Tag Archives: Manchester City Council

Manchester City Council and Steady State Economics.

Manchester City Council and Steady State Economics.

(read this as a Word document (with appendices): Manchester City Council and Steady State Economics

Manchester City Council’s Economic Scrutiny Committee has commissioned a report on Steady State Economics.  This is potentially a very positive move- few councils and government bodies are taking the need question of ‘limits to growth’ seriously despite the overwhelming evidence of these limits (from the early 1970s onwards) and the clear evidence that the planet has passed and/or is passing several of the planetary ecosystem limits after which irreversible and damaging change is probably inevitable.

Unfortunately, the report which is now available, is disappointing.

1)  The report appears to dismiss the concept of steady state economics from the outset and therefore does not review the growing body of work available (see the Appendix 1  for some of these sources).

2)  The report fails to address the critical question about mitigating the effects of growth.  As the UK government’s Sustainable Development Commission (disbanded by the current government) showed convincingly in its report Prosperity Without Growth, improved efficiency of resource use comes about with growth (because of innovation in technology) but these improvements are only relative.  That is to say the proportion of emissions in relation to GDP reduces, but the problem is that while GDP is increasing, the absolute level of emissions (and resource use) also increases, although it is falling relatively.  The net effect of growth then is continued increasing ecosystem damage.  The report discusses these relative reductions but fails to consider the critical issue of absolute emissions.  Nor does it consider the Jevons paradox – that increases in efficiency do not produce reductions in resource use, but further stimulate resource consumption.

3) The report makes reference (in a rather obscurantist way) to endogenous growth theory.   This is contrasted to neoclassical economic theory.  But all this is really saying is that government intervention can promote growth.  The argument is not relevant to the question of a closed loop or steady state economy.

However, the idea of endogenous development is an interesting one since if taken seriously the idea of economic development (rather than growth) from within the region is relevant to the strategy of (relative) de-linking of the local economy from the global economy.   There is some discussion of these topics in the GreenDealManchester paper ‘Getting Started on the Economy”.  Not surprisingly this is incomplete work – this is difficult stuff, trying to construct alternative approaches in the face of an economic orthodoxy that is the lifeblood of the current system.  De-linking is implicitly ruled out by the report

4)  The council report is clear that there would be very tricky issues were it to promote a steady state economy (SSE):

“…even it were desirable there are no realistic prospects of developing an SSE in Manchester – as international and national policy is not geared to this goal, making any meaningful impact minimal, and seriously disadvantaging the city’s economic performance, to the detriment of its residents.”

But we need to counter this by asking “Is growth a realistic prospect anyway?” (see Appendix 2).  There has been very little growth since 2007 and there seems little prospect of the healthy (sic) 3% growth rate returning.  The city therefore needs an alternative strategy which as has been argued elsewhere would emphasise ‘good living rather than continued consumption’, increased equality, and changes in the way we live in Manchester.   Of course this cannot be done unilaterally and in isolation, but isn’t Manchester meant t be a leader, an innovator, a tail-blazer, a pathfinder – a place where tomorrow happens today?

Conclusion

The challenges of a Steady State Economy are considerable, but the council report does not provide a basis for a serious consideration of the limits to growth, nor of the strategies that would need to be adopted to manage an economy with closed-loop and steady state features in these very challenging times of zero growth.