John Donvan

Hey, everybody, this is Open to Debate. I’m John Donvan, and you may have heard it said that an imperative in the life of a shark is that it has to keep moving or else it will die. Now, is that really true? Yeah, actually it is. I looked it up. Not every species of shark, but for some of them, like the great white, it is move or die. That is the rule, that is its fate.

Okay, we are not debating sharks this time, maybe some day, but we are debating a similar dynamic, and that is economic growth. It’s been something of a truism that the proper dynamic of an economy is always to grow. You want your GDP, you gross domestic product, ever-expanding, more and more and more. Growth is good. A year without growth, that’s a setback, that’s a recession. Depressing word. And a really serious setback, that’s literally called a depression.

But what about this assumption that growth is an economic imperative? Well, it has been challenged before many times over the decades, and it is being challenged again more recently by what is called the degrowth movement. It’s an argument that prioritizing economic growth has all sorts of downsides, and is an imperative that we should let go of. But degrowthers, uh, they get all sorts of push-back from critics who continue to see growth as generally so full of benefit for so many people, that not pursuing growth and not pursuing policies that promote growth just seems outlandish.

So which is it? Well, that’s what we’re here to debate. Here’s the question we’re taking on. Does economic growth cost too much? So let’s get in to it and meet our debaters. Arguing that the answer to that question is yes, he’s an environmental studies professor emeritus and senior scholar at York University, also author of Escape from Overshoot: Economics for a Planet in Peril, Peter Victor. Peter thanks so much for joining us at Open to Debate.

Peter Victor

Thanks for having me. Looking forward to it.

John Donvan

Thank you. And arguing that the answer to that question, does economic growth cost too much, is a clear no, she’s editor-in-chief at Reason Magazine, also a former debater with us, Katherine Mangu-Ward. Katherine, welcome back to Open to Debate. It’s great to have you back again.

Katherine Mangu-Ward

It is a delight to be back.

John Donvan

Uh, before we get started, I just wanna get a sense from each of you about why, why you care about this enough to actually take part in a debate about it. So, Peter, just, just for you, what are the stakes that you see personally in taking on this argument, which is one that you’ve been taking on for quite a time?

Peter Victor

Well, that’s true. I’ve been studying economics for a very long time. When I began, I was enthralled by the market system, like a lot of economists are, but I quickly realized all was not right, all was not as advertised in the text books. Lots of things wrong with it. And then later, uh, in my career, um, I began to understand that the best way to think about the economy is it’s embedded in the biosphere. It’s not a separate economy versus environment.

The economy sits inside the en- environment, and is dependent upon it for its resources and to deal with its wastes. That’s putting it very simply. Uh, but we’ve now reached a point where these demands on the environment by the, the growing economy are very excessive and, and that hardly needs much illustration now, uh, but I can do that later.

John Donvan

Sure.

Peter Victor

Uh, and that’s, that’s what motivates me. We’ve got a very serious problem on our hands, and economic growth isn’t the answer.

John Donvan

So it sounds like, for you, there is a sense of urgency in taking on this debate right now.

Peter Victor

There has been for a long time a sense of urgency, absolutely.

John Donvan

Katherine, we have the same question for you. I’ll, I’ll put it this way, wh- why did you accept our invitation to take on this particular debate? And why this topic?

Katherine Mangu-Ward

You know, I, uh… The motto of Reason Magazine, of which I am editor, is free minds and free markets. I’m really excited about both of those things, and I think economic growth facilitates, uh, both of those things. Basically, I would just say, like, I think people are really cool and really capable of doing cool stuff, and I think that being in a growing economy facilitates that, enables that. Um, I don’t know what the future is going to look like, but I want to be sure that we have the resources to do whatever it is that we can dream up.

John Donvan

Okay, so now we know why you both care about this topic, and let’s get to the actual arguments. We’re gonna start in our first round with formal opening statements. Each of you gets a few minutes to explain your position. Peter, again, you’re up first. Your answer to the question, does economic growth cost too much? Is it clear? Yes, it does. Please tell us why.

Peter Victor

Most people think that the faster the economy grows the better. That’s certainly the impression you get from the media and from most politicians and business leaders, but it’s not as simple as that. Economic growth can also increase when then get worse. This happens when money is spent on fighting forest fires, cleaning up oil spills and toxic waste, combating crime, rebuilding after extreme weather events, and dealing with climate change and other environmental problems that have increased with economic growth.

All this spending goes into a country’s gross domestic product, or GDP. Why does this matter? It matters, because these costs of economic growth are included in the very statistic that is used to measure and report on economic growth. To make matters worse, GDP omits the cost of environmental damage and ill health from air and water pollution, the depletion in natural resources, and losses of flora and fauna from habitat destruction and over-harvesting. All of which have increased to unprecedented and dangerous levels.

Also consider that for the past several decades, economic growth in many countries, including the USA, has been accompanied by increasing inequality, more precarious employment, greater indebtedness, and rising mental illness. None of these costs are captured by GDP. These are some of the reasons why American economist, Simon Kuznets, one of the originators of GDP said, and I quote, “The welfare of a nation can scarcely be inferred from a measurement of national income. Goals for more growth should specify of what and for what.”

One way of avoiding the misunderstanding of economic growth as necessarily good, is to turn to measures such as the genuine progress indicator. The genuine progress indicator corrects many of the deficiencies of GDP as a measure of wellbeing, by including benefits not counted in GDP, and excluding costs that are. Here’s what a comparison of GDP and the genuine progress indicator, in the 17 countries that have measured both over many years, tells us about the cost of economic growth.

Globally, gross domestic product tripled between 1950 and 2003, while economic wellbeing, as estimated by the genuine progress indicator, declined after 1978. This turning point happened around the same time that the ecological footprint of humans, the demands we make on the earth’s natural systems to support us, surpassed the capacity of these systems to regenerate. Now it’s reached the point where, if everyone on Earth consumed at the level of the average American or Canadian, it would take the biocapacity of at least five planets to support us all sustainably.

We’ve entered the era of overshoot. Economic growth, especially in rich countries, will only make things worse by increasing the use of materials and energy, generating more waste of all kinds, transforming landscapes, and destroying the habitat of other species. And it’s not as though all this economic growth makes us feel better. In the USA, GDP per person trended upwards from 1950, tripling by 2010. Meanwhile, the genuine progress indicator per person peaked in 1980.

Life satisfaction in the USA peaked a little sooner, as did the proportion of Americans who described themselves as very happy. A similar story can be told about many other countries. This gap between GDP per person, which is our standard measure of growth, and declining or stagnant measures of wellbeing, such as the genuine progress indicator, life satisfaction, and self-reported happiness, means the only reasonable conclusion is that economic growth, at least in rich countries, cost too much.

John Donvan

Thank you, Peter, very much. Um, Katherine, it is now your turn. You’re… Again, I just want to remind people the question is, does economic growth cost too much? You are saying no. Here’s your turn to explain why.

Katherine Mangu-Ward

Thank you. Uh, and thank you, Peter, for your remarks. Um, my case, simply put, is that the last two centuries of economic growth have been the best thing to happen to humanity, and that it’s not only hubristic but short-sighted and maybe a scosh elitist, even, to think that we are gonna do better, uh, to try and move beyond this astonishing chapter in humanity’s story. Um, we all know the figures, but I do think it’s worse- worth rehearsing them again, because we take them for granted.

Two hundred years ago, the global rate of absolute poverty was 84%, today it’s nine. Life expectancy increased from 30 years to 72 in that period. The numbers are a similarly impressive for access to water, food, shelter, education, and uh, more intangible things such as, uh, women’s rights, equal rights for, um, for people in other demographics around the world and, uh, and, uh, democracy. The world’s population has increased eight- eightfold since 1800, but standards of living have never been higher, and that is simply the thing that should be at the center of this conversation.

Um, those gains are not evenly distributed, but I don’t see that as an indictment of economic growth. I see it as a case for more. It’s very easy to say that everyone should skip dessert when you’re stuffed with steak and potatoes, but there are a lot of people who are still hungry, both literally and, uh, metaphorically, if you will allow it. Um, it’s madness to think that, uh, some kind of centralized effort to slow or stop the kind of economic growth that we have relied on for the last 200 years will not fall heavier on those how have not yet eaten.

Moreover, economic growth has paid- played a pivotal role in promoting individual rights and personal freedoms. As economies expand, societies become more inclusive, they become more pluralistic, prosperity empowers middle classes and, uh, higher income levels are linked to stronger democratic institutions. Of course we have problems, of course we do, but, uh, the question of whether or not something costs too much is the question of whether the benefits outweigh the costs. Uh, I think that, as Peter suggests, it’s perfectly fine to move beyond our obsession with GDP. It is an imperfect measure, but GDP correlates with things that matter immensely. I also think that it’s worth keeping in mind… I don’t think it’s an overstatement to say that in some sense, concern about environmental factors, especially climate change, is a luxury good.

Um, you know, maybe it shouldn’t be that way. Maybe we would like to live in a world where, uh, people put those questions first, but the reality is that rich countries have the capacity to care about something more than survival. They have something… uh, the capacity to care, uh, about things like reducing carbon emissions, and they typically are fairly successful at it. The United States’ carbon emissions per unit of GDP had decreased by 65% since 1970. The same is true, uh, in India and other places as well, on a slightly later timeline.

The fact is that the opposite if the resolution is true. It is the suppression of economic growth, in the service of other goals, that will, in the end, cost too much for too many people.

John Donvan

Thank you very much, Katherine. So now we know where each of you stand. We’re gonna take a break, and when we come back we will talk about the differences. We’ll be right back. This is Open to Debate. I’m John Donvan.

I have a favor to ask each of you. We’re curious where you stand on the debate that we have coming up. Do we have free will? That’s the motion. Do we have free will? If you have thoughts and reactions to this idea, free will, we’d like to hear them. Send us an email or a voice memo to freewill@opentodebate.org. That’s freewill@opentodebate.org.

Welcome back to Open to Debate. We are taking on this question, does economic growth cost too much? We have now heard opening statements from Peter Victor and Katherine Mangu-Ward, and we see the dividing lines in this conversation. Peter making the argument that endless growth is just something that has been oversold. That the numbers that are summed up in GDP, the gross domestic product, do not count all of the bad stuff. All of the bad stuff that, even though it becomes a net positive in the GDP, it’s actually not anything that we wanna, you know, write home about. Putting out forest fires, taking care of, um, prisons. Sit- situations like that, that don’t actually suggest th-… a contribution to the net economic wellbeing of individuals. He also talks about how the demand on Earth, made by sustained growth, is just a losing game. And overall he says, even though growth has been consistent for a very, very long time, we are not feeling better.

Katherine Mangu-Ward says the opposite, that any sort of effort to suppress growth would have completely negative consequences. She is a champion of the pattern of growth over the last two centuries, which she says have led to better outcomes for humanity than we’ve ever seen in history. She correlates this growth with things like increases in life expectancy, positive demographics, uh, positive goods like women’s rights, and standards of living going up globally, uh, to a level that they’ve never reached before.

So we kind of see the two dividing lines here, but I’d like to get a little bit into the details. And, Peter, if you could talk about what you’re thinking when you say, “Let’s do something about growth.” What would those somethings… some of those somethings be?

Peter Victor

Main point I wanted to make was that our way of measuring growth is not informing us well. It doesn’t inform us about wellbeing, uh, and so, my perspective is that we should be directing our efforts towards the things that contribute directly to wellbeing. Better education, better health, and not measure that against what does it do for GDP. Uh, one of the things that you often find in, in political debates, and I was a civil servant for some time in my career, is that when an, an idea came forward to improve something, whether it’s environmental or social, uh, the question will come up, well, yes, but what would that do for growth? What would that do to growth? Either way.

And that is the wrong question to ask. The question is, what will it do for people’s wellbeing, and for the wellbeing of the environment? And if I must… may just say, Katherine made some points about what’s happened in the past, and, uh, I wouldn’t disagree with a lot of what she said, but we’re talking about the future. We’ve reached a point in history where we cannot continue along that path without doing much more serious damage to the planet, and that will, (laughs) that will ruin growth as much as anything else.

John Donvan

Okay, but I’m just looking for an example of what might change. What would be, you know, one, um, concrete speculative, it has to be at this point, example of something that might be done differently so that we can understand what we’re talking about?

Peter Victor

Let’s talk about technology, because it always enters into this kind of discussion. Um, what we need to do is, of course, to continue with the development of technology, but that development should be in a very different direction. It should be one that conserves the planet, and doesn’t exploit the planet. And how do we do that? Well, there are various ways. One is, if we put limits on the extent to which we allow ourselves as humans to extract resources from the environment, uh, that would increase the price of those resources. That will stimulate the kind of development of technology that we all want.

And the technological optimist should have no problem with that, because they believe that technology can get us out of the mess that we’re in. But unless we give incentives through the market, achieved by appropriate regulation on limits, and that can include limits on, um, greenhouse gas emissions, uh, on the introduction of novel entities into the environment, uh, if we don’t do that, we’re just gonna sail along and the situation’s just j-… gonna continue to deteriorate.

Katherine Mangu-Ward

Uh, you know, I’m delighted to hear that Peter and I fundamentally agree on, um, what we should value, and the fact that GDP doesn’t always capture those things, but I think the really sticky spot here is, um, if we, if we do think limits on growth are appropriate, who decides which limits? How do we impose those? And I know that Peter’s whole career is attempting to answer that question, but, with respect, I still find those answers wildly unsatisfactory. Uh, in general, when we attempt to centrally plan economies, horrific unintended consequences result. Suffering, stagnation, et cetera.

John Donvan

Uh, so, so you’re, you know, depicting Peter as being an advocate for central planning, and I’m not sure that I’ve heard him embrace either of those.

Peter Victor

No, absolutely not. I think it’s unfair to be accused of, of taking a position which I never mentioned and I’ve never, uh, promoted in any of the academic work that I’ve done. I’m not in favor of gen-… central planning as the answer to the problem. I’m as, as interested in participatory planning form gr-… the grassroots up as a way of solving these problems. Um, but we first of all have to recognize there is a fundamental problem facing humanity at the moment.

We’ve overstressed the planet. It cannot continue to support eight billion plus people, all trying to consume at the level of Canadians or Americans, or, uh, or Western Europeans. And so, to go on about the benefits from growth and how it would be unfair to poorer people, to me, misses the point completely. We have got ourselves into a situation where we need to join forces, share the best ideas for how do we bring humanity back within the, the, uh, level of which the planet can support us. And that’s going to require changes in technology, change in organization, and it’s certainly going to require a movement away from th-… uh, thinking that the best life you can lead is the one where you’re consuming the most.

Katherine Mangu-Ward

I suppose I would, uh, come back and say, uh, I think that might be a bit of a straw man as well. There are very few people who would say the best life you can lead is the one with maximum consumption. I think one of the, one of the places that I would, uh, [inaudible

] sort of wanna look more closely is, how are markets at allocating these resources?

And, you know, this is, this is not a new question. (laughs) This is not a novel question, but, for example, uh, when we talk about scarcity, you know, a metal, a resource, a, you know, a key ingredient in a technology, uh, when it becomes scarce, the price rises. I think the, the notion that even democratic consensus, or grassroots, uh, consensus, will get to the right answer about how much of a rare-earth metal we should use, um, is, uh, you know, there- there’s not a lot of historical precedent that we get that right.

John Donvan

But, Katherine, your argument is you would want the market… free market to settle that question?

Katherine Mangu-Ward

Right, and that is why I am happy to [inaudible

] in opposition to the resolution, right, because growth in GDP… Because growth and… in both the reach and size of markets, to me, um, does seem to correlate with solving those problems, not, uh, not only creating them.

John Donvan

S-… One could listen to you and, and think you’re saying, kind of, growth at all costs?

Katherine Mangu-Ward

I certainly do not think, uh, uh, growth is an unambiguous good, but I do think that, um, you know… I am very, very hesitant to suggest that, uh, the political solutions, if you would like, um, I don’t need to say central planning, but the political solutions to problems generated by economies, um, I, I don’t think have an excellent record. And, um, that, in fact, markets are good at managing trade-offs. You know, th- they create problems, they solve problems. And maybe you say this is a treadmill we, you know, we don’t wanna be on, but it is the treadmill we’re on.

Peter Victor

I think Katherine, uh, thinks that the information that prices contain is a lot better, a lot more reliable, mo- more useful, than I do. Those are the same prices that we use in GDP, by the way, to value consumption and all the other components. Um, the problem is that prices are becoming less and less reliable of sources of information. They tell you nothing about the environmental damage that the product does, because that’s not included in the price.

They exaggerate the value of the product to rich people, because rich people have more money to spend. Um, poorer people, if you don’t have any money at all, you don’t even get to contribute to what the determination of the price. And, and, and, uh, uh, so, uh, to think that we can solve it through the free market… And by the way, that’s a phrase which I resist. There’s nothing exactly free about the market. You go to into s-… in a store, uh, you have controls of, of various kinds by government, by industry. You have patent law. All sorts of things which limit, uh, competition. Uh, so, to, to dress it up as the free market, I think could be an overstatement.

The way f- forward for dealing with the excessive burden we place on the planet is to hold back on that burden. We do that, we can do that, by limiting the extent to which we convert land to, uh, less valuable uses. Uh, we, we, we dig up resources at an excessive rate. We c-… we put too much waste into the environment. We put limits on that, that will improve the information contained in the market prices that then ensue. I think you should be totally supportive of that, Katherine.

Katherine Mangu-Ward

Again, my question is just, the, the we here, and I, uh, you know, I, I wanna be clear that, um, you know, I think political solutions, uh, in a, you know, in the democratic, uh, mode, are, uh, more desirable than, say, you know, a [inaudible

] style central planning, but they will still create, um… Yeah, I, I don’t think it’s a controversial thing to say that democracies don’t always get it right either. Um, and so I think, when we talk about the highest use of a resource, or, you know, whether land should be, um, used in a certain way, uh, wh-… how much is too much of any given thing? Um, uh, you know, it’s… i-… I think that markets are going to be better tools for answering the question than the democratic process will be.

John Donvan

Katherine, you, you, you made, you made the point in your opening that the, that the, the contemplation of slowing down growth is something of a luxury good. That this is something that, okay, Americans, uh, can start thinking about this ow, because they’ve grown, uh, faster, further than, you know, nations that, uh, would still like to do some of the kind of growing that we’ve done over the last 200 years. Well, why not the United States slow its growth, and let the other ones do, do a little bit more growing? We don’t have to do it globally.

Katherine Mangu-Ward

Right, but I think that, um, you know, for instance, many of the innovations in green tech that come out of the United States, uh, and other rich nations, um, can and will benefit those nations. So I think that this is, you know, this gets to the question of innovation, and, uh, when nations that are already wealthy choose to throttle their economies, you know, might, in fact, be counterproductive. That it-

John Donvan

Mm-hmm.

Katherine Mangu-Ward

… will prevent us from thinking of the thing, funding the thing, developing the thing, um, that could solve our problems.

John Donvan

Peter, also thr- threaded through Katherine’s, uh, perspective on this, is that what you’re talking about is, uh, it just seems impractical. She, she did raise the specter of, uh, central planning. You’re say-… you say that’s not… And, and I, I didn’t think that that was what you are embracing, but I’m not hearing from you how this would work. Who would make the decisions? What the standards would be. Who would set these standards? How they would be enforced.

Peter Victor

Okay, I’ll answer that question, but I wanted to clarify one thing. I’m not proposing, uh, a heavy-handed reduction in GDP and GDP growth as the way of solving these problems. What I am saying is, let’s shift that off the table. That’s the wrong focus for analyzing the success or otherwise of policy. Uh, in terms of what would… uh, who would set these limits, I d-… (laughs) Th- there are so many examples where limits are set. The, the world, at the moment, is grappling with how to set limits on greenhouse gas emissions, uh, and I think that’s a worthy, uh, objective. I don’t know that Katherine would oppose that.

Um, I would also say that we want to use, uh, or there’s a good reason to use, uh, the pricing mechanism by declaring a price that would bring emissions down to the required level. For Katherine to say that, uh, tons per… uh, of CO2 per dollar of GDP was declining, and, and somehow thinking that’s the answer, it’s total tons that have to be brought down. And we’ve seen tons per unit of GDP go down, and total t- tons discharged go up. We have to limit the total that’s going out into the atmosphere.

Now, who’s going to do this? We do this all the time through government. We have a green belt around Toronto, uh, preventing conversion of that land away from agriculture to housing. Um, we have, uh, uh, limits on the pollutants that you can put in the atmosphere. That’s common practice in democracies. And setting those limits is not easy, but that’s where science comes in. Considerations of what will… it will take to re-… to protect people’s health. Taking account of what it will cost. Th- that’s all normal policymaking. This is not magic, and it’s not central planning.

Central planning is where you determine, in advance, how much bread’s gonna be produced. How much each person’s gonna get. How big each house is gonna be. That’s not in play here, and it’s not what the degrowth movement proposes. It’s not what the steady-state has proposed. What they focus on, and this is critical, not GDP, but the material size, the physical size of the economy. It’s overgrown globally, and s-… and, and more so in some countries than others. Uh, what the, what the planet can support. We have to face up to that.

And my one final point, if I may, is, uh, the economic growth rate of the U.S., and all the OEC countries, are on a downward trend, and have been for the last 50 years. And even if this debate changed nothing, you will… can expect to see the rate of growth in the U.S. continue to decline.

John Donvan

But is that then, therefore, an outcome that you want?

Peter Victor

The outcome I want is a reduction in the use of the planet to support humans, because we’ve, we-… Do you know that, that if you l-… [inaudible

] all the mammals on planet Earth, and you say, okay, 33% are human, is human. Um, all but 4% are animals that exist because we eat them. Or we get materials from them. Only 4% of the mammals on the planet are wild. Now, doesn’t that shock you? We must pull back.

Katherine Mangu-Ward

One thing that I’m struck by in Peter’s remarks is that, over and over, he kind of, um, holds as a hard limit, um, what the Earth can support. Or, um, wha- wha- what the, what the Earth has capacity to support. And, uh, I guess I would reject that that is a hard limit. I think that there, you know, there really are… we do really have a long record of figuring out ways to do more with less, and I think that countries that have large amounts of economic freedom, that allow markets to flourish, and that see increased GDP, are the places, um, where, where those innovations get made.

And, in the green revolution, uh, is, uh, is, of course, the, you know, classic example in which, um, we spent many, many decades worried that all of humanity was gonna starve to death. And then we figured out how to feed them. Um, that was… That looked like that was gonna be the problem that was gonna kill us all. Um, we have a new problem that looks like it’s gonna kill us all, maybe several, um, but sometimes we solve those, and, uh-

John Donvan

Mm-hmm.

Katherine Mangu-Ward

… it’s easier to solve them when we’re wealthy.

John Donvan

So, yeah, Peter, I wanna take the, the… that point from, again, from Katherine’s opening, that the system that promotes growth, that supports capitalism, also has within it the seeds to solve the problem through technological progress. And I think you might have conceded there’s something to that, but I just wanted to dro- drill down a little bit further.

Peter Victor

I just find it ironic. If that was true, why are we even having this discussion? Why haven’t these problems been solved? Why have they become more serious? Environmental problems used to be just local, mostly local, then regional, now they’re global. Uh, I haven’t seen the solutions produced by this, uh, economic system that, uh, Katherine is describing. We’ve just got worse… f- further and further into, into trouble. Um, there are measures, uh, and I, uh… of i- impact on the bias for the ecological footprint which I mentioned in my opening remarks.

We also estimate the biocapacity of the planet, its ability to regenerate, and when you reach a point, as we reached in 1970, roughly, ’cause, uh, in the world, uh, where the footprint exceeds the biocapacity, you have to wake up to that and say, what are we gonna do to solve that problem? Because, now we’ve got 50 years of living with that, and it’s just got worse and worse, clearly the system that n-… Katherine is relying on to help us has actually made things worse, more than it’s made things better. And, and so, the first thing I think we have to do, is recognize the overuse of the planet. The… this, this sa-… this aspect of overshoot that I’ve described, um, has to be dealt with.

And it’s not been dealt with, historically, through the wonders of the market and capitalism. Uh, it’s going to require deliberate, thoughtful constraints through on what humans allow ourselves to do to leave… And, and, by the way, if, if poorer countries are going to thrive, I think part of this argument is that it’s even more pressing that the rich countries pull back, c-… uh, create more ecological space for those poorer countries. They cannot and they do not want to depend on importing technologies from the rich countries. They want a freer future.

Katherine Mangu-Ward

If we’d started applying the brakes in the 1970s, or, or even earlier, if we had foreseen this and started slowing things down, the incredible gains in human welfare that would’ve foregone, um, not just physical welfare, but also, um, you know, developments in, in our kind of moral state, I, I just… I, I cannot see that as an acceptable trade-off, and, uh, and I don’t think that, uh, your listeners should either.

John Donvan

Peter, wh- what do you consider to be a successful economy? When is an economy successful? What ends does it serve?

Peter Victor

The first task of an economy is to provide for the members of that economy, but not at the expense of those people who are outside that economy. Um, so it’s a question of provisioning rather than, um, maximizing sales, maximizing growth, but in ensuring, uh, that the basic needs of people are satisfied, uh, with as much personal freedom as possible, but not, uh, but not continued growth, which is denying us that freedom as much as expanding it.

John Donvan

And you, Katherine?

Katherine Mangu-Ward

I think it’s, it’s an economy that facilitates the maximum number of, um, possible life paths and choices available to the people within it, in this case. In the global economy, um, that means that, um, when people have resources at their disposal, and the accompanying mobility and political rights, and, um, and other factors that go with growth, um, that they will be able to live full and meaningful lives. And, of course, they need to do that on a planet that’s healthy, but I think that the, the individual choice element of it is what will ultimately yield, uh, a sustainable outcome.

John Donvan

Okay, interestingly, a fair amount of overlap on how each of you answered that question, but we’re gonna come up to a break now, and when we return, we’re gonna bring some other voices into the conversation to move this debate in new directions. This is John Donvan. You’re listening to Open to Debate, and we’ll be right back.

Welcome back to Open to Debate. I’m John Donvan. I’m joined by Peter Victor and Katherine Mangu-Ward, and we’re debating this question, does economic growth cost too much?

So now we’re gonna bring in some other voices, some journalists who cover this topic, to take part in the conversation, and also to bring some new questions from their areas of expertise to see where it takes us, uh, i- in, in the flow of this discussion. So, I first wanna welcome, uh, Peter Coy, who is a New York Times opinion writer. Peter, thanks so much for joining us at Open to Debate, and please come on in with your question.

Peter Coy

Hi. Thanks a lot for having me on, John, and everybody else. I noticed that Katherine did not put a lot of stock in the role of government, and I do think there is a role for government here, specifically in dealing with externalities. So there are externalities of growth, uh, and the biggest one that we’re all talking about, uh, justifiably so, is greenhouse gases. Greenhouse gas emissions heating up the planet. And so, what we need is to unleash the power of the free market and use the government to come in and take care of these externalities by pricing them. So there should be a price on carbon emissions and so on.

I’ll focus the question on… to, to you, Peter. Why do we need to be thinking about degrowth or steady-state growth, b-… stopping use of resources, when we can get the good of growth, without the bad, by pricing externalities?

Peter Victor

The, the concept of externalities is very familiar to me. It’s means the, uh, effect on third parties of f-… of a market transaction. Um, it’s an idea that makes sense if you’re th-… if you’re dealing with a few easily identifiable, easily measurable examples of externalities. Um, but most, um, i-… uh, infringements on the environment, if you like, or intrusions on the environment, are not… don’t fall into that category. Uh, and, and, and, and so, you… It’s beyond the capacity of government to set prices for the thousands and thousands, I would say even more that that, examples of externalities.

Uh, and so, um, whilst I think it has a role to play, that’s why I mentioned, uh, a price on carbon, uh, a carbon tax is an… is, is an example of what you’re talking about, um, that makes sense because we’ve… we’re pretty good at measuring that now. It, it, it… The, the carbon mixes in the atmosphere, so it really doesn’t matter where it’s emitted, it does the same damage everywhere, so you can have a single price for it. As soon as that condition doesn’t hold you have to have a different price, depending upon whether the contaminant is emitted.

It’s a very easy-sounding solution, incredibly complicated to implement. And it doesn’t face up to the fact that we’re not dealing with a microeconomic problem, we’re dealing with a macro problem. A problem of the scale of the overall economy, and scale meaning the physical size, the amount of energy, the amount of different kinds of materials, um, and so on.

And so, yes, where we can price externalities, or where we have the information and know-how to do it, I’ve… wouldn’t object to that at all, but it’s a very small part of the answer to the problem we face.

33:03

Katherine Mangu-Ward

Yeah, I will certainly plead guilty to his skepticism about the role of the state in these problems. (laughs) Uh, that is, uh, that is a, uh, common trait of us libertarian magazine editors, but, um, but yeah, I th-… I mean, I think Peter Coy’s question is, is well-taken. Um, I a- agree with Peter Victor that, in fact, places where we could price these things, uh, where we could sort of, um, privatize, uh, privatize [inaudible

], or figure out other mechanisms to bring in prices, are, are, um, you know, worth investigating.

Um, but then, I think where we would differ is, he says, “But these other problems are so complicated we can’t price them,” I would say these other problems are also so complicated that I don’t know that we have, you know, in our, in our democratic institutions, uh, I don’t know that we have the ability to solve them in that venue either. And, um, in fact, we’re quite likely to get it wrong and cause, um, you know, suffering and stagnation.

John Donvan

All right, thank you very much for your question, Peter. I now wanna bring in, uh, Alison Schrager, who’s with the Manhattan Institute, and I am very happy to say, a multi-time, uh, debater with Open to Debate. So, Alison, it’s great to hear you taking part in another one of programs. So, welcome in, and share your question with us.

Alison Schrager

Thanks. This is a lot more fun and a lot easier than debating.

John Donvan

(laughs)

Alison Schrager

(laughs) Um, so I have a question for Peter. And… Growth is so intimately linked with our rise in living standards, as Katherine has pointed out, and I think it would’ve been easy in, say, 1923 to look at how people lived in 1823, and be like, “I think we’re rich enough.” Um, also, as I said, growth is also very highly tied, especially if it’s technology-driven, to using resources more effectively.

So it seems like, if we’re saying we’re gonna degrowth, or say just not grow much anymore, that you’re really consigning future generations to l- lower… either the same or even lower living standards than we have now, when, you know, there’s a lot of uncertainty and a lot of potential better lo-… longer lives that they could be having. Do you think that’s fair to them, to make that decision now for future people?

Peter Victor

What’s unfair is to leave them with an impoverished future, which we are in the process of creating because of all of the damage we’re doing to the environment. Uh, but I would challenge the question, because the increase in GDP that you cherish has not corresponded to an increase in wellbeing. In many, may countries, including the U.S. Now, I think when you face up to that, and you have to say, well, then, maybe worrying about an increase in GDP is, is overrated, and we should focus much more on the things that you and I, I’m sure, do agree are important, like being well-fed and well-housed and well-clothed, and having mobility, and this sort of thing. Um, but the answer doesn’t always lie in an increase in GDP. That’s the-

Alison Schrager

But I didn’t say GDP. I said prosperity, which is also-

Peter Victor

No-

Alison Schrager

… like, your life-expectancy, which is, like, freedom for starvation. So, like, I- I’m willing to put GDP off the table, too, but there’s other ways to measure prosperity, which have also improved.

Peter Victor

Okay, but the debate is, does economic growth cost too much? Economic growth is almost always measured as an increase in GDP or GDP per capita. If you’re prepared to take that off the table, and I… The reason to take it off the table, in my mind, is because you can show, as I’ve tried to do, many, many reasons why it’s an unreliable measure of wellbeing and improvement and progress. Uh, and the reason for that is it costs too much, because of all the other things that go along with it.

Now, I ag-… So I have the same concerns that, I think, you do, about what’s the best that we can do for those who come after us, let alone the people who are here now? And I think the answer doesn’t lie in m- more growth, particularly in rich countries, where it’s not pr-… it’s not doing what is assumed that it will do. And that we should focus much more on reducing the physical scale of our presence on the planet, and the place to start is in rich countries like yours and mine.

John Donvan

I wonder if it would help if we talked about what you mean by growth, Peter. Do you mean, for example, taking more land for development? Do you mean drilling more for oil? Do you mean-

Peter Victor

Mm-hmm.

John Donvan

… building more factories, but not more schools?

Peter Victor

I’m being very conventional here, that growth in our kind of economy, and, in fact, pretty much all economies now, is taken to be an increase in inflation-adjusted gross domestic product.

John Donvan

Okay, you, you, you did make that, that point.

Peter Victor

That’s what it mea-… That- that’s it. I, I didn’t make that up. That’s how you… Uh, that’s how it’s, it’s measured-

John Donvan

Well, there’s growth and there’s measuring growth, and you’re talking about the measure of growth, and I’m trying to talk about the thing that is measured, like [inaudible

]-

Peter Victor

Oh, well, let me tell you what goes into that. It’s consumption expenditure, investment in new infrastructure, uh, government expenditure. It includes exports, ’cause it’s domestic production. It doesn’t include imports. So that’s what, uh, g-… is in gross domestic product, and when we talk about economic growth, we mean a growth in that number. If we don’t even agree on that, then I don’t think we, we have much to talk about. That’s the standard definition. The question is, do… sh-… it… does it make sense to keep pushing for number to grow a f-… more and more and more, um, despite the consequences?

John Donvan

Right, but your opponent says that she’s not wedded to that number, so that’s why I’m trying to s-… to, to… I, I think that’s what you’re saying, Katherine?

Katherine Mangu-Ward

Yes, I mean, I, I think A- Alison captured the, the same point that I was trying to make, that, um, while I think GDP very, very often correlates with these other, um, with these other measures that she’s cited, that, uh, i- i-… the number itself, the technical things that go into the number i-… you know, is not the place where… That is not the hill I would die on. Um, but I think her, her question to you, Peter, about, you know, at any given mo- moment in history, mightn’t we have felt it’s enough? Uh, and, looking back, that would’ve been the wrong call.

John Donvan

Peter’s ar- argued, Katherine, that this isn’t 1823, in terms of what’s happening with the planet, and that that’s, that’s the thing that’s very different this time.

Peter Victor

Yes, there were about a billion people in 1823. Just a, just a bit more than a billion, and now we have eight plus billion.

John Donvan

I wanna thank you, Alison, for taking part in the conversation, and now I wanna bring in, from MarketWatch, uh, Greg Robb. Greg, thanks for joining us on Open to Debate.

Greg Robb

Glad to be here. It’s funny, I feel like I’m the r-… the reporter who’s down in the, um, boiling room of the, of the ship. Ma-… At MarketWatch, we do the GDP numbers when they come out every month. There’s a interesting speech that Alan Greenspan gave in 1999 about GDP and wh- what kind of, like, innovation it was, and how it’s really helped us kind of look at our economy. And the most important thing, really, it was non-political. So you can really kinda [inaudible

] snapshot of the economy.

I, I guess my question to, to both of you is, you know, we have to make this bridge between… to get to this new world that you want to get to, and I just wanted to know if you would point to economists or thinkers that people should, should read more about? And who, who is, like, cutting-edge on this topic, so that people can, can kinda understand how we can make this bridge from the world it is today to this world that you see in the future?

Peter Victor

Well, my answer to that question would be Herman Daly. He’s the m-… best advocate of a steady-state economy, where he argues along the lines I’ve been trying to argue, that, uh, we need to settle the physical side… s- size of the economy, so that it’s in some sort of balance, coherent arrange-… uh, relationship, with, uh, the natural systems. And he’s got a lot of policies, uh, that, that, that show you how to do that. He’s a Texan. Liberty [inaudible

] high on his agenda, but you’re not gonna find it increasing if you just turn a blind eye to what we’re doing to the planet.

John Donvan

Greg, thank you for your question. I wanna thank all three of you for, uh, taking part in the conversation, and moving things in new directions. Before we come up to our conclusion, Katherine, what are the costs that you see of the degrowth movement gaining traction being effective in any way?

Katherine Mangu-Ward

I would divide the costs into two categories. The first is the political risk cost. So this can not be a thing that is contained, uh, entirely within voluntarily action. That, uh, even using democratic mechanisms, ultimately there will be legal, uh, restrictions on people’s behavior. There will be sanctions for people who do not go along with the degrowth agenda, and so getting it wrong seems to me to have high costs, potentially, to individual liberty.

Um, and then I think the other, the other half of it is just the foregone innovation. Uh, I really do believe that, you know, there is… The place for optimism is both, uh, technical and (laughs) in the future. It’s in technology and in the future.

John Donvan

Why do you assume that?

Katherine Mangu-Ward

Uh, because people with big ideas will have fewer resources. Like, if we… if the, if the economy is to be shrunk, um, we don’t end up with the big piles of money that are often necessary, whether publicly or privately controlled, to try a big new thing.

John Donvan

Peter to respond to that.

Peter Victor

Well, as I said before, this, um, approach has failed. Uh, technology has not avoided the problems. It may have softened some, but it’s exacerbated others, and the, the overall situation we’re facing is worse than it was before. So those of you who think technology is, is the answer, I, I think you need to also look at… ha- have an explanation why it hasn’t been the answer before. Um, and, uh, I leave that, I leave that one to you.

As for this, um, freedom, I want freedom from as much as freedom to. And I want freedom from, uh, a d-… uh, a, a, a destabilized climate. I want freedom from, uh, heating up the oceans. I want freedom from the annihilation of wild animals on the planet. These are very, very important freedoms to a lot of people, and, and so, the… that’s what makes this such a difficult problem to solve, because sometimes to enhance freedom from, we have to limit freedom to. But if you only see it through freedom to consume, to carry wh-… to, to do whatever I want as an individual, then that’s not gonna be a solution to the problem.

John Donvan

All right. We see the philosophical differences there, and, in fact, it’s time to bring this home with closing remarks. Um, this is where the debaters get to make a summary closing statement. And, Peter, you have the floor on this one. Once again, you are answering yes to the question, does economic growth cost too much? You’re saying, yes, it does. Uh, this is your last chance to tell us why.

Peter Victor

Well, you’ve heard the arguments and counterarguments of myself and my opponent. Little of this is new. What is new is the overwhelming evidence that we are exceeding the capacity of the planet to support us. We are in overshoot. The combined impact of more than eight billion humans on planet Earth is doing extraordinary damage to the natural systems on which we all depend. Of course, we’re not equally responsible for this damage. People and nations with higher incomes typically consume more, and in so doing use more of the planet’s resources and generate more wastes than natural systems can assimilate. And those least responsible for the damage are often the most vulnerable.

Now we face the prospect of having to move away swiftly from our dependence on fossil fuels, while increasing protection of the biosphere from human intrusion, remediating past damage, and addressing ongoing inequities. It is highly questionable that this can be done if we insist on pursuing economic growth, especially where it is past the point of improving wellbeing.

When I present this view of our predicament, I’m often asked if I’m an optimist or a pessimist. I usually answer by quoting Professor David Orr, who, when asked the same question 25 years ago, described himself as a midnight optimist. “It’s late, but we’re still here.” That’s pretty much how I feel today. And yet, with some two billion more people alive now than when David Orr spoke those words, and a much larger global economy, maybe it’s not just late, but too late.

What keeps me hopeful are the groups proliferating around the world, working towards many of the same goals that, with luck and hard work, will evolve into an international movement to avoid the worst of what threatens to befall us. But if we let the misguided pursuit of economic growth stand in our way, we will miss our best chance for a much brighter future.

John Donvan

Thank you, Peter Victor. And now, Katherine, you actually get the final word here. Um, you get to tell us one more time why you are no to the question, does economic growth cost too much?

Katherine Mangu-Ward

So I was thinking recently, I guess, as one sometimes does, um, about the Tower of Babel. Um, and degrowthers, I think, identify with God in this parable. It’s enough. It’s too much. The tower is too tall. It’s time to end this. Um, they suggest that humanity has gone too far. We are, um, as the kids say, doing the most, and we need to be knocked down a peg.

Um, but I identify with humanity. I, you know, I identify with the guy who said, “Come, let us build ourselves a city, and a tower with its top in the heavens. Let us make a name for ourselves.” I’m with the guy who’s firing bricks and mixing mortar. And, you know, I, I think there’s an inverted reading of the story that this suggests. That the, the Tower of Babel was people working collaboratively, utilizing their skills and knowledge and resources to try and achieve something big, um, and that this captured something really important about humanity.

Um, and that the story of our failures is actually the story of, um, the natural ingenuity and cooperativeness of humans to improve our lot, and to care for the world around us, um, being thwarted by the powerful and the too proud, and the people who think that they know better or can do better than humans working, uh, collectively and, um, following their interests.

Um, humans are awfully persistent, though, and so, you know, if you, (laughs) if you take the story literally, um, we’ve spent the millennia since being scattered around by this jealous God regrouping. We keep building new towers. We keep, um, finding new ways to communicate across the divides. We’re always going to be like this, and I still think, instead of knocking the tower a-… down again, instead of degrowing the tower, um, why don’t we see what happens when we reach the heavens?

John Donvan

Katherine, bold move to turn the Tower of Babel story on its head. I, I wanna thank you, uh, and I wanna thank Peter, both of you, for taking part in this debate, and especially for the way that you did it. As, as we always say, we really wanna make the point that people can disagree. They can have deep philosophical disagreements and yet address one another with respect, end even occasionally find common ground, and I think we had a few moments of that also in this program. So, to both of you, I just wanna say thank you so much for being open to debate.

Katherine Mangu-Ward

Thank you, John.

Peter Victor

Thank you.

John Donvan

And I also wanna thank our reporters who took part, Peter Coy, and Alison Schrager, and Gregory Robb, for your contributions, and also for moving the conversation into new directions. And to all of you listening, thank you for tuning into this episode of Open to Debate.

As a nonprofit, our work to combat extreme polarization through civil and respectful debate is generously funded by listeners like you and by the Rosenkranz Foundation, and by supporters of Open to Debate. Open to Debate is also made possible by a generous grant from the Laura and Gary Lauder Venture Philanthropy Fund.

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