Can continued economic growth be sustained

On Tuesday I attended the Environment and Election Forum for the Herbert Electorate hosted by the North Queensland Conservation Council at the Townsville Yacht Club. Herbert is the electorate that takes in most of Townsville.  In attendance at the Forum were the sitting LNP member Ewen Jones, ALP candidate Cathy O’Toole, Greens candidate Wendy Tubman, Colin Dwyer from Katter’s Australia Party, Michael Punshon from Family First, and Aaron Raffin from the Glen Lazarus team.

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Prior to the Forum I thought about what question I would like to ask. Given the “jobs and growth” mantra coming especially from the two major parties, I decided I would ask a question about economic growth. Economic Growth has been a goal of governments since the 1940s and certainly in the 50s and 60s was responsible for improvements in the quality of life of many Australians.

Today after 70 years of striving for economic growth, the picture is not so rosy.

Sustained population growth together with increased economic activity has left our agricultural areas barren and eroded, many previously pristine areas degraded, and our coastlines badly damaged. Another result of continued economic growth over these years has been increased inequality.

In 1989-90 the total salary of a CEO, including base pay and bonuses, was 18 times that of an average worker; today it is 63 times higher. Translated into weekly earnings, an average CEO is paid $65,000 a week, or around $11,000 more than the annual wage of an average worker. With just five weeks’ pay, a CEO could buy outright the modest home that most people spend their entire working lives paying off.  These figures are taken from a study by Dr John Shields of Sydney University published in the Journal of Australian Political Economy. His paper reviews the movement in the CEO salaries paid by 51 corporations that are members of the Business Council of Australia (BCA).

Back in 1989-90, the 90%+ of the population who had jobs could buy more consumer goods(“stuff”) than their parents could even dream of. Today those in jobs still have access to even more “stuff” but the numbers of unemployed have increased. And both major parties keep telling us that what we need is more “growth”. Can’t help but think of the quote sometimes attributed to Albert Einstein “The definition of insanity is doing the same thing over and over again, but expecting different results”.

My question to the panel – I asked given the evidence – did they think it might be time to move away from an economy based on growth and make sustainability and equality the goal. The first to respond was Colin Dwyer who is an economist and seemed genuinely surprised by the question. He went on for a while about economic theory and concluded by saying that we need even more growth if we are to address inequality and world poverty. Perhaps Colin needs to spend more time pondering Einstein’s definition of insanity.

Sitting member Ewen Jones said that we need growth to support our ageing population. Cathy O’Toole agreed that GDP was not the best measure of the health of a community. She suggested that it was time that we look for other indicators (Gross National Happiness perhaps?). Wendy Tubman of the Greens said that central to Greens policies was the notion that continued growth is no longer sustainable if the earth is to have any future.

Back in 1972 the Club of Rome published the   “Limits to Growth” a study which modelled the consequences of continued growth in a world with finite resources by examining three different scenarios. The chilling prediction from that report was the “business as usual scenario” would result in the collapse of the global system in the second half of the 21st century.

In 2008 Graham Turner at the Commonwealth Scientific and Industrial Research Organisation (CSIRO) published a paper called “A Comparison of `The Limits to Growth` with Thirty Years of Reality”. In this paper Turner examined the past thirty years of reality with the predictions made in 1972 and found that changes in industrial production, food production and pollution are all in line with the ‘business as usual’ scenario modelled in the original study. Other recent studies have agreed – unless major changes are made to the current global economic system we are facing a disastrous collapse of that system in 50-60 years.

That may not concern those of us enjoying the second half of life but what of our children and children’s children.

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About peterhanley1

Peter Hanley has lived in North Queensland for more than 30 years. His interests include human rights, social justice, sustainability and community development. True North explores issues in these areas.
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One Response to Can continued economic growth be sustained

  1. mcgrathtsv says:

    Perhaps the most ‘chilling’, is the last sentence; indeed what is the future for our following generations? All leaders, along with the general population need to seriously consider this point; do we actually care about the future of our offspring? Approaching my sixth decade, this is a question I often ponder. Well expressed Peter!

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