Turning Point. An End to the Growth Paradigm

Citation

Simonis, U.E. (2000), "Turning Point. An End to the Growth Paradigm", International Journal of Social Economics, Vol. 27 No. 11, pp. 1132-1141. https://doi.org/10.1108/ijse.2000.27.11.1132.4

This is a very personal and at the same time wide‐ranging book, written by one of neo‐classical economics’s most innovative critics, Robert U. Ayres, who starts with a confession: “Though I am an academic person by temperament and profession, this book is much more informal than the usual academic monograph. I make no apologies for that” (p. xi). And he gives reasons for not doing so: “I have deep misgivings, both about economic growth, as currently defined and measured, and about world trade as an instrument for achieving it” (p. xi).

This turnabout, he starts to discuss in rich detail, has been mostly triggered by the evidence that economic growth was benefiting only the few, and that large part (the major part, he seems to suggest) of statistical growth reflects increasingly frantic activity. In many respects, Ayres says, “it amounts to running faster and faster to stay in the same place – ‘wheel spinning’ rather than true wealth creation” (p. xii). In particular, growth in recent decades is attributable to expenditures resulting from unavoidable transportation, from a growing need for protection against threats to life, health and property, and from “living on capital” (meaning depletion of natural resource stocks and environmental degradation). Also he says, the fraying of the social fabric is hardly disputable; a great part of contemporary political discourse concerns the symptoms of problems, though not necessarily the causes, thereof. The trends (the causes) that matter are urbanization, industrialization, materialization, communication and economic globalization. From these trends disturbing social and environmental impacts arise: alienation, insecurity and environmental deterioration.

Ayres is convinced that these impersonal trends, however, are not the whole cause of impending trouble: he puts some (most?) of the blame on the spread of simplistic economic doctrines, based on oversimplified models that no longer reflect the most important aspects of reality.

The text is a composition of empirical analysis and theoretical reflection. In ten chapters Ayres looks for the “drivers of change”, for trends as causal agents, and asks where this might lead to; to economic crisis, to social and environmental crisis, or to sustainability, eco‐restructuring and improved governance both on the national and at the global level? All these chapters offer plenty of empirical details and at the same time are somewhat speculative, indicating that trends might be changed, that “turning points” are possible – not only in a personal but also in a social and political sense. By summarizing the arguments and specifying the implications at the end of each of these chapters, Ayres helps his readers to follow even highly complex ranges of ideas.

The text culminates in the two concluding chapters on the economic growth paradigm and the free trade paradigm. It is here where Ayres deploys his full capacity as a vivid writer and fundamental critic. Economic growth today is benefiting only a small proportion of the population and continues to impinge on the social fabric and the natural environment. The theory underlying the old growth paradigm, he says, is faulty: “It no longer makes sense to seek increased productivity by investing capital in labor‐saving technology ... What must be done instead – call it the new paradigm – is to increase the value of the outputs and reduce the physical resource – material and energy – inputs” (p. 203).

Regarding the free trade paradigm, Ayres also finds strong words. The benefits of free trade are appropriated by a few; across the globe environmental limits are being reached and breached. Thus, he concludes “… the supposed benefits [of free trade] are largely illusory…; international trade between grossly unequal partners is only benign in the sense that a tumor may be benign; that is, it doesn’t do much harm as long as it is relatively small in scale… When the scale of global trade grows too fast, the side effects are likely to prove very unpleasant” (p. 224).

Well, not every reader will agree or need agree. And some, or even many will doubt that a turning point has come. Still, Robert U. Ayres’ new book offers, as others have, compelling and vigorous arguments that make provocative reading and helps clarify positions, trends and possible futures.