The Chinese economic downturn and the ‘Tragedy of the Commons’

Some humans will emerge from the global eco-crisis, but not necessarily before going through the ‘Tragedy of the Commons’.

That economic growth might have limiting factors was not discussed seriously until the Limits to Growth report in 1972. But the proposition that what has become the dominant driver of human activity might have to cease was unthinkable. It still is.

Whether or not eco-limits are an important factor yet, a detached observer might deduce that the slow-down of the Chinese economy means that now would be an appropriate moment to pause economic growth anyway, just in case worries about climate change, habitat destruction, ocean acidification etc. etc. are not rubbish. My eco-philosophy asks “Are all humans supplied with their basic needs?” The prime growthist motivation is “Is there an unexploited opportunity for profit?” I say ‘growthist’ not ‘capitalist’, because most anti-capitalists still think growth is desirable. Social justice and profit are theoretically possible at the same time as long as there is growth. That does not happen in practice, but the possibility obstructs the necessary culture shift.

To be fair there has been much discussion, and some consequent action, on corporate social responsibility, sustainable development, and various ways of reducing environmental impact, but the assumption is that it will all enable economic growth to continue. I could accept this view with one large caveat. It would be wise to have zero growth. or even de-growth, as a planned policy option for the no doubt brief periods when no whizzkid has yet come up with an ingenious, sustainable solution to the latest problem growth beyond limits has thrown up. Until a cleverer answer turns up, a Basic, Citizens’ Income will be essential to underpin the transition, and the necessary new cultural mind set.

Herman Daly has for over 40 years been patiently explaining how a steady state economy could work, and there are two excellent recent books going into some detail: Enough is Enough, by Dan O’Neill and Bob Dietz, and Prosperity without Growth, by Tim Jackson. As I write, I am invited to a Green House event in London:

On 5 November, from 14.00 – 18.30, we are holding a half-day conference in central London on How do we shift from an extractive to a circular economy?

If anyone living closer than Leeds can attend, I would be grateful for any advice they glean. In my experience most authorities offering pathways towards sustainability assume a mind set which will, indeed must emerge eventually, but which is certainly not the dominant paradigm at the moment.

The current growth-based system is prone to discontinuities. Not only is there repeated failure to predict them, but they can be quite sudden. If the Basic income had been a mainstream idea in 2008, a transition to a sustainable economy might have been a natural development. Due to the Tragedy of the Commons, the (not predicted) Chinese economic downturn presents us with some major problems. To recap, the ’Tragedy’ states that as long as expansion is possible, an optimistic, aggressive strategy makes sense, but it still makes sense beyond that point for each separate participant, when over-exploitation threatens the interests of the society as a whole. No player can afford to put themselves at a disadvantage.

We currently have over-production of numerous commodities, notably iron ore and oil. Which producers are to shut off supplies? Not only do they lose the source of revenue, but particularly in the case of iron production, they put themselves at a disadvantage if/when an economic upturn does happen. This particular economic pause is unlikely to be permanent, despite the risk of breaching eco-limits. What should Britain do? The private players are making these decisions anyway. Two British steel works have just closed. How far can the government go to maintain Britain’s competitive capability?

But oil gives a clue to a part of a possible answer. Due to the fall in commodity prices, a number of countries have lost income on which they had come to depend.  Yet  once upon a time the world was populated (sparsely) by tribes who were only where they were because there were sufficient resources for each individual. A prerequisite for a sustainable society is for every individual to have access to basic needs, on condition that they do nothing to damage the environment (including not increasing the population without good reason), and it will help if everyone has an incentive to contribute to the economy in some way. There may be much brighter minds than mine who can think of other ways to meet these requirements, but until they do, I offer the Basic, Citizens’ Income world-wide as a first bid.

It may not be obvious how this connects with immediate examples, for example can the Scottish Nationalists really afford to deny Ineos access to Scottish shale? Does not Scotland need the wealth, and the jobs? Will it be worth Ineos’ while to stay in Scotland if they cannot frack? The Basic Income’s ability to reduce labour costs without hardship to the workforce does not at first sight look like a sufficiently significant factor. Is the Green House grappling with these issues?

The Basic income may be a sine qua non, but not necessarily sufficient on its own. Technological innovation will stave off the otherwise inexorable advance of the ‘Tragedy’ in the short term, but even if as some believe, that may go on happening indefinitely, I think a transition to a culture which accepts at least temporary periods of no growth is advisable. But to get from here, with the present mind set, to the culture we need to adopt, I have a rather more drastic suggestion. We have to play the growthist game, if only with a view to the next, brief, economic upturn, but at the same time making it clear that we regard our own – and everybody else’s policies as insanity. Britain’s policies on oil, iron and a host of other issues (another London Airport?) will assume growth, making it clear that that is the last thing we want. OK, Ineos, pro tem you have our carte blanche. We must protect our competitive position, but at least at the same time we can expedite the culture shift.

Although I think Enough is Enough is Enough  and Prosperity without Growth are excellent as to how we could move towards a zero growth economy, to my mind neither really addresses the forces which compel capitalists to behave as they do in the present milieu. Whether from Green House or elsewhere, I look forward to less extreme responses to the ‘Tragedy’ from anyone who takes its likelihood, and its ramifications,  as seriously as I do.

 

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