Alternatives to Growth-Centric Development Part 3

BOX 10: NEW MEXICO’S ACEQUIA SYSTEMS Acequia is a Spanish term used to describe the communal irrigation systems used for thousands of years in Spain and by indigenous groups in Latin America. These systems have made agriculture possible in arid regions and many are still in use today. Today in New Mexico there are over 700 acequias, each serving between 3 to 300 families.63 These irrigation systems divert surface water from rivers through ditches to family farmlands. The structures and water use are governed by locally elected unpaid commissioners and caretakers, with community members coming together each year to maintain and clean out the ditches. (Figure 18) The number of people each land owner must provide to do the cleanup is dependent on the size of their land and amount of water they use. With competing water demands combined with land redevelopment, many acequias are now considered to be at risk. New landowners in the region do not always want to provide labor to help with clean up, and some of the tradition and cultural aspects of the acequias are being lost.64 The New Mexico Acequia Association aims to address these issues, helping acequia members to navigate change and maintain their water systems. The support of a larger association allows groups to maintain local control of their resources in an environment that favors private ownership structures. 6. CONCLUSION: PROMOTING ALTERNATIVES Many of the examples given above focus on the local scale, emphasizing the use of local resources instead of integration into a global growth-oriented economy. This can take the form of designing new indicators specific to a state or region, adopting programs promoting local management and ownership of businesses, homes, and resources, purchasing local goods, and using local time banks or barter markets to meet consumption needs. 63 64 NSAC, 2016. Chacón, 2018. Another common theme of many of the examples used above is that they are efforts undertaken by groups that the formal growth focused economy has left behind: immigrants, native and indigenous groups, women, and minority racial and ethnic groups. These groups who have been ignored or harmed by the global growth focused economy have organized and created their own local institutions that allow them to thrive. Learning from these groups and including them in the design and adoption of alternative policies and programs is also crucial. Though many successful smaller examples exist, implementing a shift away from a growth focused economy on a larger scale would be a major challenge requiring systematic change. While support for degrowth, green growth and other alternatives has grown in recent decades, it has not yet penetrated mainstream economics and politics. In order for a true shift to occur, many changes would be needed in existing institutions and political systems. One proposal for large-scale modification of existing growth patterns is the Green New Deal, which has been advocated both in the United States and globally. This plan for taking on climate change by reducing fossil fuel use, curbing emissions, and creating high paying jobs in clean energy, does not explicitly challenge a growth focus, but it implies a major shift in investment and employment away from fossil-fuel and energy-intensive forms of growth (see Box 11). BOX 11: THE GREEN NEW DEAL The concept of a “green new deal” has recently achieved some political traction, but its exact content and policy feasibility is subject to considerable uncertainty. Aspects of what is referred to as a “green new deal” have been discussed by ecological economists for some time. In this discussion, there remains a tension between concepts of “green growth” and limits to growth or degrowth. Major stated goals of a green new deal include: This approach delinks traditional economic growth, largely based on fossil energy and resource input-intensive techniques, from employment creation and expanding well-being. In part this is a technological issue of employing “green”, renewable, and resilient technological options, and in part it represents a shift in consumption from energy-intensive to energy-conserving and serviceoriented forms of consumption. Changing existing infrastructure and institutions Moving away from a growth-centric economy is also reliant on having systems in place that allow people to live lifestyles where high income levels are not needed to get by, and where there are affordable green alternatives available to everyone. This includes having access to public transportation, affordable housing, and sustainably grown food, and having systems for communities to control their own resources. The suburban living that is part of the America dream (and has been promoted as the dream to work towards around the world) often involves a large house that is expensive to heat and cool, a large gas powered vehicle to get around and a housing layout that provides distance from neighbors and does not foster a sense of community. Food, water and electricity are brought in from elsewhere without much thought as to where it comes from. A greater emphasis on community self-reliance and sustainability, local food systems, public transit, and efficient affordable housing, can offer an alternative vision. Population Growth and Stabilization A growing economy is often associated with a growing population, and as emphasized by advocates of a steady-state economy, population must eventually stabilize given finite resources. A stabilizing population poses both economic challenges and opportunities. Typically, a stabilizing population will have a higher proportion of older persons, and a relatively smaller labor force of younger workers. This can put strain on such systems as Social Security and Medicare, which see higher expenditures with a lower labor force to provide tax revenues. On the other hand, a larger older population tends to create a large number of service-oriented jobs in health and elder care. This provides employment opportunities in sectors that generally have lower environmental impact than goods manufacturing, making for an overall “greener” economy. Education, Expectations, and Behavior Many aspects of current education and culture encourage greater goods consumption. Advertising is a powerful tool, often promoting the idea that you can live a better life if you purchase certain products and emulate the extravagant life styles of those presented in the media. Traditional economics education tends to equate higher consumption with greater well-being. A reorientation to a less environmentally damaging, and perhaps healthier and more satisfying, lifestyle can occur only with a shift in attitudes. If people come to place higher value on community and on nonconsumptive forms of life satisfaction such as cultural activities or appreciation of nature, they will be less likely to pursue satisfaction through higher goods consumption. The kinds of consumption also matter; for example, a heavily meat-centered diet has much higher environmental costs and probably also adverse health consequences. Legal and Financial Systems The kinds of alternative economic institutions described in the examples given above can be fostered by certain specific policies, including: legal and financial systems that encourage and facilitate the development of cooperatives rather than large for-profit corporations; policies that provide more choice of work hours; regulation of misleading advertising and harmful products; availability of credit or tax advantages for small farmers and businesses; taxes on environmentally harmful production methods and/or subsidies for socially and environmentally beneficial industries. Policies that provide support to low-income families for education and health care can promote both equity and the development of work and life skills, often providing economic benefits well in excess of their costs. Political Implications Perhaps the main barrier to moving forward with alternatives to growth-centric development is political feasibility. In much political discourse, “economic growth” is considered the most important of goals. GDP growth is often seen as a proxy for well-being. Additionally, those who benefit most from the growth-focused agenda can afford to make large campaign contributions to help support policies that will keep them in their positions of wealth and power. In order to gain political support for alternatives to growth-centric models, the concept first needs to be accepted into mainstream thought. But this may not be impossible. When most people say “we need economic growth”, what they really mean is “we need stable and well-paid employment” or “we need revenues to support education and health care”. If these desirable goals can be pursued in their own right, rather than through the pursuit of perpetual growth, people may find that lower-impact lifestyles are actually more satisfying. In communities that have suffered economic decline, and in much of the developing world, there is clearly a need for some form of growth, but this could be oriented to the development of “greener”, more sustainable industries such as renewable power, or in services such as health care and education. The many examples presented in this module indicate that alternative approaches can be effective, can promote stable and satisfying employment, and can gain popular support. The urgency of the climate crisis and other environmental impacts of excessive consumption, such as plastics pollution and pollution and depletion of water supplies, suggest that policies to promote alternative economic development approaches may be both necessary and potentially successful, both in the global North and South. KEY TERMS AND CONCEPTS Adjusted Net Saving (ANS): a national accounting measure developed by the World Bank which aims to measure how much a country is actually saving for its future. Agricultural Cooperative: farmer owned enterprises that allow the owners to pool their resources to produce and/or sell their products Agroecology: an integrated approach that simultaneously applies ecological and social concepts and principles to the design and management of food and agricultural systems. It seeks to optimize the interactions between plants, animals, humans and the environment while taking into consideration the social aspects that need to be addressed for a sustainable and fair food system. Austerity Measures: policies that aim to reduce government budget deficits through spending cuts, tax increases, or a combination of both. Behavioral Economics: Study of the effects of psychological, cognitive, emotional, cultural and social factors on the economic decisions of individuals and institutions and how those decisions vary from those implied by classical theory. Better Life Index (BLI): an index developed by the Organization for Economic Cooperation and Development to measure national welfare using 11 well-being dimensions. Biocapacity: the capacity of a natural environment to provide resources and assimilate wastes. Bretton Woods Convention: the gathering of 730 delegates from all 44 Allied nations at the Mount Washington Hotel, situated in Bretton Woods, New Hampshire, United States, to regulate the international monetary and financial order after the conclusion of World War II. Also known as the United Nations Monetary and Financial Conference. Buddhist Economics: a spiritual and philosophical approach to the study of economics that examines the psychology of the human mind and the emotions that direct economic activity, in particular concepts such as anxiety, aspirations and self-actualization principles. Capabilities Approach: An approach defined by its choice of focus upon the moral significance of individuals’ capability of achieving the kind of lives they have reason to value, defined by Indian economist and philosopher Amartya Sen. Carrying Capacity: the maximum population size of a species that the environment can sustain indefinitely, given the food, habitat, water, and other necessities available in the environment. Classical Economics: a school of thought that flourished, primarily in Britain, in the late 18th and early-to-mid 19th century with the primary theory that market economies are largely selfregulating systems, governed by natural laws of production and exchange. Common Pool Resources: resources that are not subject to private ownership and are available to all, such as public parks or the oceans. Community Land Trust: nonprofit, community-based organizations designed to ensure community stewardship of land. Community land trusts can be used for many types of development (including commercial and retail), but are primarily used to ensure long-term housing affordability Conditional Cash Transfer Programs: Programs that aim to reduce poverty by making welfare programs conditional upon the receivers' actions. The government only transfers the money to persons who meet certain criteria. Consumerism: a social and economic order that encourages the acquisition of goods and services in ever-increasing amounts Consumption: the use of goods and services by households. Cooperative Ownership: a model of ownership where an organization is owned and controlled by the people who use the products or services the business produces. Decoupling: breaking the correlation between increased economic activity and similar increases in envrionmental impacts. Degrowth: an equitable downscaling of production and consumption that increases human wellbeing and enhances ecological conditions at the local and global level, in the short and long term. Dependency Theory: the notion that resources flow from a "periphery" of poor and underdeveloped states to a "core" of wealthy states, enriching the latter at the expense of the former Ecological Economics: an economic perspective that views the economic system as a subset of the broader ecosystem and subject to biophysical laws. Ecological footprint (EF): a methodology that seeks to convert all human impacts into equivalent units of biologically productive land area. Ecological thresholds: limits beyond which ecosystems can suffer severe damage or collapse. Eco-efficiency: production of goods and services with less use of resources, waste, and pollution. Eco-Swaraj: is a grassroots framework developed in India that respects the limits of the earth and the rights of other species, while pursuing the core values of social justice and equity Environmental Justice: the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies. Environmental Racism: environmental injustice that occurs in practice and in policy within a racialized context. Excludable / Non-Excludable: a good or service is called excludable if it is possible to prevent people (consumers) who have not paid for it from having access to it. By comparison, a good or service is non-excludable if non-paying consumers cannot be prevented from accessing it Exported Pollution: Wastes and emissions that are either directly exported to another country, or are indirectly exported, as countries reduce their own pollution by purchasing products that are environmentally harmful to produce from other countries. Feminist Economics: the critical study of economics and economies, with a focus on genderaware and inclusive economic inquiry and policy analysis Food Sovereignty: is the right of peoples to healthy and culturally appropriate food produced through ecologically sound and sustainable methods, and their right to define their own food and agriculture systems Genuine Progress Indicator (GPI): a national accounting measure that includes the monetary value of goods and services that contribute to well-being and deducts impacts that detract from well-being. Gini Coefficient: a statistical measure of distribution used as a gauge of economic inequality, measuring income distribution among a population. Global North: Nations that are economically developed such as the USA, the UK, Canada, Western European nations and developed parts of Asia Global South: countries located in Asia, Africa, Latin America and the Caribbean and considered to have low and middle income compared to the Global North. Green Economy: An economy that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. Green GDP: An index of economic growth with the environmental consequences of that growth (including biodiversity loss and costs of climate change) factored into a country's conventional GDP Green Growth: A path of economic growth that uses natural resources in a sustainable manner. Green New Deal: a Congressional resolution in the United States that lays out a plan for taking on climate change by reducing fossil fuel use, curbing emissions, and creating high paying jobs in clean energy. Similar proposals have also been advanced on a global level. Gross National Happiness (GNH): An indicator system developed by the government of Bhutan that is based on the four pillars of good governance, sustainable socioeconomic development, preservation and promotion of culture, and environmental conservation. Gross State Product (GSP): a measurement of a state's output that is the sum of value added from all industries in the state Green Consumerism: a form of consumption that is compatible with the safeguard of the environment for the present and for the next generations Gross domestic product (GDP): the total market value of all final goods and services produced within a national border in one year. Guaranteed Income: a government guarantee that each citizen receives a minimum income. Happy Planet Index (HPI): A measure of a nation’s well-being that combines four elements (well-being, life expectancy, inequality, and environmental footprint) to show how efficiently residents of different countries are using environmental resources to lead long, happy lives. Human Capabilities Approach: An approach developed by Martha Nussbaum centered around the notion of individual human dignity with a goal of producing capabilities for each and every person, with capabilities below belong to individual persons, rather than to groups. Income Ceiling: a legal limit on how much income an individual can earn, also called a wage ceiling Informal Economy (or Informal Sector): the part of an economy that is neither taxed nor monitored by any form of government. Unlike the formal economy, these activities are not included in a country's GDP. International Monetary Fund (IMF): An international organization headquartered in Washington, D.C., consisting of 189 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. Living Wage: The minimum income necessary for a worker to meet their basic needs for food, housing, and other essentials such as clothing. Neoclassical Economics: a broad theory that focuses on supply and demand as the driving forces behind the production, pricing, and consumption of goods and services that emerged around 1900 and replaced the earlier theories of classical economics as mainstream. Neoliberalism: A policy model including economic liberalization policies such as privatization, austerity, deregulation, free trade, and reductions in government spending in order to increase the role of the private sector in the economy and society. Paris Agreement: an agreement within the United Nations Framework Convention on Climate Change (UNFCCC), dealing with greenhouse-gas-emissions mitigation, adaptation, and finance, signed in 2016. Planetary Boundaries: A quantification of the limits of key earth system processes, beyond which humanity risks triggering non-linear, abrupt environmental change. Progressive Tax Structure: a tax in which the average tax rate increases as the taxable amount increases. Radical Economic Democracy (RED): An evolving framework of governance in which each person and community has access to decision-making forums of relevance to them, and in which the decisions taken are infused with ecological and cultural sensitivity, and socio-economic equity. Reciprocity: A social norm that involves in-kind exchanges between people—responding to another's action with another equivalent action. Repair Café: A meeting organized by and for local residents in which people repair, and learn to repair, household electrical and mechanical devices, computers, bicycles, or clothing with the objectives of reducing waste, maintaining repair skills and strengthening social cohesion. Reparations: A form of compensatory payment for groups that have been wronged Right-sizing: A mix of economic growth in the Global South, degrowth in the Global North, and redistribution of wealth to achieve a desirable outcome Rival: A property of good for which consumption by one consumer prevents simultaneous consumption by other consumers, or consumption by one party reduces the ability of another party to consume it. Sharing Economy: An economic model defined as a peer-to-peer based activity of acquiring, providing, or sharing access to goods and services that is often facilitated by a community-based on-line platform Socialism: Various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods Social Safety Net: welfare services provided at the state and local levels with the goal of providing services for, and improving well-being of the recipients. Solidarity Economy: An alternative to capitalism and other authoritarian, state- dominated economic systems in which ordinary people play an active role in shaping all of the dimensions of human life: economic, social, cultural, political, and environmental. Stationary State: A concept from classical economist John Stuart Mill that after a period of growth, the economy would reach a stationary state, characterized by constant population and stocks of capital Steady State economy: an economy that maintains a constant level of manufactured and natural capital by limiting resource-using economic activity. Substitutes: Two or more consumer goods or services that could be used in place of each other. Sumak Kawsay: The Quechua concept of living in harmony with your community, yourself, and your environment with a focus on preserving resources and culture for future generations. Utility: An economic term referring to the satisfaction received from consuming a good or service Throughput: The combined flows of resource inputs and waste outputs associated with the economic production system. Time Banking: A reciprocity-based work trading system in which hours are the currency that enables a person with one skill set to trade hours of work with someone with another skill set, without any money changing hands. Tragedy of the Commons: the tendency for common property resources to be over-exploited because no one has an incentive to conserve the resource while individual financial incentives promote expanded exploitation. Uneconomic growth: growth that unsustainable and harmful to overall wellbeing. Universal Basic Income: A guarantee of a certain amount of money provided to every citizen within a governed population on a regular basis without the requirement of passing a test or fulfilling a work requirement. World Bank Group: An international financial institution that provides loans and grants to the governments of poorer countries for the purpose of pursuing capital projects