It was incredible to see the chairman of the World Economic Forum stand up in Davos last week and admit that capitalism is broken. "Capitalism, in its current form, no longer fits the world around us," said billionaire Klaus Schwab, whose message could have been ripped straight from the protest signs of the Occupy movement.
It was equally incredible to see Prime Minster Stephen Harper stand up at the same forum and arrogantly dismiss these criticisms. At a time when the world needs new ways of thinking, Harper wants to preserve the status quo. He stood up and said economic growth is his number one priority. But not before wagging his finger at his European hosts, saying they have lost sight of how to create jobs and growth (with diplomacy like that, it's no wonder Canada lost its bid for a seat on the UN Security Council). Harper then went on to talk about his pro-business policies, suggesting other nations would do well to follow his lead. He spoke about how he remains determined to build a pipeline to supply oil to Asia despite objections from First Nations groups and other citizens. "We will soon take action to ensure that major energy and mining projects are not subject to unnecessary [environmental] regulatory delays," he said.
In the words of Oscar Wilde, Harper is a man who knows the price of everything and the value of nothing.
Canada is ruled by a prime minister who can't connect the dots. Harper views the economy and the environment as two separate things to be tackled in isolation from each other. But this is a false dichotomy. The economy is a sub-system of a larger and finite system, the biosphere. From the perspective of physics or ecology, permanent economic growth is impossible. An ever-expanding economy within a biosphere of fixed growth is, as Lewis Thomas put it, "stupidity on the grandest scale."
This is not an argument against economic growth. Economic growth, up to a certain point, is a good thing. It reduces poverty. It reduces the rate of child mortality. It increases opportunities for education. It increases quality of life. And it improves the standard of living.
Yet, while it's true that economic growth improves human well-being, uneconomic growth -- growth where the costs are greater than the benefits -- is making us poorer, not richer. Former World Bank economist Herman Daly argues we need a more complete measure of wealth than GDP. That's because GDP measures an economy's total output but it doesn’t take into account harm done to the environment. "Everything is added in GDP; nothing is subtracted," writes Daly in a recent issue of Resurgence magazine. He suggests the negative consequences of production (things like nuclear waste, biodiversity loss, climate change, air pollution, eroded topsoil, dry wells, depleted mines, and oil spills) should be subtracted from the positive consequences of growth. He argues these costs need to be counted and netted out against the benefits.
Unlimited growth in a limited world
Unlimited growth is an old concept, one that was created at a time when our numbers were far fewer and when we didn't recognize the earth's natural systems were finite. If we continue on the current economic path, writes Lester Brown in his book Plan B 2.0, "the question is not whether environmental deterioration will lead to economic decline, but when. No economy, however technologically advanced, can survive the collapse of its environmental support system."
Part of the problem is that ecosystem services are not reflected in the current market system. As a result, people are not aware of their importance and place little or no value on them. Ecosystem services -- things like regenerating soil, recycling nutrients, controlling floods, filtering pollutants, pollinating crops, and maintaining the atmosphere -- have no commercial value, even though they are essential for the continued survival of life.
The chairman of the World Economic Forum admits it's time to rethink traditional economic growth. More importantly, he said, we must assess the quality of growth.
"How sustainable is it and at what cost to the environment? How are the gains distributed? What has become of the family and community fabric, as well as of our culture and heritage? The time has come to embrace a much more holistic, inclusive and qualitative approach to economic development," Schwab said.
Stephen Harper's support of the current capitalist system is, in contrast, embarrassingly out-of-touch. Worse than that, it's taking us down a road that leaves us vulnerable in the face economic decline, fossil fuel depletion, and climate change. We need new ideas, not more of the same thinking that got us into this mess in the first place. If the billionaire founder of an annual capitalist love-fest gets it, why can't Stephen Harper?