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DO economies have to grow? Or, to put the point another way, what do they have to grow for? As rich countries suffer their worst failure of economic growth since the Second World War, those questions have resurfaced with a new urgency. The sense that our prevailing economic model is bankrupt, allied to fears that the world is heading for catastrophic climate change, has stoked demands for a radical rethink of the guiding principles of modern capitalist democracies. Answering that call, an assortment of pundits have been issuing challenges to political and economic orthodoxy, offering alternative visions of what a good society would look like. At the user-friendly end of the field, Zac Goldsmith, an environmental adviser to the British Conservative party, has taken an amiable stroll round the issues in The Constant Economy. At the more rigorous end, a commission convened by France’s former president Nicolas Sarkozy and led by the Nobel prize-winning economist Joseph Stiglitz has examined the limitations of standard gross domestic product data as a lodestone for policy. Between those extremes lies Tim Jackson’s Prosperity Without Growth: Economics for a Finite Planet, a challenge to mainstream economic thinking that is both accessible and robustly argued. Jackson, a professor of sustainable development at the UK’s Surrey university, has thought hard about the subject. His prose is lucid and lively, and many of his policy prescriptions are sensible. Jackson is a member of the British government’s Sustainable Development Commission (SDC), and the book draws on a report for that commission published earlier in the year. (Full disclosure: I also served on the SDC until 2004.) For a work by a government adviser, based on an officially supported research project, his stance is also refreshingly radical. Yet for all these strengths, his argument is flawed. Jackson’s starting point is that, as he puts it, "a return to business as usual is not an option." If economic growth carries on as it has done since the industrial revolution, he writes, "by the end of the century our children and grandchildren will face a hostile climate, depleted resources, the destruction of habitats, the decimation of species, food scarcities, mass migrations and, almost inevitably, war." In his strongest chapter, he takes on what he calls "the myth of decoupling": the idea that the link between economic growth and environmental damage can be broken. Typically, the environmental impact of an economy, relative to its income, falls as it gets richer. But while that "relative decoupling" is well-established, "absolute decoupling" — a decline in greenhouse gas emissions, for example — has been elusive. Jackson’s conclusion is that if economic growth cannot be separated from environmental damage, then — in rich countries at least — it is growth that will have to be abandoned. Instead, he argues, societies can attain a truer prosperity that "consists in our ability to participate in the life of society, in our sense of shared meaning and purpose and in our capacity to dream." Lives of frugality and simplicity, with stronger communities and healthier relationships, will make us more genuinely prosperous than our present obsession with "material pleasures", he argues. This is, in many ways, a beguiling vision, particularly at a time when the pursuit of prosperity in the material sense has proved so harrowing. The problem comes with reality. Jackson’s policy prescriptions — including greater financial prudence and tighter regulation of TV advertising — are all sound, to varying degrees. Yet they take only the smallest of steps towards the post-growth society that he suggests we need. His only idea that could put the brake on growth would be cutting working hours. Here he takes the economist’s famous "lump of labour" fallacy — the idea that there is only a fixed amount of work to do that has to be shared round — and suggests it should be a goal of policy. Yet in anything other than a perfect utopia, the idea that there is no more work that needs doing is ludicrous. There are other problems, too. Jackson has no answer for the question of how a post-growth economy would handle technological innovation, or a refutation of Benjamin Friedman’s argument, in his excellent The Moral Consequences of Economic Growth, that rising standards of material prosperity foster opportunity, tolerance, fairness and democracy. A society that has given up on growth seems unlikely to be the open, friendly community of Jackson’s imagining. His pessimism about decoupling is probably also overdone. There is plenty of analysis, from Lord Stern’s report on the economics of climate change, to show how carbon dioxide emissions can be cut to keep global warming within reasonable limits while the world economy continues to grow. While the goal may be achievable, reaching it will require an enormous effort. By daring to challenge one of the fundamental precepts of orthodox policy-making, Jackson performs a valuable service in reminding us of that. His questions are worth asking, even if his answers are wrong. TITLE: Prosperity Without Growth: Economics for a Finite Planer. Author: Tim Jackson, Publisher: Earthscan, © The Financial Times Limited. 
