The Coffee Circle Papers: Paper 5 – Economic Growth: Who Needs It?

Many thanks to Catherine Murphy TD for donating this document to the Left Archive. The document has been posted as the specific chapters which can be found here. As noted previously:

This document [published on foot of a series of meetings] is unusual in respect of the Irish left in that it sought to challenge fairly directly the assumptions held by a political formation. That formation, Democratic Left, less than a decade old had recently left government after Fianna Fáil had won the 1997 General Election. It had also shed two seats from its complement of six TDs.

This document examines the economy and has a paper presented by Richard Douthwaite, author of ‘The Growth Illusion’ and Green Party candidate in the 1994 European Election and another by Rosheen Callender, economist with SIPTU and Special Advisor to Proinsias De Rossa when he was the Minister for Social Welfare. Eamon Gilmore facilitated the discussion.

Unfortunately a page or two is missing from the initial pages of the document and if anyone has them they would be much appreciated.

Callender argues that:

…my head now tells me firmly that this is not the way: that putting the brakes on economic growth, and on people’s demand for ‘non-essential’ goods and services, is not the answer.

It won’t feed people in poor countries; and it won’t give jobs, cars, central heating, holidays and decent pensions to people in Ireland. And if people want these things, which by and large, they do, who are we to say they shouldn’t have them or at least aspire to them? It doesn’t mean we should encourage rampant consumerism, or the often shocking levels of waste in societies such as America – quite the contrary. But it does mean recognising the material and other aspirations of all our fellow human beings, world-wide; and facilitating rather than obstructing the fulfilment of those aspirations. And it also means clearly identifying the downside of growth, the by-products that are socially, environmentally and morally unacceptable; and finding appropriate and effective ways of curbing and controlling them.

I believe that the task for socialists is to constantly find new ways of using economic growth and market forces to cure the ills that these powerful forces themselves create. We need to find new ways of taming and training the Tiger – whether Celtic or otherwise – and insisting that it feeds and treats all its cbs fairly. There’s no point thinking that shooting it down, o:r paralysing or emasculating it, will solve anything. Because the energy and dynamism that are needed to solve these problems are inherent in the beast itself: kill off the beast and you kill off a powerful dynamic for development and change.

And:

For me, socialism in the 21st century must be about beating them at their own game. Or more accurately, beating them with and within their own game. And of course, changing the rules of the game. Which means getting intensely involved. No more dropping out, or standing on the sidelines; no more denial, of the forces that are driving change. No more dreaming about stopping or slowing growth, without having the economic instruments or political power to do so.

It means understanding fully how markets work – and don’t work. Seeing the difference between useful, well-functioning markets and ineffective or dysfunctional markets. Distinguishing between goods and services which can and should be allocated by well-functioning markets, and those that cannot or should not be subject to market forces alone, and those that must be removed from the marketplacealtogether.

And:

In this paper I am arguing that by and large, growth is necessary and positive but needs to be very strictly monitored and controlled, in accordance with social criteria, i.e. criteria determined by the needs of society as a whole. Our real aim should be ‘social growth’, -shorthand for economic growth that serves truly social needs. And because I can’t possibly look at every aspect of the economy and judge it by those criteria, I want to look briefly at just three important social and economic issues that have not been tackled successfully, either through traditional right-wing, ‘free market’ approaches or traditional left-wing responses. I want to look at where we are on aspects of environmental policy, housing policy and incomes policy; and then to draw some definite conclusions about economic growth and why we need it -and need it to continue.

Douthwaite argues:

If any aspect of green economics makes the average person deeply unhappy, it is its claim that we have to halt economic growth. This is understandable. After all, who doesn’t find the idea of a higher income attractive? Moreover, most of us believe that economic growth is responsible for the comfortable lives the majority of people in industrialised countries enjoy today; and, for the minority who aren’t so fortunate, we find it heartening to be able to tell ourselves that the extra resources generated by the next few years’ expansion should bring them up to a reasonable level too, provided the gains are properly allocated.

This means that there’s no need for us to give up anything in order to make the poor better off – a wonderful notion, as it stops us feeling guilty about our affluent life­style. And as for the Third World, surely it’s obvious that growth is necessary to raise living conditions there too?

…

Unfortunately, the wrong sort of economic growth is the type we’ve largely been getting for at least twenty years. Why? Simply because if a largely unregulated market is left to decide which sectors of the economy are to expand and how they will do so, it’s impossible to ensure that ‘good growth’ comes about.

He posits:

What all this means is that we’ve no need to be against growth. We just have to be against the main type of growth taking place at present. If firms can produce a greater value of goods and services without:

• reducing the number of people they employ

• cutting wages and other employees benefits

• increasing the amount of energy and raw materials they use

• needing more transport services

• shifting the distribution of income in favour of the better off

• releasing genetically-engineered organisms into the environment

• patenting life-forms

• using technologies that make work less interesting and fulfilling

• increasing the amount of waste that goes to landfill or into the environment

• driving smaller firms out of business or damaging local economies

• allowing chemicals which are not quickly and harmlessly broken down into safe and stable constituents to leave their factories

• purchasing goods or services from parts of the world where p;ices are subsidised because environmental, social or working conditions are significantly inferior to those in the countries they are supplying

• increasing human, animal or plant exposure to nuclear and electro-magnetic radiation

• making production and supply systems less sustainable than they are already

• and several more conditions you’ll be able to think of yourself …

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