Consumer capitalism is unsustainable in environmental, social and even in financial terms. This chapter explores the ramifications of the combined crises now faced by the prevailing growth-based model of economics. It traces briefly the evolution of western notions of progress and in particular it critiques the very narrow view of human nature on which these notions were built. A wider and more realistic view of human nature allows us to recover more robust meanings of prosperity and to establish the foundations for a different kind of economy. The chapter explores these foundations. It pays a particular attention to the nature of enterprise, the quality of work, the structure of investment and the role of money. It develops the conceptual basis for social innovation in each of these areas, and provides empirical examples of such innovations. The aim is to demonstrate that the transition from an unsustainable consumerism to a sustainable prosperity is precise, meaningful, definable and pragmatic task.
To assess options for managing without growth, LowGrow SFC is used to generate three scenarios: a base case which projects recent trends and relationships, a GHG reduction case with several measures to reduce GHG emissions, and a sustainable prosperity case with additional measures to reduce income inequality and reduce working time. In the sustainable prosperity scenario, economic growth slows and then ceases over the period 2017 to 2067. LowGrow SFC is a system dynamics model broadly representative of the Canadian economy. It includes a sub-model of the electric power system and is stock-flow consistent. The performance of the model is tracked by several indicators including a synthetic sustainable prosperity index which declines precipitously in the base case, declines modestly in the GHG reduction scenario, and increases steadily in the sustainable prosperity scenario. The chapter concludes with an assessment of whether the scenarios are compatible with capitalism.
Peter A. Victor and Tim Jackson
This chapter outlines the essential elements of a research agenda for an ‘ecological macroeconomics’. The overarching objective of ecological macroeconomics is to investigate and promote transitions to economies that deliver sustainable prosperity for all. Central to the proposed research agenda is the need for a more profound analysis of the interactions between economies and planetary systems than has been undertaken to date. The broad thrust of our argument is that an ecological macroeconomics must encompass three distinct spheres of modelling and metrics: the ecological sphere, the real economy and the financial economy. It should also include their complex inter-dependencies. The research agenda has three main components: modelling, metrics and contemporary issues. We provide ten specific recommended research priorities based on an assessment of the current state of ecological macroeconomics and where the greatest gains are to be made over the next decade.