Jørgen Randers was co-author of the 1972 Limits To Growth, and an academic working on climate change, economics and future studies. He's the author of 2052: A Global Forecast for the Next 40 Years. I had breakfast with him on Friday with a small group and noted the following -
- When thinking about introducing a new system of wellbeing indicators, let's look at how GDP was introduced. Here's a short history in Foreign Policy magazine - essentially following this trajectory. 1930's GDP is born. 1940's institutions to measure it are created and it becomes standard. 1950's and 60's it forms monetary policy (and becomes base of all public policy).
- A large amount of GDP growth over the last 50 years comes from making the informal economy part of the formal economy - for example, women's work now having a dollar value as they enter the formal labour market. Others include - child/elderly care sector, domestic services etc.
- Neoclassical economics was designed to be mathematically solvable.
- Talk of Sustainable Development from the 1980's onwards sidetracked, mistakenly, the development of the conversation around Limits to Growth.
- The reason why the Limits to Growth conversation was possible in the 1970's was that the context was economic stagnation. It was clear things weren't working.
- Neoclassical Economics sees growth as an exogenous phenomenon due to advances in technology that leads to more productivity.
- Systems Dynamics sees growth as an endogenous phenomenon - due to changes in labour productivity, moving people into places and processes where they can produce more (including tech changes and centralisation).
- Neoclassical Economics holds economic growth to be nearly-religious principle because it provides 1) alleviation of poverty, 2) jobs and 3) pensions. These last two, however, are cultural creations. The wage economy is 200 years old. Jobs and pensions are reliant on today's form of democracy, capitalism and family structures. These can change and we should not hold on to them in the face of planetary signals that we have to change.