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:: Managing Without Growth: Slower by Design, Not Disaster

+ 11.12.2010 + What is managing without growth? And why manage without growth?

The historic origin of the word ‘manage’, according to dictionary definitions, is ‘to train a horse’, to guide a horse by the hand. Its meaning has come a long way since then. One of the other meanings, ‘to cope with’, fits better with the contents of this book. It is, in fact, a book on how to cope with low or no growth of a rich national economy.


It is not on the limits to growth of the global economy, in the tradition of the Meadows model. Rather, it is on the rationale for entertaining the idea that rich countries should manage without further growth in order to make room for the poorer countries where the case for further growth is much stronger.


Peter A. Victor feels embarrassed by the perception that even a “green” economy could be bigger than a “brown” one. And that’s why he steps outside the prevailing value system and invites the reader to follow him: “The main value that I want to call into question is the primacy that we in the rich countries give to economic growth as the over riding economic policy objective for government” (p. 1).


Sometimes, he says, this growth obsession comes dressed in other clothes such as ‘competitiveness’, ‘free trade’, or ‘labour productivity’. It is this policy objective against which all other proposals are being judged: Environmental policy must not be allowed to impede growth, and should even boost growth; education policy must train the students for work in the ‘new economy’; immigration policy must attract the most highly educated immigrants; support for the arts is based on its effectiveness. All these policies are judged against their contribution to economic growth. Victor challenges this prevailing view. Not with pleading for zero growth. Rather, that we should not bother with growth as a policy objective at all, or only as subsidiary to more specific objectives that have a clearer and more substantial relation to well-being.


He starts with defining economies as open systems, situated within the biosphere on which they depend. He then describes how economic growth emerged as the pre-eminent policy objective of governments, obscured occasionally by the newly fashionable language of ‘sustainable development’. In the following chapters, he examines three main lines of argument for why rich countries should start to manage without growth: information and prices, sources, sinks and ecosystem services as limits to further growth. Thus, having laid the groundwork, Victor goes on to explore what might be achieved in terms of employment, poverty elimination, environmental protection, and fiscal prudence in a no or low growth economy. He takes Canada as an example, for which he uses a modestly complex model based on standard economic theory and practice – the LowGrow model (available over the Internet:


In “LowGrow”, it is explicitly assumed that there are limits to material throughput and need for the protection of habitat; and implicitly it is assumed that lower growth is necessary and sufficient to reduce throughput and land use. The author believes that the real output from (the value of) a model like LowGrow, however, is not the graphs and data that come from the computer, but the insights we gain and the ideas we might develop for solving problems for ourselves and others.


The “LowGrow” model gives answers to the question whether the rich countries (again Canada as the example) could do better than to continue to pursue a path that looks less and less viable for the long term. The various scenarios suggest that regarding employment, poverty, leisure, greenhouse gases and ecological footprint, there is a coherent macro-economic configuration that is not predicated on the never-ending pursuit of growth. In the rich countries, economic growth should no longer be the dominating objective, and policies enhancing well-being that might reduce the rate of growth should not be discounted for that reason.


In the last chapter of the book, consideration is given to main public policies for managing without growth: from policies on population, environment, investment, consumption, to international trade. Here, Victor picks up the idea of an ‘environmental growth speed limit’ (proposed by Douglas E. Booth), but ends with what he thinks to be the ultimate argument for reconsidering the growth objective:

The rich countries can cope with low or no growth, but the case for economic growth in poor countries remains strong; and therefore, “it is imperative that rich countries deliberately, systematically, and thoughtfully slow down their rates of growth to leave room where the need for growth is greatest” (p. 223).

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