This is the fifth in the series, A Soft Landing, which explores how we might achieve a more just, equitable society without violent revolution.
A new Constitution, discussed in the last three essays of ‘A Soft Landing,’ is insufficient alone to ensure a peaceful transition to a more equitable society. We will need tidal change in our economic, social, political, and educational perspectives as well. Perhaps the most challenging shift will be dialing back our fixation on economic growth to embrace economic balance. The American mantra of ‘economic growth’ is universal. It transcends ideology, party, race, and class. It even transcends our boundaries: the entire world aspires to accelerated consumption. We proclaim that economic growth is essential to our wellbeing. On the contrary, it hastens our doom.
For the first ten thousand years or so of human existence, as we evolved from hunter-gatherers to agriculturalists, economic activity was minimal; our needs were basic and we provided them for ourselves. Great civilizations rose and fell based on their military/security apparatus more than their facility in production or trade. The vast majority of people built their own houses, wove their own clothes, and grew their own food.
Then, a few hundred years ago, capitalism sparked. Sturdier ships, steam engines, emerging cities, division of labor, financial markets, fossil fuels, mass production, military industrial complex, hyper-specialization, increased affluence. Each economic advance created new problems: pubic health crises, mass immigration, income inequality. Yet, for most of us, life improved. Sustained economic growth led to longer, healthier lives.
But that trajectory is stalling. Escalating consumption, far beyond adequate food, shelter, and security, delivers diminishing satisfaction. So much stuff enables autonomy, and weakens our human connections. The collateral damage of our excess—accelerating climate change and environmental degradation—creates new health hazards and ecological imbalance that undermine the very foundation of human existence.
Economic activity is fueled by the incentives we supply, and those incentives yield specific consequences. When cheap land and gasoline promote building 3,000 square foot houses on two-acre lots, the consequences are strained water supplies, sprawl development, and increased carbon emissions. If our incentives promote 1400 square foot net-zero townhouses on public transit lines, the global consequences are more benign.
In order to evolve from a society premised on economic growth to one centered on economic balance, we must shift incentives to better achieve sustainable consequences. This will entail revising our social safety net, our tax strategies, and our regulatory structure (to be addressed in later posts). But there’s one fundamental shift in economic thought that underlies all other changes. We need to start assessing real cost to the natural resources we use.
All economic activity includes three principle attributes: raw materials, human manipulation, and capital. When we build a car, we determine the cost of the steel, glass, and vinyl based on the cost of extraction; design, fabrication and assembly are manipulation costs, and capital keeps everything greased. What we don’t do, at present, is ascribe a value to the actual materials themselves. As a result, we underestimate the consequences of everything we take from the earth. Ore, sand, and oil are plentiful, but they are not infinite. When we remove them, we tinker with the natural order. We create repercussions among fellow creatures and in our environment that are woefully underacccounted in our current economy. Acknowledging and ascribing value to every component of our planet, in place, will help offset the pollution, erosion, and destruction we create when we extract materials. It will incentivize us to be more prudent in how we use them.
How we will do this will be difficult, and imperfect. But as a basic first step toward a world in economic balance, we need to start.