Editor’s note: This commentary is by Will Patten, who is a former executive with Ben & Jerry’s Homemade and past executive director of Vermont Businesses for Social Responsibility. He and his wife now own the Hinesburgh Public House in Hinesburg.
[J]ust 20 years ago, when I was charged with the health and growth of a national chain of ice cream parlors, we adopted a marketing goal that went like this: “More and more people eating more and more ice cream more and more often.” Continuous economic growth. It made sense at the time.
Economic growth is what capitalism is all about. According to Adam Smith in Wealth of Nations, “That part of a man’s stock which he expects to afford him revenue is called his capital.” With the Industrial Revolution, unfettered capitalists amassed great revenues and capitalism was proven a very efficient strategy for converting the world’s natural resources to stunning wealth.
Unfortunately capitalism has been so efficient that it has consumed the earth’s natural resources much faster than they can be replenished and maintained. The exhaustion of cheap oil, forests, fish, clean water and arable soils has made constant economic growth impossible.
We now live in resource-restricted times. Abundant natural resources and abundant labor – natural and human capital – are now scarce. The global economy is the process by which money frantically searches the world for remaining pockets of both.
The new reality is a no-growth economy. Political leaders must stop promising that they will get the economy growing again and start preparing us all for a new day.
Across the lifespan of mankind, capitalism — and the concept of constant growth — are just a couple of days of serious over-indulgence. The inevitable hangover looms large.
The marketplace will continue to reward innovation and hard work but it has failed as a means of distributing the proceeds. The American middle class was created from the abundance of the post-WWII era when education was free for many, jobs were plentiful and wages afforded a good life. Today, college degrees and hard work do not assure access to the middle class. A better income distribution system is needed.
Many believe that government regulation, not resource restriction, is the major impediment to constant economic growth. But “casino capitalism” only worked for the few. It is more likely that the lack of consistent regulation hastened the depletion of resources and increased government regulation will be required to allocate what is left.
Growth services debt. Without growth, we face decades of loan losses. Our current student debt is an impending financial crisis. Credit card debt is another. Buying things we don’t need with money we don’t have is not going to work anymore. We need to reboot our value system.
Technology is a marvelous tool, moving money and ideas around the world at the speed of light. But artificial intelligence creates artificial wealth. Despite the loss of natural and human capital, the world is awash in financial capital. Equities, bonds, mortgage securities, default swaps. “The Big Short” by Michael Lewis explains how ephemeral this artificial wealth really is.
Across the lifespan of mankind, capitalism — and the concept of constant growth — are just a couple of days of serious over-indulgence. The inevitable hangover looms large.
Vermont has always been a place where we don’t get rich; we just get by. We can serve the country well as a demonstration project for the no-growth economy. Let’s stop talking about growth and start working on economic vitality for all.
