Democracy without growth?

An interesting article by Gillian Tett in today's FT posing the question, mainly in an American context, whether democracy is dependent on economic growth.

I think there are two big issues here: firstly, whether and for how long we can expect economic growth to continue in the developed world and, secondly, whether a sustainably peaceful and democratic society is possible without growth. Around those issues I have in my mind a number of hypotheses. The informal testing of these hypotheses provides some framework to my otherwise haphazard studies of the issues. Here is a bunch of hypotheses:-


1. The end of economic growth through depletion of mineral resources alone is not imminent - coal is still an abundant resource and new technology means that, for a time, supplies of oil and gas will be adequate to allow continued growth. However, the supply of land and water for growing food may not be adequate for a growing world population.

2. Effective action to mitigate climate change will reduce economic growth unless and until technological progress yields an abundant supply of low-carbon energy. If we are serious about tackling the threats from climate change, the continuing abundance of coal, oil and gas will be of no help to us. The notion that action on climate change promotes economic growth is a myth promoted to make action on climate more palatable.

3. Climate change itself could at some point devastate the world economy - initially through a collapse in agricultural productivity.

4. Material living standards in the developed world are likely to fall more than the rate of economic growth. This is because, for a time, there will be a switch from household consumption to investment in renewable energy and energy conservation.

5. Economic growth in an energy-constrained world will depend on technological progress to increase efficiency in the use of natural resources and/or a switch of household spending towards non-resource-hungry goods and services (eg to theatre-going instead of long-haul holidays).

6. For a variety of reasons, including increased competition from emerging economies, we cannot expect a return to rapid economic growth in the developed world unless the developed world maintains a big technological lead, which seems unlikely.

7. Reduced economic growth and diminished expectations of rising living standards will put strains on our political system as it will expose more starkly issues of how wealth is distributed. There was a time when major disparities in wealth appeared justified by the benefits to all through rising living standards. Those days may be over. This is one reason why action on climate change is a more problematic issue for the right than for the left.

8. It may well be possible for the political and social culture in present-day democracies to adapt to a low- or no-growth economy. Reduced material living standards will not necessarily entail seriously reduced quality of life.

No doubt I will be returning to these hypotheses frequently in future posts.