Tim Jackson: A Toxic Economic System

In this episode of SystemShift, Tim Jackson delivers a thought-provoking exploration of the urgent need to redefine and measure progress in a different way, given that our current economic system is clearly unsustainable and toxic. Jackson challenges the myth of eternal economic growth and its impact on our finite resources and a rapidly warming planet. He questions the predominant measure of progress across the world, Gross Domestic Product, and the popular belief that governments need to continually increase production and consumption to keep GDP rising. Jackson explores alternative ways to think about progress and prosperity that are in balance with our planetary boundaries, highlighting the devastating impact of pursuing GDP growth as a policy goal, including climate destabilisation, financial market meltdowns as well as the loss of forests and natural habitats. He argues that it’s time to change to a new metric, amid ever-louder concerns about the failure of national economies to tackle the multiple threats posed by climate change, spiraling energy costs, insecure employment, and widening inequality.

Carl Schlyter: 
Welcome to our very first episode of Greenpeace new podcast SystemShift that explores new ideas and thinking for a sustainable economic future that puts both people and the planet at its center. The current economic and financial systems are pushing the earth way beyond its ability to support humankind and all other species, creating a perfect storm of industrial production overconsumption, which is driving climate disaster and extinction of species. We know things need to change.

Over the next few months, SystemShift will be exploring how we can create a better economic system that is equitable and serves the interest of all, not just the wealthiest few. Economists, researchers and innovators from around the world would be offering their solutions.

In each episode, we will delve deep into the root causes of the dysfunction that has led to the numerous crises people and the planet are now facing. We hope this conversation will inspire you to think differently about how a better economic system could make a huge difference in our lives and the future of our planet.

Today, we are very excited to introduce Tim Jackson, an ecological economist and professor of sustainable development at the University of Surrey in the UK. Tim is a leading voice in the movement for economic system change. His ground-breaking work has challenged conventional thinking and called for structural change in the economy. Tim recognizes that individual actions, while important, are not enough to address the scale of the problems we face.

Tim is the author of Prosperity without Growth, a landmark in the sustainability debate that opened the question the most highly prized goal of politicians and economists alike. The continued pursuit of economic growth. He argues that we need a shift towards a new model of economic development that prioritizes the well-being of people and the planet rather than just GDP growth. This means rethinking our relationship with nature, challenging the prevailing culture of consumerism and materialism. We need to redefine success in the economy and create new metrics that take into account what is really important in our day to day lives.

So without further ado, let’s welcome Tim Jackson to the show. So nice to have you here, Tim.

Tim Jackson:
Thanks Carl, good to be here.

Academic beginnings

Carl Schlyter: 
Nice to have you here. I was wondering a little bit, you have been talking about growth and the problems with it for so long time. What was the start of your academic career? How, how did you end up there?

Tim Jackson:
Well, actually, I think there were a couple of starts. One, the formal start really of me becoming interested in these ideas was April 26th, 1986 – Chernobyl.  

Carl Schlyter: 
Oh, yeah. Yeah.

Tim Jackson:
Actually, the day after the news came from Chernobyl, I walked into the offices of Greenpeace in London, and I had a mathematics training and bit of philosophy. I had done a PhD. somewhere between mathematics and philosophy, and I sort of said, I’ve got these skills, so is there anything you can do with them? And they sent me towards a group in Oxford who were doing some background research for Greenpeace at that time on the economics of renewable energy. A sort of clean tech solution, if you like, to the problem that nuclear power had just demonstrated to the world and the meltdown of reactor number four, Chernobyl. Almost overnight I became a kind of accidental economist. I hadn’t had an economics training before that, but it became very clear to me very quickly that economics was at the heart of a lot of these issues. Also the technology sometimes could offer some solutions. So there was no doubt, even though very few people recognized it at the time, that, you could do a lot with renewable energy technologies and only people like Greenpeace were kind of interested in this at that point in time. At least in the UK. That was the case that, the UK government had just basically demolished its grants for funding those kinds of technologies, driven its wind manufacturing offshore and was busy sort of trying to invest in nuclear power as fast as it could. That was the starting point for me and it eventually led to a place in the university where I was looking at how technology could make our economies better. The economics of those technologies and the economic barriers to the implementation of those technologies. I suppose I started actually, very uncritically in relation to economic growth in the sense that I tried to make my prescriptions for technological changing and for funding technological change, funding energy efficiency, material efficiency, substituting material that would toxic with ones that were safer, looking at material cycles, talking about the circular economy, all of those issues very, very early on with just the then late 1980s, I guess trying to get that to fit within a model which says that our economies go on growing forever. That really was my starting point. It’s very interesting when you think about a lot of the debates now about green growth and and clean growth and sustainable growth, all of those ideas depend on the feasibility of those technological solutions, but none of them really explore properly the system level implications of a of an economy and a society that is based around the idea of continual economic growth. It was gradually a sort of, you know, realization of the difficulties of that and the failure of people to really understand the dynamics of a growth-based society that led me towards the work that was more critical of growth.

The limits to techno fixes

Carl Schlyter: 
It is easy to believe in the techno fix, because that’s manageable. You can understand it, you can control it, you can process it. But my change was actually when I went to a landfill in Brazil and I saw the social implications of where our technology, raw materials are sourced from and the impact it has on society and how uneven it’s distributed. So that was a wake up call for me. So it’s kind of similar story here. First, we think you see that obvious opportunity of technology, but then you start seeing the limits of it too, from ecological and social points of view.

Tim Jackson:
And I think that’s right, yeah. One, this just as an example, I guess. Soon after that work that I was doing on renewable technologies, I was employed by the Stockholm Environment Institute to look at actually the topic was really waste and how we could reduce waste. I began to look at, you know, different policies which we could sort of clean up technology and clean up industrial processes. We published a whole series of papers actually through the Stockholm Environment Institute on what is basically now called the circular economy. I found that in the United States as an example, which is absolutely fascinating, which is that there was legislation there called the Toxics Use Reduction Act (TURA), which is really basically to try to get toxics out of our industrial systems. Because, toxic industrial waste is a real problem alongside all the other real problems that we have. But it was the time there was quite a lot of attention to it and there were issues around the green disruption issues around the pollution of water supplies. The Great Lakes at that point in the US were the subject of real attention because industrial waste have been pouring into the Great Lakes and you had incidents like Love Canal again back in the 1980s. So there was a lot of attention to these ideas and the Toxics Use Reduction Act was something that was pioneered by the Office for Technology Assessment in the United States. They began to say, look, why don’t we just start reducing toxics out of our industrial supply chains, find things which are safer, substitute towards those and make that work? And hey, look, actually, there’s lots of places where this will save you money. I did some of the background research on that. I looked at some of those examples and it’s true, there are places where you can save yourself money as a as a company by using less toxics. First of all, you’re buying fewer toxics. You might need to buy some other things, but toxic chemicals do tend to be quite expensive. And second of all, you are throwing away fewer toxics and there are charges associated with it. That was, you know, increasingly the focus of legislation was to create a charging environment where there were penalties for polluting environments. So you save your money, on both ends essentially. And that is very interesting aspects of that exploration and sort of hit my attention, which was that the states in the US who were introducing Toxics use reduction legislation were primarily those states which consumed toxic chemicals and the ones who were resisting it, and it’s not really a surprise when you think about it, were the ones who are producing toxic chemicals. So in other words, it’s sort of alerted me at that stage to the idea that, yes, you know, there are these places within the economy where we could actually do well. We could do better than we’re doing at the moment by using fewer polluting chemicals, reducing our emissions, reducing our costs on the supply chain. And companies could do better. They could grow. But there are also other places in the economy whose business it has been to produce those things which we are now trying to get rid of. That means that there’s a threat to the profit margins of those companies, the revenues of those companies, the wages of the people who are employed in those companies. And ultimately, it’s a gross itself. In other words, when you begin to think systemically about getting rid of a simple problem like toxic chemicals, you find that you’re woven into it from two different directions. One side, yes, lots of savings, lots of benefits to be had. From the other side, you’re talking about losing jobs, losing revenues, less profit margins. Ultimately, that hits the bottom line of the state. That I think was one of the early points at which I began to realize that this sort of simple equation, this win win equation, that you could save carbon, for example, reduce carbon and make money, reduce toxic chemicals and make money. You could reduce waste and make money, and that would all turn out for the best for this wonderful model of growth. It was just one of those places where I began to sort of see that it’s not quite as simple as that. 

Carl Schlyter: 
It’s even more less simple so to speak, because sometimes these companies actually sell other alternatives, but they still defend the old product.

Tim Jackson:
Yeah. It’s a reign instantly of a kind of greenwashing. Yes,with toxics free in this and that products. But actually, we’re still selling toxics or disposing of toxics in the developing countries for example. A lot of shifting of burdens went on at the same time as this process of apparently cleaning up inside the industrial economies, just even exporting lots and lots of your industry, new manufacturing, you know. Toxics use outside those countries was part of another episode 1984 when I think it was Bhopal chemical factory in India releases toxic gases which killed ultimately hundreds of thousands of people and the burden of responsibility for that actually lay with Union Carbide in the US. But it was so distanced from the chain of responsibility, It was so distant from where the impacts happened. It’s like a sort of shapeshifting Whack-A-Mole. You know, you try and hit the problem in one place and it sort of appears somewhere else. And the ultimate responsibility lies in the way that we produce and use and consume and dispose of material products. That is inherently linked to our ideas about what an economy should do. In particular, that an economy should constantly be growing.

The impact of the economy on nature & biodiversity

Carl Schlyter: 
And the logic of this podcast series has a little bit to show the impact on nature of our economy and why our economy should be respecting the limits of nature, the limits of biodiversity and climate and other environmental impacts as well as social impact. So, if we want to rein in the economy within those limits, which makes perfect sense, actually it’s not what we see. I mean, also this kind of replacement logic that you talk about, you have this kind of feedback loop. So for example, yes, you replace one toxic chemical, but sometimes the function that you want from this chemical itself is the basis for the toxicity. So even if you replace it, you replace it with a less known chemical that has less known toxic effects. If you have the system view you that you mentioned, how are these toxic effects measured today in our economical progress? Is a toxic chemical per definition, bad for GDP, so to speak?

Tim Jackson:
No, I think by definition a toxic chemical is good for GDP because, you know, it has lots of uses in the economy. It has a production process, a supply chain that can contribute gross value added in the economy, that allows you to employ people. Those people have incomes. They spend those in the economy. All of those things create growth for the GDP. Ultimately that’s the problem in a sense, is that economies are implicated around chemicals, chemical processes, emissions outputs and supply chains all in pursuit of the expansion of the economy, the expansion of the gross domestic product. And that even removing some of those simple ones will have internal impacts on those supply chains, on the companies that are involved in the people who are employed, and even perhaps all the people who consume those products, households and us. We’re implicated in that supply chain both as producers and consumers of this mass of chemicals, materials in the economy that we use in order to stimulate production, to produce products. And and let’s face it, some of those products are useful to us. And ultimately to create this sort of chimera, this myth of ever expanding economic output that is supposed in principle to contribute positively to human well-being. So we shouldn’t I mean, that’s, I think, something that does tend sometimes to get sort of forgotten in the arguments against gross economists who promote growth, promote the idea that growth actually gives us more income, better lives, better choices, more access to material goods. It allows us to alleviate poverty without asking anybody to sacrifice anything. And ultimately, the aim of that growth-based economy is human well-being and increasing human well-being. We know and you said to me earlier the focus of this podcast is about the impacts on the planet. We know that the impacts on the planet from that increase in well-being have been very, very profound. Climate change is one of the most obvious ways in which it’s been profound, and that’s profound because climate change is basically around our use of carbon in the economy, in the use of carbon in the economies. Absolutely integral to the industrial model that we had. And biodiversity is the other obvious impact. Talk about everything that we do, the the production of food, the creation of manufacturing, the impacts on the land creates an impact on the habitats of the other species that we share the planet with. And over time we know that that has been absolutely catastrophic, that decline in species, that attack on nature and now our attack on the climate as well has created an environment in which the further expansion, the ever-increasing idea of economic growth just does not look feasible anymore without passing those tipping points that scientists talk about which lead to collapse and again, for me that that systematic idea is one of the reasons we have to critique economic crisis.

Limits of GDP as an indicator of human wellbeing

Carl Schlyter: 
So even before we go into the feasibility or even desirability of continued economic growth, you mentioned that, okay, you have a chemical, it might be useful, but if you cannot see in the GDP the negative effects on biodiversity or climate or health, then you don’t get the right appreciation of the value for society of this chemical. The costs on society and nature is hidden. So what is actually included when you talk about GDP, what is included and what is excluded?

Tim Jackson:
You might not expect me to say this, but I am actually a kind of a fan of the GDP as a measure because it’s a very sophisticated measure, but it’s sophisticated only in its own terms. So it’s a measure of how much is produced in the economy. It’s a measure of how much income there is in the economy. And simultaneously it’s a measure of how much we consume in the economy. And ultimately, those things should lead you to the same number. Everything we produce creates incomes through wages and profits, and those are spent in the economy on goods and services. And so, whichever way you try and add this up, and this is one of the things that’s very sophisticated and clever, if you like, about the net system of national accounts is how you can use it to understand that system of production and consumption and supply, how you can ask questions about employment, about public spending, about investment. And it all sits within this lovely statistical framework called the gross domestic product, the GDP. So that’s what it is. But there’s also another kind of, you know, very, very simply to put that in very simple terms, it’s a measure of the busyness of the economy, and that should be really where it stops. But what it’s become, particularly in the last 70 or 80 years, it’s become a kind of performance indicator. So how well we are doing in society. If you just take that consumption, you know, how many goods and services we consume, take that as one way in which the GDP is measured. Economists would say, conventional economists, would say, how many goods and services people are prepared to buy in the economy? They wouldn’t buy those things if they weren’t doing this good. They wouldn’t buy those things if they weren’t creating well-being for people and for households. And so that must be some measure of human well-being. So they equates the GDP with human well-being in that sense. And obviously we want human well-being to increase and not to decrease. And so we should continually be striving for GDP to increase and not to decrease.

Carl Schlyter: 
Well, that might be true at a low level of consumption. Of course, it’s better to have food and to starve to death. Of course, it’s a good way to have a safe place to sleep, maybe even heated one. Of course, that’s like absolute consumption. But then at a certain level, you have a disconnect between this. But before we go into that aspect, I would like to add what’s not included in GDP. So I love making jam. If I go out and I pick blueberries and I take some branches from the garden and I put them into my old grandfather’s wooden stove and I cook this jam there and I use my old jars that I recycled. Actually, the GDP output of this is virtually zero, but still I have my jam in my cupboard. If I went out and worked a little bit extra to buy this extra jam, it looked like, wow, the economy is growing. We are busy, we are doing stuff. But I have worse jam, I have less fun, I have less pleasure in life. But still GDP growth. So what else is excluded from GDP?

Tim Jackson:
This is exactly you know where your point about what’s measured and what’s not measured comes home to roost, as it were. And the next thing we’ve known and economists have known and even politicians have known for a long time that the GDP is not a good measure, ultimately of lots of things. It doesn’t measure the environmental impacts. For example, it doesn’t measure the forests that you cut down. It doesn’t measure the pollution to the ocean. It also interestingly, you know, it doesn’t it includes some of the damages that those processes create. Clearing up after an oil spill, for example, will contribute positively to the GDP, looking after people who’ve become sick because they suffered from mercury poison, which was used in the production of chlorine that kept our drinking water safe because it was polluted with agricultural runoff, contributes positively to the GDP. So you have a set of activities and it all looks like it’s doing is increasing the GDP, but actually it’s missing the impact on nature. It’s missing actually that complexity that we were talking about before, that organization of the economy around industrial processes that themselves create impacts on human health, on society and on the planet. It misses all of that. It also misses and this is a big one, I think, it typically misses the distribution of income within the economy. So when we measure the GDP, we tend to measure the total GDP across the economy. And sometimes we take an average of that. We measure the GDP per capita within the economy. So GDP per person, within the economy. But we know that within that, some people are very rich and some people are incredibly poor, and the GDP just fails to measure that at all. And it doesn’t measure things like let’s talk about unpaid work, let’s talk about the informal economy, the care economy, looking after our kids, all of those things without which we would have no economic activity at all. All of these go missing from that formal accounts of what we think the economy should be. So there are all sorts of really good reasons, actually, for praising the GDP is a very, very clever statistical measure and throwing it out as an indicator of well-being, of human well-being. 

Economic growth, power and the rise of inequality

Carl Schlyter: 
Why have we had this super enormous focus on growth when other policy instruments actually generate more well-being?

Tim Jackson:
I think partly from a sort of a myth that continues, that is perpetuated still to this day, the idea that if you grow the pie as a whole, you grow the economy as a whole, eventually that will mean that you will lift people out of poverty, that they will have better lives. So Kennedy, John Kennedy, sort of famously described a rising tide lifts all boats. So if growth is increasing, if the economy is growing bigger, wealth will trickle down. That’s called trickle down economics. And the poorest will eventually be able to lift themselves out of poverty. And this a very interesting statistic. So you can go and see here that we looked at some research of, actually when Kennedy was talking about that it was kind of true. The economic growth was doing better for poorer people, so poorer people’s incomes were increasing faster than the level of economic growth and richer people’s incomes were increasing slower than the rates of economic growth. And that meant that as the economy grew, you were getting a more equal society. You were decreasing that inequality. You’re doing exactly what that trickle-down theory said you should do. And then it stopped and it stopped over a very specific period of time, which was round about, between the late 1960s and the early 1980s that turned around. And if you do the math, in the period since the mid 1980s, certainly what you find is that the rich have been getting much richer and the poor are getting poorer. So that dynamic of trickle down actually turned into a dynamic of trickle up.

Carl Schlyter: 
Streaming up, I would even say.

Tim Jackson:
Absolutely. Yeah it. Yes, yes. Very good. I’m going to use that in the future. It has been certainly over the particularly over those years that led to the financial crisis. You know, it created huge inequalities in incomes, huge inequalities in wealth, huge inequalities in property. And the pursuit of economic growth was one of the reasons that was driving that inequality. So it stopped being a way in which we could reduce inequality and became a way in which inequality was increasing. And we did a calculation a few years ago for Parliament here, actually, and it was based on a really lovely methodology developed by an economist called Anthony Atkinson, Tony Atkinson, who worked a lot on inequality. He came up with a sort of welfare equivalence of the unequal distribution of your incomes. And he basically he said it actually has a cost, it has a price. You can work out what the cost of having an unequal society is. And we did a calculation actually looking at what that cost would be, and I think we found it would sort of more than fund the cost of the National Health Service in the UK. If you incorporated that cost of inequality in your decision making, then you would actually you would settle for a smaller economy and you would distribute those costs more equally and the economic benefits of that would actually allow you to cover the costs of your health service at the level at which we were spending at that point in time.

Carl Schlyter: 
Not only that, actually, because it has also negative impacts on bullying, violent crime, even rich people in a very unequal society actually feel more stressed and have more illness than in a more equal society. So it’s actually not only benefiting the people with low incomes, it’s actually benefiting the whole society.

Tim Jackson:
That’s absolutely right. Everybody is better in a more equal society. I mean, I think that’s true up to a point. In general, everybody is better. There are certainly and I think this is where it becomes difficult and it becomes the point in which what we are talking about to some extent, is power and the distribution of power. There certainly are some people who benefit from an unequal distribution of income and that allows them to maintain an unequal share, an unfair share, of power in the economy. They use that power to maintain the inequality in the distribution of income so that their loss, the loss that they might feel in monetary terms of having a more equal society is avoided. So I you know, I don’t think I think it’s true that Wilkinson & Pickett argument is definitely, you know is borne out in all sorts of ways, all sorts of statistics. But we should never really lose sight of the fact that there are vested interests, and those vested interests can be incredibly powerful and that power will seek to disrupt attempts to create inequality that undermines their power. I think that leads to a question, maybe you are going to come on to it maybe you want, but it does speak to the question of government, obviously, and the role of government, and that the importance of social contracts and how power is negotiated in democratic societies. And ultimately, you know, you can’t you start with that very simple question. You know, we’re looking at the supply chain of, I don’t know, chlorine manufacturer and the mercury impacts on the floors of the chlor-alkali plants and the impact that has on human health. And you run forwards from that thinking about the implications to the economy. And then you look at actually the relationship between the economy and human well-being, and you say actually a more equal society would be better for all of us. And then immediately you’re thrown into questions of power and why that doesn’t happen. And for example, who would be the losers in that chlorine mercury example, which was a very old Greenpeace campaign, actually, both around mercury and around chlor-alkali and around the use of chlorine in society and around water. And you find actually that those questions of power and who owns what and who suffers while those people who own the assets gain that balance between suffering and gain actually becomes incredibly important in discussing power. 

Capitalism and human greed

Carl Schlyter: 
But just as you have developed, Greenpeace have also developed and we have a podcast about the financial system, we are more looking at the root causes rather than end of pipe problems. So now we are here, we are looking at the root causes and this kind of increasing inequality today. It’s also linked to our financial system and the invisible exploitation of people and the planet. And part of this is also money generation, the increased debt. An economic friend of mine said that debt is a time machine. You can do things now and you put it in the future. But this kind of debt increase that we have been seeing, what does that has an effect on both growth and inequality? What do you say about that?

Tim Jackson:
Yes, it clearly does. I mean, the financial system is incredibly important. I mean, you can’t think about making these changes unless you think about shifting where investment is made. One of the problems is that the financial system was designed to do well, particularly for the owners of financial assets from an industrial system which is creating damage to the planet. And none of the cost of the damage to the planet was included in the value of the assets. The assets were essentially, you know, financial assets that financial owners would exploit as far as they could and trade as fast as they could to create as much financial return as they could, in order to put in the pockets of shareholders who were greedy for increased wealth. We begin to talk about human psychology here I guess, in the sense that the old system believed implicitly in a way that human greed was a good thing. Greed was the thing that kept that financial machine running. It was what allowed and and motivated people to go out there and invest money so they could get a return, so that they could accumulate wealth. That that wealth would then be reinvested or would make them richer and give them power to reinvest in the next iteration of a sort of accumulative system. That’s really what capitalism is. It’s that, and the underlying psychology of it is that the best motivator for keeping that happen is human selfishness. It’s greed, it’s the acquisitive instinct, it’s the instinct for accumulation and expansion. And that that is a good thing. Of course, you know, in the sense that it keeps the financial motor going, perhaps you could characterize it as a good thing, but in the sense that it neglects the interests of working people, the people who are the wage earners, who are creating the products, who are working inside the financial system, but not being rewarded by that system, and that it neglects the impacts of all of that productivity on the planet. And all of those costs are not borne by the shareholders, they’re borne by future generations, by workers in the current generation, by people who are unpaid in the current generation and the Global South. And that becomes that analysis becomes a deep critique of the entire model of what financial capitalism has been doing on the planet over the last 150 years. And there is now, and you mentioned this and it’s a good thing, of course, there is much more of a critique of that financial system, even within the system itself. And so we hear a lot about ESG environment, social, governance issues, which have to be taken into account when you’re creating your investment portfolios and evaluating your companies. And, you know, you can now talk about green capitalism, if you like, or you can talk about green investment or sustainable investment, which pays attention to these ESG issues and therefore is on paper at least, a better thing than rampant capitalist greed, which was running the system before. 

Productivity and its impact on the care economy

Carl Schlyter: 
But then also maybe at the beginning when what limited human well-being was our capacity to transform nature into things that made life easier, to let these powers of productivity loose, so to speak, was maybe more harmless than now. When the world is full, the atmosphere is full of our carbon dioxide, the rivers are full of our pollutants. The land use expanding way beyond biodiversity borders. So today this logic should actually be replaced by a new one where we respect these things that uphold life. But the current system just failing, even if you mention green capitalism, green bonds and all that, it’s still kind of this extractive economy we have never actually managed to have this decoupling. So many people love green growth because yet again, we can just continue and everything solves itself. What’s your take on green growth?

Tim Jackson:
I think would be very nice if anyone could prove that it would ever exist, and nobody has, and I’m not convinced that they will. But I, I wanted to go back to your point about the productivity, because I think it’s incredibly important that and I really I do agree in a sense that that productive moment in history where we could create better homes for people, where we could create more nutrition, better nutrition for people, where we could have innovations in the energy system, for example, that made our lives incredibly better, where our water supply systems managed to evade epidemics of disease that had decimated populations in pre-industrial times. For me, it’s not about denying that those things are good, that there was a sort of productive moment, but I think there are a couple of points and I just wanted to draw them out and around that notion of productivity that are incredibly important to think about. And one is that productivity depends on what you’re measuring. So we think of manufacturing, for example, as being very productive and we like it. And financial markets love it because it is extractive ultimately because you can increase the productivity. And largely that increase in productivity is built around technology. And the technology, yes, depends on material resources, but those typically are uncosted or not fully costed in the equation. So financial markets love the productivity that you can get out of manufacturing. And to the extent that it produces useful products for society, for a society that needs those products that ultimately would fail if it didn’t have those products, we can think about productivity as a good thing. But what it isn’t measuring and it’s isn’t measuring those costs so that it’s not measuring the cost to the environment, to creating that productivity. And then there’s another thing which goes missing out of that pursuit of productivity, which is that some activities don’t appear as being productive for all because they are unfunded or unpaid in the market or have very low wages and they are resistant to productivity. So this is a kind of area of where we begin to think about why the economy we’re working towards might be a lower growth economy because it doesn’t have the kind of productivity gains that we got from manufacturing, from extracting stuff out of the earth, turning it into products as fast as possible, selling as widely as possible, and throwing away keeps us something that is very economically productive but damaging to the planet. But it all rests. All of that rests on what I would call the care economy, on the economy of unpaid, low paid time, which is about raising children, looking after people, taking care of them when they’re sick, looking after older people, an economy that falls outside the productive economy to the extent that it is seen by some economists as stagnant or unprogressive or uneconomic because it isn’t contributing to that output oriented view of what we should be doing. And yet it is an absolute the essential basis for anything that we do. And we just don’t pay attention to it. Productivity typically in conventional economics is measured through what’s called labour productivity, which is the outputs that you can create through an hour of work in the economy. And it’s a pretty good measure when you’re talking about things like manufacturing, and it’s something that you can increase continually when you’re talking about manufacturing because you can replace people with robots and AI and technology and capital that you know, does things faster and you can distribute that capital through networks. This are now oriented around the Internet and around the digital age and all of that can happen much faster. When you looking after someone who has fallen ill or when you’re looking after a small child or when you’re looking after an elderly parent, there is no substitute for the time that you spend in those tasks. There’s no substitute for the time that you spend in a one to one relationship with your tootsies. If you’re teaching and in a university or with your class when you’re giving a lecture, you know they’re going to make bigger and bigger lecture halls. Yes, you can take some stuff online, but there are certain kinds of tasks in the economy that resist that productivity growth. And yet they’re also tasks, and this is where it gets fascinating, there are tasks that are essential to human well-being and typically they have less material impact because the value of the products or service actually is the time of the people engaged. So this is an economy where you could employ lots of people because you need lots of time. It’s an economy that’s very good for people because it contributes directly to human well-being. It has less impacts on the planet because it isn’t revolving around material consumption and material production. And actually there is evidence that if you get those bits of the economy right and you make that economy work properly, these are more satisfying jobs than sitting on a factory line somewhere producing widgets. And so it’s an economy that we should want, but it’s penalized massively within the conventional economic system because it doesn’t conform to the idea of productivity growth. 

Carl Schlyter: 
But I want to go back to the second part here, where you mentioned that personal services be more meaningful, but that’s also more difficult in the traditional sense to be having a high productivity gain. My hairdresser told me once that when he started to cut hair, he could buy one bucket of potatoes. But now you have to sacrifice three buckets of potatoes to get the haircut because the production of potatoes is more efficient than his hair cutting. He’s not much more quicker now than 30 years ago. So what we forget is that, even if we pursue this society where we have more of this, you know, relationship and then giving time to each other, that is not going to have the same economic growth as the old society. 

Tim Jackson:
That’s exactly right. So that is why the sector is penalized under conventional economics, because economics focus is on growth. Those sectors, personal service sectors are, as I said before, and this was the verdicts of an economist called William Baulmol, they are stagnant, they don’t move fast. 

Carl Schlyter: 
Scary word for an economist.

Tim Jackson:
Exactly. Well, scary what for anyone is a very pejorative reflection on actually all sectors, the economy that are vital to our survival. And so it really gives you an insight into the mindsets of economists. They think that the economy, you know, has to be something which is super productive in their measured sense, that contributes monetary output as fast as possible and with as little possible human input. And it’s when you characterize it in that sense, it’s actually sort of fascinatingly meaningless because it doesn’t reflect the value of employment, the meaning of work, the value of output, the one on one time that people spend with each other, or indeed, you know, the fact that you can do all that without huge material impacts. So William Baulmol ended up calling it the cost disease that these sectors of the economy, these very good sectors of the economy, from a sustainability and from a human well-being and from an employment points of view are stagnant sectors that hold back growth. And therefore, you kind of have to manage as best you can by well, essentially, you know, this is where the model begins to unravel because essentially what Boumal and conventional economists would argue is that you can only afford to have those sectors if you have a fast growing part of your economy somewhere else, and then you get taxes to the government, and the government underwrites the slow sector of the economy and the slow sector of the economy can therefore survive. And you can have these nice to have things like health care and social care and and child care because you paid for it through the fast sector of the economy. And the trouble with that vision of it is it immediately sets up a two tier system in which one sector of the economy, the fast growing sector, is what you aim for all the time. And the other is the bit that you try to minimize as much as possible because it’s just stagnant and it’s completely turned on its head from where it should be, because without that stagnant, slow sector of the economy, providing care for people, health for all of us, you’d have no workers, you’d have no society, you would have no productivity, you would have no economy. 

Carl Schlyter: 
Certainly, this quick expanding part of the economy is also the part with the highest environmental impact and biodiversity destruction.

Tim Jackson:
Exactly. And actually, you know, interestingly, William Baulmol started writing about this in the 1960s, and he he was still writing about it in 2012 when he was 94 years old. And it took him those 40 years of his economic career to get to a point. There’s a lovely book that was published in 2012 called “The Cost Disease: Why Computers Got Cheaper and Health Care Didn’t”, I think is the subtitle. Which exactly encapsulates that whole idea of the cost disease. And in that book, really, for the first time in his entire writing, he said, actually this is the sector of the economy that we want. This is the sector with high employment, good output, meaningful work, low impacts on the planet that is creating services that contribute to the quality of our life. And yet the reality is we have an economic system that struggles to deliver that.

The post-growth economy

Carl Schlyter: 
What is the way out of the gross paradigm?

Tim Jackson:
I think essentially that the work that we do in the sense of that I lead, the sense of the understanding of sustainable prosperity, is aimed at fulfilling what I think is a kind of gap. A lacuna in economics, a blindness, a blind spot in economics, which has been unable to look at the idea that the economy that we want may well be a post growth economy. That the economy that stays within limits may have to be a post grace economy, the economy that recognizes the value of services and the slow, less productive, less productivity growing, but absolutely essential services, that that may have to be a post growth economy and asking ourselves the questions. Two really critical questions. One is how and where have we become dependent on economic growth? Where do those gross dependencies live? Why are we chasing after this growth constantly? How could we organize things differently that were less dependent on growth? Because particular in the in the developed worlds, the growth rate has been declining for the last half a century anyway, and to all intents and purposes, and we saw this through the pandemic. And since the financial crisis, to all intents and purposes, we’re already living in a post growth economy. So we desperately need to understand where those dependencies live inside that system. 

Carl Schlyter: 
And we have been pumping the system. 

Tim Jackson:
Exactly. Been pumping that up because we didn’t know any way out of that decline in productivity growth other than to try and pump prime it with more money and in speculative financial markets to expand investment that would create more productivity in the future. And almost without fail, that has not delivered productivity increases in the way we hoped it would. It has delivered financial insecurity. It was the, in my view, the underlying reason for the financial crisis in 2007-2008. It’s stopped us investing in the care economy so that when we hit the pandemic in 2020, we were in a situation with drastically reduced health care infrastructure, which cost lives. Both of those things cost lives. Ultimately we are unable to create an economics for the needs that we have in the society that we now face. That pump priming of financially driven growth is at the heart of a lot of the problems that we face in society at the moment. The other theme, I suppose, broad theme within our research work apart from that gross dependency, is, you know, what does an economy look like? What does a society look like, in a world in which we don’t have growth anymore? How do you make the macro economy stable? How do you look after employment in that model? How do you understand the relationship between the government and the markets in that model? How do you think about investment in that model and bringing those together alongside even deeper questions, psychological questions? What is life like? What are human beings like? What is our what is what are our sources of well-being and satisfaction and fulfillment in this post-crisis economy? And almost all of these questions have been almost forbidden, like a taboo set of questions, even though they’re blindingly obvious that we should have been asking them. We have not been asking them, and therefore we are lacking the depth, the expertise, the research, the policy implementation and the social vision for this post growth well. 

Policy changes against gross dependency

Carl Schlyter: 
Yeah, it is good you mentioned that. So let’s say you want to inspire people. You want to bring hope back. You are a policymaker, you’re the commission, the European Union, or you’re a prime minister and you get your message here. What kind of policy measures would you recommend to national or EU decision makers that could bring us on this correct path?

Tim Jackson:
I want to sort of divide that question because I think policy is a part of what we have to do. But I think strategy is also something we have to do. And I want to just go back in a sense, to prosperity with our growth, which was the report of the UK government, and we did at the end of prosperity that growth. There was a list of policies and they covered, you know, the economics, they covered things like work time reduction and universal basic income and regulating the financial system, regulating investment, investing in the right things, creating a different portfolio, protecting people’s social interest, reducing the idea and the prevalence of consumer society, changing the social logic, the whole list of things and I think they’re all important. 

But I think, you know, ultimately since that time and one of the things that we tried to do on the back of the publication of Prosperity Without Growth was to persuade the government, this is a non-trivial question. It’s a profound dilemma that advanced economies are facing, and it requires a kind of dedication to a strategic change in direction. We can’t immediately do that with the sort of short term thinking or policy fix. Policy fix is is a little bit like the tech fix argument we were having at the beginning, because it’s a sort of assumption that the existing structure can deal with it if you get some magic bullet on solving problems. And quite often, even the ability to introduce those magic bullets is being obstructed because you have a set of interests which is inherently linked to the structure and the pursuit of economic growth. And that’s that question of of understanding our gross dependency that I was talking about is one of the goals of the research that we’re doing, that understanding of gross dependency. And I think that’s something that if I was in that position in my first day in the job, that would be something that there had to be a strategy about. We have to begin to understand gross dependency. We have to understand that in financial markets, we have to understand that in the caste system, we have to understand it in consumer psychology. We have to bring that expertise to bear in devising a set of policies that would then allow us to escape from those gross dependencies. How you structure social care, for example, do you financialize it? Do you allow offshore companies to own your social care companies which look after your old people, which is subsidized by government and then don’t even pay taxes in this country? These are the kinds of detailed questions that you have to begin to unpack when you’re thinking about gross dependency. And then I think there are sort of, you know, when it comes to the policy smorgasbord, if you like, that kind of platter of possible policies in different areas. And when I wrote Prosperity Without Growth, essentially I characterized them as establish the limits, make sure that your planetary limits are a part of your decision making framework and your accounting framework. Fix the economics. Take out those perverse incentives to be doing the wrong thing and put the right incentives to do the right thing in there and change the social logic. Begin to build what it means to be a post consumerist society. And there are lots of detail inside that. And of all of those, I think, you know, for me, alongside that gross dependency strategy on day one, there would also be something around financial markets because the way in which financial markets operates, even with ESG as its mantra, is still tragically taking us in the wrong direction in terms of all the investments that we’re making. 

Carl Schlyter: 
Well, that was music to my ears, both with policy, but also with the necessary strategic changes. So thanks a lot.

Tim Jackson:
Thanks. Carl.

Tim Jackson, an ecological economist and writer, is the Director of the Center for the Understanding for Sustainable Prosperity at the University of Surrey. Tim is the author of Prosperity Without Growth, Material Concerns and Post Growth—Life After Capitalism.