting environmental and social costs of American affluence, extravagance, and wastefulness. Even today’s larger homes and the gigantic lots on which they sit are too small to contain all the stuff we are accumulating. The self-storage industry didn’t begin until the early 1970s, but it’s grown so rapidly that its floor space would now cover an area the size of Manhattan and the city of San Francisco combined. We have the disease of affluenza, from which we need a speedy recovery.

The good news is that more and more people sense at some level a great misdirection of life’s energy. We know we’re slighting the things that truly make life worthwhile. In one survey 81% of Americans said the country is too focused on shopping and spending; 88% said American society is too materialistic. Psychological studies show that materialism is toxic to happiness, that more income and more possessions don’t lead to lasting gains in our sense of well-being or satisfaction with our life, and that what does make people happy are warm personal relationships and giving rather than getting.

A revolutionary new product that is trying to make it in the marketplace is Nothing: “Guaranteed not to put you in debt… 100% nontoxic… sweatshop-free… zero waste… doesn’t contribute to global warming… family-friendly… fun and creative!” There were actually young women who went into the malls and tried to sell Nothing. When they were asked to leave, they refused—and were promptly arrested!

The transformation of today’s economy obviously requires strong and effective government action. Inevitably, the drive for transformative change that we’re discussing leads to the political arena, where a vital, muscular democracy steered by an informed and engaged citizenry is needed. Yet merely to state the matter this way suggests the enormity of the challenge. The ascendancy of market fundamentalism and an anti-regulation, anti-government ideology has been particularly frightening, but even if my progressive agenda were realized, it would still leave deeper, more long-term deficiencies. Thus, just as we need a new economy, we need a new politics.

There are many reasons why government in Washington today is too often more problem than solution: It is hooked on GDP growth; it is heavily influenced by the same corporations and concentrations of wealth it should be seeking to regulate and revamp; and it’s hobbled by an array of dysfunctional institutional arrangements, beginning with the way presidents are elected, elections are funded, and Congressional voting occurs.  The House passed over 400 pieces of legislation in 2009 and 2010 that never made it to the Senate, thanks to the insane, anti-democratic Rule 22 and the way it's implemented in the Senate.

Building the strength needed for change requires, first of all, a political fusion among progressives, and that fusion should start with a unified agenda. As I've stressed, this agenda would embrace a profound commitment to social justice and environmental protection; a sustained challenge to consumerism and commercialism and the lifestyles they offer; a healthy skepticism of growth mania and a democratic redefinition of what society should be striving to grow; a challenge to corporate dominance and a redefinition of the corporation and its goals; a commitment to an array of prodemocracy reforms in campaign finance and elections and the regulation of lobbying—and much more. A shared agenda would also include an ambitious set of new national indicators beyond GDP to inform us of the true quality of life in America. GDP is, in fact, a perfectly terrible measure of national well-being and progress. And because we tend to get what we measure, we should measure what we want.

 

Conclusion

Thus endeth a modest effort at a platform for progressive fusion and my contribution to it.  How good is it at uniting environmentalists and liberals and other progressive constituencies? Well, I would guess everyone agrees that some of it is ahead of its time, certainly in terms of U.S. politics today. Yet if some of the ideas I just presented seem politically impracticable today, just wait until tomorrow, because more and more people will realize that business as usual is the utopian fantasy whereas creating something very new and different is the practical, pragmatic way forward.

My hope is that we can soon begin a sustained dialogue among liberal and environmental thinkers on the need for a common platform specifically on the issue of growth and generally on the goal of progressive fusion. In the platform I just presented, I endeavored to find a way to support the goals that liberals see growth as supporting—notably job creation—while still accepting what I see as the underlying reality, namely that GDP growth in America today not only isn't delivering on its intended purpose of bettering human lives but is also at the root of environmental losses and the emerging climate crisis. I hope the liberal community will come to terms with the now large body of environmental scholarship on this issue and do so before it’s too late.           

I doubt that we will miss our growth fetish when we finally say good-bye to it. We’ve had tons of growth—while wages stagnated, jobs fled our borders, life satisfaction flatlined, social capital eroded, poverty mounted, and the environment declined.

The environmentalists, for their part, have also got to abandon their silos and embrace, for example, the excellent social agenda laid out by Robert Reich in his book Aftershock, where he advocates a series of far-reaching and admirable measures to address America’s vast social insecurity and income disparities. Reich bases his case for such measures on the need to restore the purchasing power of the middle class so that its consumerism can in turn spur economic growth and create jobs. While I support Reich’s prescriptions, I believe that greater economic security and equality will eventually weaken consumerism and lead to less consumption. Over time, Reich’s measures would, happily, dampen consumerist impulses, as Robert Frank and others have noted, and a virtuous circle becomes possible because, as Amitai Etzioni observed recently, a societal shift away from consumerism will make redistribution policies more feasible.

Personally, I find hope that meaningful change is indeed possible. I find that hope in many places today. Progressive causes are turning to the task of building grassroots political strength; there’s a proliferation across the American landscape of new models of enterprise and community development and revitalization; the questioning of consumerist lifestyles is growing; and people are clearly fed up with our failing politics. Then there’s also the birth of a series of “new economy” organizations and initiatives that are committed to linking these issues and forging new strengths for systemic change. Among these initiatives, in addition to the New Economics Institute, are the New Economy Network, the New Economy Working Group, the 3rd Millennium Economy Project, and the Capital Institute. Included here are projects that seek to move America beyond consumerism and to dethrone GDP, efforts in which Demos and the Center for a New American Dream and numerous others groups are involved. If you’re interested, I encourage you to join with us in these efforts and help us build the support these initiatives need.

To conclude, let me pull together a bit what I’ve said here today. What if the following occurred? Indeed, ask yourself if the following is occurring today: a decline in the system’s legitimacy as it fails to deliver social and environmental well-being, together with a mounting sense of crisis and great loss, both of these occurring at a time of wise leadership and accompanied by the articulation of a new American narrative or story, by the appearance around the country of new and appropriate models, and by the projection of a powerful set of new ideas and policy proposals confirming that the path to a better world does indeed exist. Were all this to come together, I think real change would be possible, and the prospects for success would be enhanced and advanced tremendously by the evolution of a new social movement that is powerful and inclusive.

All the progressive causes face the same reality. We live and work in a system of political economy that cares profoundly about profit and growth. It cares about society and the natural world in which it operates primarily to the extent that it is required by law to do so. And so it is up to us as citizens to inject values of justice, fairness, and sustainability into this system, and government is the primary vehicle we have for accomplishing this. We are failing today mainly because our politics are too enfeebled and government is more and more in the hands of powerful corporations and concentrations of great wealth. Our best hope for real change is thus a fusion of those concerned about environment and social justice and true democracy into one powerful progressive force. We have to recognize that we are all communities with a shared fate. We will rise or fall together, so we’d better get together.
 

  

Excerpts from the Question Period  

I would like to preface what I’ll say with what Gandhi said: a small group of committed people has the power to change the world; and Victor Hugo said there's nothing more powerful than an idea whose time has come. So it’s not about the numbers. My feeling is that the time for these ideas has come. I'm trying to find funding for a program I’m developing for public television based on the idea of “kaizen,” which is explained by Robert Maurer in his book, One Small Step Can Change Your Life: The Kaizen Way.  The sensibility of kaizen is based on your ideas of constant improvement and development by taking small steps. It is a Japanese word for an American idea related to how this country got out of the Depression by means of the manufacturing build-up during World War II when 15 million men left the workforce and women went to work in factories assembling airplane engines, raising the nation’s manufacturing capacity. Even Japanese pilots said their engines could not compete with those put together by American housewives. How did that happen? By telling ordinary people that their small efforts made a big difference. If tens of thousands of ordinary people take tens of thousands of small steps, transformation happens. When Eleanor Roosevelt said ordinary people could make a contribution to the war effort by planting victory gardens, millions of ordinary Americans planted victory gardens. The astounding statistic is that 40 percent of all the vegetables grown and consumed in the United States through those war years came out of people's backyards. General MacArthur took this same idea to Japan during the occupation, offered it to Japanese businessmen in private talks, and it became the root of what's called the Japanese economic miracle. Constant, steady improvement by taking small steps. Maurer has brought this idea into the realm of relations, work, and particularly health (he’s been with the UCLA Medical School for 20 years). His website is scienceofexcellence.com. The point is that when so many people took small steps, under conditions far worse than anything we're facing now, this country succeeded. And when Japan was in ashes at the end of the war, the same idea played a role. Does this make sense to you?

It makes a lot of sense to me, and I'm moved by what you’ve said. I'd like to learn more about kaizen, which is new to me. I think there are different types of small steps. There are small steps that get you somewhere in terms of deep systemic change and real transformation, and then there are small steps that just reinforce the status quo. Too much of the latter kind of incrementalism is what we've had in the past. We need to think about how to make the right kinds of small steps.

 

I use your latest book in a course I teach at the University of Pennsylvania in organizational dynamics around sustainability. You spoke of a fortress world; I would submit that we are living in a fortress world right now, and that world is starting to be felt here in the United States. You also spoke of the need for a new American dream, a new vision. I'm wondering who you think best expresses that vision today. If I were to answer the question myself, I would say Paul Hawken.

I think you're right to reference a fortress world. My students make the same point. They see a lot of evidence for it. And of course projections of what the future might look like are a recurring theme in our science fiction. Think about gated communities and private military forces and all that goes with them; think about the fact that the Defense Department budget is about  $700 billion a year, which is more than the rest of the world put together. We have something like 750 deployments, mostly military bases, in countries scattered all over the planet. We have covert operations in more countries than we can imagine.

To answer your question, my hero is Bill Moyers.

 

I don’t think the liberal world appreciates the good side of business. There's something called corporate social responsibility. The US Chamber of Commerce, which I think is causing a lot of trouble, does have a business civic leadership center. I know there are bad business people, but there are good ones, and they don't get much airtime. In addition to Ben and Jerry there are others in companies as big as Microsoft who are trying to figure out how we can change the values of business so that business can be part of the solution. This is something we should keep in mind as we build this wonderful collaborative effort, which I fully support, of bringing the environmentalists and the progressives together.

Buckminster Fuller was my first inspiration. One of his many books is called Utopia or Oblivion: The Prospects for Humanity.  He realized that the Malthusian win-lose paradigm is no longer true. Because we can do more with less, we really can feed, clothe, and house everyone. I want people to see that the gut feeling that there’s not enough for everyone is no longer valid.

I may be a little harsher on business than you are, but I do see impressive developments in American companies and companies elsewhere. There’s been a huge sea-change from when we started 40 years ago, I'll tell you that. I also think that the best leaders in a lot of companies would love to be freed up to do more than they are able to do now because of the system they're operating in. We have to figure out a way to unleash that potential.

 

We are dealing with the need to depose money and power as our gods. One of the central problems in our society is that everything is done in the name of both. I'm in the field of holistic psychology, and I see this issue as essentially psychological. The entire psychology of the drive for more is based fundamentally on fear, which is the function of one part of our brain, the primitive reptilian brain. Not until people graduate to higher levels of inner performance will we reach a better result in the outer world. This is an area I always find missing in these kinds of conversations. We're not really looking at the human being, which we must do in order to make true progress; otherwise we're just manipulating the externals.

I agree wholeheartedly with the previous questioner that business is not adequately recognized as a possible cure. In addition to the psychological aspects I just mentioned, I think it’s business that has brought us to the brink of disaster. I also think it’s business that can bring us solutions; there are new businesses being spawned that have integrity as well as admirable human and environmental values.

Finally, while I think that your analysis was on point in many ways, what was not included was the "how to." How do we bring together and implement the ideas of the various stakeholders who are not currently aligned?

I couldn't agree more with you about the need to delegitimize or deconstruct the reigning mythology in this country that is so deeply embedded in the national psyche. It leads us down a lot of wrong paths. I think we do have to challenge that. There's a very interesting piece of work that was done by a friend of mine, Tim Kasser, who is a psychologist, and his colleague Tom Compton at the World Wildlife Fund. They have worked with the psychological framework of a circle. On one side of the circle is a whole set of affirmative and positive values, and on the other are the fear factors you were describing. They have tried to analyze the way that society keeps reinforcing, through various mechanisms, the negative side of the set of values, and they describe what can be done to change that.

In terms of next steps, I think there are some simple things that can be done. It seems to me that some of the leading thinkers in various progressive communities need to spend quality time with one another and start thinking about issues that have been raised. That's not happening today, as far as I can tell. We had a meeting in Washington not long ago when the Institute for Policy Studies—which I think is very good at bridging these issues and connecting the various dots—brought together people from different camps to talk about issues of liberalism and environmentalism and growth. They had a very good conversation, but it was only preliminary and just the first step. We need to be talking to one another and figuring out how to join forces.

 

Like you, I recognize the need for and embrace the vision of a steady-state economy and a different way of measuring progress and GDP, but I struggle with how to reconcile a steady-state economy with the enormous national debt we have. How can we pay it without growth, or maybe the question should be what kind of different growth would help? I can think of extreme ways, but is there a realistic model out there that addresses this situation?

I'm delighted to say that there are two more speakers today, and I'm sure they can contribute to an answer. Peter Victor, Canadian economist and fellow NEI board member, has a model that shows much better performance on that score in the Canadian economy. I think one thing to do is to build the concern you raise into macro-economic models of future performance and see what it takes to find a resolution. Right now, we are clearly hooked on growth. Just imagine what happens in a business-as-usual scenario if the growth rate decreases and the tax rate stays the same: the government plunges ever more deeply into debt. But there are some fairly straightforward steps to take. Groups like the Institute for Policy Studies that I mentioned a moment ago and others, prompted in part by the Simpson-Bowles proposals in Congress, have looked for ways to reduce the deficit dramatically—and have found them. We could tax bad things that we want to discourage; Peter Victor's model has a whopping carbon tax, as I recall. We could put to better use the empire portion of the approximately $1 trillion we are currently spending annually on national security/empire. A book I recommend, particularly to those of you who have trans-Atlantic visions, is Europe’s Promise by Steven Hill, which is a comparison between Europe and the United States today. He argues that Europe provides a much better model for going forward on a host of fronts. It's going to require big changes in order to follow suit.

 

I've heard that Plenitude by Juliet Schor is another important book.

I shortened my talk to stay within 50 minutes, but I did have a paragraph about Julie and her book Plenitude. A good deal of modeling and thinking of ways to make things work out and get people employed—dealing with all the challenges simultaneously, as Peter Victor's model does—results in reducing the overall work year. This is particularly hopeful for Americans, who now work on average about 300 hours a year more than Europeans do.

 

Your comment about encouraging leaders to talk with one another reminds me of one of the Berrigan brothers saying, "Don't just do something, sit there." It’s important for us to contemplate what we’re doing, even as political activists.

Two points I'd be interested in your reaction to. One is Transition Towns, which is a global movement to create community groups that reduce their carbon footprint and build social capital through co-teaching environmental practice to people in the community. As it turns out, this weekend there are three national Transition Town conferences—one in Scotland, one in Brazil, and one in Germany—that I’ve heard are in touch with each other. I find that to be a real point of hope.

A second point of hope that is a little surprising to me is the rise of digital, cheap communication. It used to be that new ideas came from books, conferences, people getting together in the same town. In the past year, though, I've been on skype and facebook and gmail with all sorts of people, and I find my ability as a citizen, as a global citizen, to be dramatically expanded. To be doodle scheduling phone conferences with people from Peru and Australia as well as the US is a delight, and I think it provides a real lubricant to creating a global citizen's movement. I learned recently that in the late 1930s and the 1940s there was a global citizens movement for a United Nations. Then in 1945 President Roosevelt mobilized a number of citizen groups, the YWCA, and a number of churches to support ratification of the United Nations instead of having it fail in the Senate as it did in 1920. Since 1989 we’ve never really re-examined the question of global government. I wonder if the rise of cheap, digital communication might encourage that discussion.

Those are pertinent comments. Transition Towns are a positive force. I've read the books about them; I go to the websites. Any of you who want to learn about them can google transition towns. The movement started in England and has now spread through the United States. It began with a powerful environment/ energy premise that we have to deal with. Yes, I think it’s a hopeful movement.

In terms of information, I would urge you all to watch the evolution of the Key National Indicators Act and the program of the State of the USA, a tax-exempt organization founded in 2007. The Republicans claim there’s a lot in the healthcare bill that nobody ever read. They may be right, because in the bill was a Key National Indicators Act that became the law of the land, with $70 million appropriated through the National Academy of Sciences to develop for the first time in America a system of indicators—real indicators of well-being and progress in the United States. If done well, it will be an empowering tool that will give people access to valuable information organized in an easily accessible and meaningful way. That too is hopeful, I think, along the lines of your idea of the digital commons. The Tellus Institute has been working, as have others, on this idea of a global citizen's movement. You're absolutely right, we do need a global citizens movement.

In terms of global environmental governance, I don't know who put this book up here. It's really a great book; I wrote it: Global Environmental Governance. The failure of global environmental governance is profound. I hope we'll soon find a way of recasting global governance. I worked at the United Nations for six years; I think in many ways it's the last great collection of idealists on the planet. But it is a system that needs to be reformed because a lot of it is leftovers from World War II. There need to be changes to make it into the powerful and effective institution that we need. Some of the weakest organizations in the UN are those having to do with the environment: the UNEP, for example. We don't have a world environment organization with real authority that can go toe to toe with the World Trade Organization. Unfortunately, efforts to create a world environment organization that were spawned in Europe on two occasions in recent decades and picked up 40 or 50 governments in support of it were killed off by the United States of America and a few other countries. We have not been supportive. Maybe with the new administration a new proposal might not get the same hostility from the US that it has on two previous occasions.

 

I'm an environmental economist and I teach a course at Columbia School of International Public Affairs called Poverty, Equality, and the Environment. Let me recommend a couple of books: Cornered: The New Monopoly Capital and the Economics of Destruction by Barry Lynn and Winner-Take-All Politics by Jacob Hacker and Paul Pierson. Both deal with the way the economic system has become increasingly rigged in favor of large monopolistic corporations and against ordinary people. I maintain that it's not so much that markets are a failure as it is that they have become totally manipulated to favor the large corporations at the top. This has the implication that if we can reverse the process, we can have more employment with less environmental destruction. There are lots of ways to have growth without destroying the environment, but you've got to deal with the way the system is rigged. An example I use in my class is a survey some years ago of agricultural production in 40 or 50 countries including the US. The Japanese and Taiwanese get ten times the output per acre of the US. Japan and Taiwan use very labor-intensive methods of production such as multiple cropping and small crops interlaced. In any case, we can have higher wages by moving to a more sophisticated, labor-intensive situation, and I think this is a way of cutting the Gordian knot.

Thank you. Your students are lucky.

 

In your platform for change you talked about the need for jobs and meaningful work. One of your prescriptions was democratically determined direct government spending rather than aggregate economic pump priming. How did you come to that conclusion? Jobs come from ideas and ideas are transmitted by giving people freedom, incentives, and that sort of thing. Apple wouldn’t have been created if we’d asked politicians to vote on what the next industry should be. You talked about market signals and constraints. Given that the government has failed us in various areas, why don't we have the government spend its time on creating the playing field and creating the constraints rather than letting people's unfettered ideas take hold?

Well, just look at what's going on today. The corporations are sitting on the money; the banks are sitting on the money. Nobody is focusing on job creation. The Republicans are explicit about not wanting some government proposals to succeed. They want things to be bad because they think that will help them when it comes around to voting time. If we are going to put people back to work, it's going to require government to do it. I thought the debate we had over the original stimulus bill was a good one in a sense; however, the stimulus wasn't big enough; too much of it was given away for tax reductions and not enough for focused spending, and then we didn't focus adequately on how to get the spending done in the right ways. I agree with you that government has its problems, and we can't rely on government to do everything, but we can create a framework that channels growth in certain directions. We can create incentives in the tax codes and in other laws, and we can put the money on the table. We may need to think hard about introducing some New-Deal-type programs that put people to work. That wasn't "make work" in my judgment, and a lot needs to be done now in the public sector that requires labor.

If you look at the curve that links the decline in the unemployment rate with the growth of GDP, you find that 3% per annum growth, which we would love to have today, is the point at which the unemployment rate doesn't change. You don't get declining unemployment with 3% growth in the United States. That's the average; now, there are points on the curve that are not the average. At 3% you're just taking care of the people who are already employed and the new entrants into the labor force. We are unlikely to grow faster than that in the foreseeable future. This is one reason that the economists are saying this is going to be a long recession because it's going to take forever to put people back to work. And they're right. But that's what we do, just rely on aggregate pump-priming of the economy. I think we need to be inventive about finding ways to stimulate employment more directly. We have many needs in this country that could be met that way. We know a lot about the directions in which the economy ought to go. We ought to exercise that knowledge.

 

I’d like to emphasize movement strategy. I’ve learned through the National Congress of Neighborhood Women and other groups I’ve been involved with that principled partnerships between different stakeholders are extremely important to a movement. I guess I'm asking that everyone involved in this movement in any intellectual or practical way be vocal about what groups, particularly grassroots groups, they are in partnership with or can get in partnership with. Universities should partner with community grassroots groups in their area, not only do research and projects about them but actually get behind them, their dreams and visions. Marie Cirillo is here, who's worked over fifty years in northeastern Tennessee introducing and building the community land trust movement. People are here who are involved with Haiti. I'd love to spend the day hearing about groups like these, what their resources are, and what partnerships they would welcome to move their goals forward.

I certainly agree with you. I worked with Bill McKibben and Wendell Berry and Greenpeace and others to organize a demonstration in Washington against the Capitol Hill power plant, which is within throwing distance of the US Capitol. Senator Robert Byrd from West Virginia had insured that it remain a coal-fired power plant. We were going to have a demonstration there and get arrested. A couple of things happened that were important to your point. A number of young people came to this demonstration, this peaceful march, as part of the power shift in the movement to young people who are concerned about the climate issue. But the real heart and soul of that demonstration, which was quite large, were all the people from local groups around the country who had seen the damage the coal fuel cycle had done in the mining, in the washing, in the fly ash, in the combustion process. They were the most active, the most vigorous, and the angriest people there, and it was heartening to see. If we are going to do something about the climate issue, it's going to require a huge anti-coal movement in this country that's not only going to stop new coal plants, many of which are very much in train to be built, but also will roll back the existing coal-fired power plants and substitute natural gas, for starters. Our intention at the demonstration was to get arrested, but the D.C. police are very clever. They wouldn't arrest us.

 

James Gustave Speth graduated from Yale University in 1964, attended Oxford University as a Rhodes Scholar, and graduated from Yale Law School in 1969. He served in 1969 and 1970 as a law clerk to Supreme Court Justice Hugo Black.

 A co-founder in 1970 of the Natural Resources Defense Council and a senior attorney there from 1970 to 1977, he was from 1977 to 1981 a member and then for two years Chairman of the Council on Environmental Quality under President Carter. In 1981 and 1982 he taught environmental and constitutional law at Georgetown University Law Center.

 In 1982 he founded the World Resources Institute, a Washington, D.C.-based environmental think tank and was its president until January 1993. He served as a senior adviser to President-elect Bill Clinton's transition team, heading the group that examined the U.S. role in natural resources, energy, and the environment.

In 1991 Speth chaired a U.S. task force on international development and environmental security, which produced the report Partnership for Sustainable Development: A New U.S. Agenda. From 1993 to 1999 he was Administrator of the United Nations Development Programme; under Secretaries-General Boutros Boutros-Ghali and Kofi Annan he served as Special Coordinator for Economic and Social Affairs and was also Chair of the United Nations Development Group.

In 1999 he became Dean of the Yale School of Forestry and Environmental Studies, where he taught environmental policy. Since 2009, he has been teaching at Vermont Law School.

Speth’s most recent book is The Bridge at the Edge of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability.

 

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Schumacher Center for a New Economics and James Gustave Speth