The year is 1906. With the Conservatives failing to implement social reforms, people were desperate for change. Life under the Conservative government had significantly worsened – Booth’s study found that at least 30% of London’s population was living in poverty. Therefore, the British electorate responded with a landslide Liberal victory. But what sort of change would the New Liberal government bring?
The New Liberal government recognised that the only way to move the country forward was to embrace radical change. Thus, New Liberalism was born. It was a philosophy which for the first time recognised that the state could have a positive role, acting as a safety net for the most vulnerable. New Liberalism laid the foundations for one of our country’s proudest achievements: the welfare state. Free school meals in 1906, National Insurance in 1911 – these welfare reforms were only possible thanks to New Liberalism.
Liberalism laid the foundations for a new paradigm before, and it is now time for Liberalism to do so again. Climate change is the biggest issue that humanity has ever faced, and such a pressing issue requires a radical response. Just as New Liberals realised that classical liberalism was failing them, we must realise that neoliberalism is failing us. If neoliberalism had the answer, then why is inequality the highest it has been in 30 years, why are ecosystems being pushed to collapse, and why are global temperatures still rising? The only way we can progress is if we recognise the obvious – neoliberalism is dead. It must be stopped dead in its tracks and consigned to history.
Why is neoliberalism dead? Our obsession with GDP growth has completely blinded us to neoliberalism’s disastrous impacts on both society and the planet. GDP growth was a useful metric when economies were growing consistently by 3% in the 1950s, but not anymore. Sustained growth is much harder to achieve, because as societies become more complex, so do the innovations they require. Each innovation demands the use of more resources and energy, which in turn causes greater stress on Earth’s systems. This increasing pressure is slowly tipping the balance from stability and security towards chaos and suffering.
GDP growth also ignores the positive innovations that fall outside the sum of an economy’s goods and services, while actively promoting activities which clearly cause our societies harm. If we saw growth as politicians do today, as only being positive to society, then pollution and war can be seen as acceptable, even though they cause GDP growth. Is this really the reflection of the ambitions of a liberal society?
Not only is neoliberalism dead, but so too is the neoclassical economics that founded it. Neoclassical economics mistakenly externalises the cost of production, and some proponents of growth argue that “green growth” is possible. However, this is not physically possible. The economy is a system that relies on the resources of the biosphere to function and operates within Earth’s biosphere – which is an open system for energy but a closed system for matter. This means that although Earth receives continuous energy from the sun, the material resources the economy depends on are finite and cannot be replenished within human timescales. The Second Law of Thermodynamics tells us that every energy transformation increases entropy as the system becomes more complex, meaning some energy becomes unavailable to do useful work. As a result, the economy inevitably produces waste energy, which currently manifests as pollution causing harm to our environment. Therefore, while technological innovations can improve efficiency and reduce some harmful impacts to the environment, absolute decoupling goes against physical laws and resource limits.
Most outrageously, the unaccounted debts of our current consumption will be forever chained to our young people. Maintaining the neoliberal status quo and saddling more debt onto young people is not liberalism, nor is it climate leadership – it is a crushing denial of their hopes, dreams and aspirations.
It is essential to look beyond economic growth as a measure for societal progress and move towards a new post-growth economic paradigm. There are many individuals who are pioneering post-growth alternatives: from Jo Swinson with wellbeing economics, to Tim Jackson with ecological economics, as well as Kate Raworth’s research into doughnut economics, all which are forward-thinking alternatives fit for the 21st Century.
Therefore, it is time for liberals to present a radical shift again. Not a revolutionary change like de-growth advocates may propose, there is still a place for markets to positively impact society. However, it is crucial that markets recognise the environmental costs of their actions with strong government legislation.
We need a new “New Liberalism” – an ecological liberalism where individuals can be free within planetary boundaries. We are living on borrowed time – the freedoms we enjoy today are slowly ticking away. The choice is clear: secure our future now, or our freedoms erode at the hands of the shrinking biosphere.
* Rodrigo is a Liberal Democrat party member and a Young Liberal.
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20 Comments
> Each innovation demands the use of more resources and energy
No.
Each innovation requires more engineering effort, and probably complexity. But often will result in a reduction of inputs per unit of output (KPI). This is most visibly in electronic technology, but also in other areas. Essentially we need to work out what life outputs we want and for inventions that produce that using fewer resources. There are millions of technical people who can do the work, it is just that at present their managers are tasked with increasing the dividends to plutocrats. There are more technical resources now than at any other time in history. Why are we told we are facing a new Dark Age?
If you dont like GDP growth you must love Brexit !
The reality is we live in a society with huge extrs demands on our resources – an ageing population, developments in healthcare costing more and more not to mention that every Lib Dem Confernce passes a swathe of motions requiring extra public spending.
Without GDP growth our society will get steadily poorer.
Zero growth but a rising population means falling GDP per head. It also implies rising unemployment or rising underemployment.
With these policies, I suspect our rivals will be offering to deliver our election leaflets for us…
To be accurate, free school meals were not a Liberal government achievement. They were first introduced and funded by Bradford City Council on the initiative of Fred Jowett, a local Bradford councillor and Labour MP, and Jonathan Priestley (father of the writer J.B. Priestley) the Headteacher of an elementary school in Bradford.
What the Campbell Bannerman government did was to pass a permissive bill enabling local councils to fund school meals if they so wished. The government did not provide any finance so, to use a phrase don’t let’s over egg the pudding.
Rodrigo
This has a lot of merit to it, not least because the world does not have finite resources to keep the pretence of GDP Growth, in its present form, going forever.
What we must now do is take many of these ideas forward in order to develop a policy prospectus that is fully costed and can stand up to scrutiny.
Liberal Democrats are at their best when they are radical and that is what is now needed to counter Farage on the one hand, and a Corbyn/Polanski Alliance on the other.
Hi @MikePeters, firstly thanks for the comment! Yes, it is true that technological developments have meant that things have become more efficient, and that as technology has developed it has reduced the amount of resources needed per new product (which is also known as relative decoupling – many economies have been successful in decoupling in this way from CO2 emissions). However, there is a bigger picture which is crucially missing.
As technologies become cheaper and more accessible, it causes the demand for these products to surge, which inevitably leads to the total resource use increasing, because of increasing consumption. While we use fewer resources per unit, we often end up using more units overall. In turn, this is not sustainable as it will overshoot planetary boundaries. To be clear, we already have the technology we need to be able to transition to a much greener economy anyway, however the political will is greatly lacking as the issue seems too distant to be urgent, despite the severity of the situation we are faced with. As uncomfortable as it may be, it is only political and systemic change which is needed to ensure that the biosphere remains stable.
GDP growth by design is to promote endless consumption – and the costs of that consumption are only starting to unravel in the shrinking biosphere. In my article, I explain why absolute decoupling is incredibly unlikely using thermodynamics and systems thinking. I am by no means an expert, but I respect the science, and I understand the severity of the situation that we face, and the current toolkit that economics gives us is not enough to tackle any of these new problems we face in the 21st century.
Lastly, this is not a message that we are going towards a “dark age” – this is rather a message of hope. It clearly recognises the problems we face, with many scientists agreeing that planetary boundaries are being overshot, and that it is our current modus operandi which is causing these problems. I am just the messenger who is trying to push for the post-growth policies we need so that not just young people, but all generations don’t have to suffer through the absolute agony and suffering that comes with a shrinking biosphere.
Hi @PeterChambers, firstly thanks for the comment! Yes, it is true that technological developments have meant that things have become more efficient, and that as technology has developed it has reduced the amount of resources needed per new product (which is also known as relative decoupling – many economies have been successful in decoupling in this way from CO2 emissions). However, there is a bigger picture which is crucially missing.
As technologies become cheaper and more accessible, it causes the demand for these products to surge, which inevitably leads to the total resource use increasing, because of increasing consumption. While we use fewer resources per unit, we often end up using more units overall. In turn, this is not sustainable as it will overshoot planetary boundaries. To be clear, we already have the technology we need to be able to transition to a much greener economy anyway, however the political will is greatly lacking as the issue seems too distant to be urgent, despite the severity of the situation we are faced with. As uncomfortable as it may be, it is only political and systemic change which is needed to ensure that the biosphere remains stable.
GDP growth by design is to promote endless consumption – and the costs of that consumption are only starting to unravel in the shrinking biosphere. In my article, I explain why absolute decoupling is incredibly unlikely using thermodynamics and systems thinking. I am by no means an expert, but I respect the science, and I understand the severity of the situation that we face, and the current toolkit that economics gives us is not enough to tackle any of these new problems we face in the 21st century.
Lastly, this is not a message that we are going towards a “dark age” – this is rather a message of hope. It clearly recognises the problems we face, with many scientists agreeing that planetary boundaries are being overshot, and that it is our current modus operandi which is causing these problems. I am just the messenger who is trying to push for the post-growth policies we need so that not just young people, but all generations don’t have to suffer through the absolute agony and suffering that comes with a shrinking biosphere.
Hi @SimonMcGrath – thanks also for your comment! I just want to clarify that critiquing GDP growth is certainly not a prerequisite for supporting Brexit. I do not support Brexit, it was an absolute disaster for our country for many reasons. I strongly believe that the EU is a force for good, especially with our current geopolitical situation. Is the EU absolutely perfect? No, but it is starting to look towards these ideas of post-growth, which I believe is positive.
I completely understand that an aging population and its subsequent healthcare costs means much greater public spending, however there are many things which are incestived by GDP growth that will greatly increase this cost: from increasing pollution by expanding fossil fuel use, to privatising services which increases inequality. A new post-growth economic paradigm which incorporates wellbeing and ecological stability is essential in ensuring that this can change.
As to how it can be funded, we can distribute money more fairly to ensure that the right amount of money goes into the government to fund public services. Currently the top 1% are not paying anywhere near their fair share, and that is wrong. To be clear, this is not about “socialism” – this is about having a pragmatic response to the challenges we face. If it means that we have to step outside of our comfort zone, so be it. The dire consequences of a shrinking biosphere are so great that breaking some rules will be more than acceptable, and if you deny these consequences, you are denying climate science.
Hi @DavidRaw – thank you for the clarification! Unfortunately, the extent of my knowledge of the period of the early 1900s is only my A-Level AQA specification! I was aware that the law passed for Local Authorities was permissive, but I was not aware that the Liberal government did not provide funding for it, so my apologies. My reason for introducing it was to try and compare the shift from classical liberalism to new liberalism, to the current shift that we need from neoliberalism to a post-growth economic paradigm. I hope that makes sense – thanks for reading, I hope it was interesting!
Hey @MikePeters, thanks for commenting! You are correct in your comment about zero growth and falling GDP per head, however that is assuming that GDP is the only meaningful way for us to measure societal progress, and as discussed in my article, is greatly flawed. You make an important point about unemployment, however in a post-growth economy this can be tackled by having working hours distributed more fairly, shifting investment into labour-intensive and low carbon sectors such as care, and jobs being reframed from obsession with productivity, extraction and consumption towards creativity and repair. These are not utopian fantasies, but rather exciting new developments as part of the pragmatic and realistic transformations needed to have an economy fit for the 21st Century.
Nice to see article discussing the issues raised, but I’m afraid the science in this article is wrong. To add to Peter Chambers’ comment: There’s nothing in the laws of physics that prevents ‘green growth’. The 2nd Law of Thermodynamics applies only to a closed system – and the Earth is not a closed system, in particular because of the energy it receives from the sun. There’s nothing in principle that prevents continuing growth powered by solar energy that doesn’t cause significant global warming/other environmental harm – it’s just that we haven’t yet developed sufficient technology, and in some cases the incentives to do so are lacking. We can and should be looking to continue to grow GDP in ways that are carbon neutral and more ‘green’.
Hi @Simon R – thanks for commenting! In my article, I say that earth is a closed system for matter (materials and such), and that it is an open system for energy, including solar energy. Even if GDP growth can be powered by solar energy, the processes which the economy uses to make products require the use of matter. Matter does not leave earth’s system due to gravity, which means that apart from meteorite strikes, the earth is generally considered a closed system for matter. Therefore, processes which use matter to make a new product as part of the economy follow the 2nd law of thermodynamics. Due to this, from the production process, there will be exergy (useful energy i.e the product), as well as anergy (energy unable to be converted to useful work) – with the anergy being the pollution to the environment. Therefore, the economy cannot absolutely decouple from its environmental impact. Although relative decoupling can occur and has been successful, absolute decoupling cannot be achieved and is not physically possible as I state in my article, therefore absolute green growth is not possible. Although relative green growth can occur, it is not occurring anywhere near fast enough, and the rebound effects from growth making things more accessible by its nature causes greater overall consumption, which means that more resources are consumed – causing planetary boundaries to be overshot. I am no expert, but I hope this makes sense!
Rodrigo, re: a closed matter planetary system – taking your argument as true, can we not overcome this by venturing beyond our planet – mining asteroids, off world manufacturing etc?
Overall, while you articulate some good points about the limitations of measures like GDP, I do not agree with your conclusion. Sustainable economic growth is possible (and desirable) for the next 1000 years+ . I agree it is not the default but that is where I would like to see the Lib Dem’s lean into and differentiate ourselves politically.
Thanks @Simon R for the comment. Yes more can be done within the Laws of Thermodynamics, or indeed the more complete Statistical Mechanics. And the UK is in the top 5 in the world making some effort, thanks to Milliband, Huhne, and Davey. The electricity used to type this comes from a solar array that also cooked my bacon sandwich at lunch. Technological problems are overcome every year.
However I would note that the main problems are political not technical. First the fossil fuel lobby has immense amounts of money for a rearguard action. They stand to lose billions of dollars in the short term and their accounting discounts the long term planetary cost. A small fraction of this will buy any election that can be won with publicity. So many political entrepreneurs want to make a living doing this stuff, not make donations. Read Chris Wylie’s memoir for fun details.
Another big factor is the high status and romance of high energy consumption. F1, revenge travel by jet after Covid, fast ocean cruises, and motorway lighting at 3 AM.
Do we want this “because we are worth it”?
@Rodrigo: I understand you are trying to reason by considering the Earth as a closed system for matter, but that is not how the 2nd Law of Thermodynamics works. The Earth can and does freely exchange energy with the rest of the Universe – therefore it is an open system full stop, and there is no requirement for the Earth’s entropy to always increase. In practice, what it means is that any degradation of matter caused by human activities could in theory be reversed within the laws of thermodynamics by using the solar energy the Earth receives from the sun. Green growth really is possible – at least to the extent that there are no laws of physics that prevent it.
Also, ‘anergy’ would normally manifest as heat, not as pollution. It does not necessarily pollute the environment.
You are correct that if things become cheaper due to technology improvements, people tend to buy and use more of those things, and that can cancel out energy efficiencies. That is a problem of economics, not of science and is in principle completely solvable – for example by taxing things that cause environmental damage to limit demand.
We have already lived in a post-growth Britain since the Great Recession, and the result has been disastrous to our society and politics. When life is a zero-sum game, people don’t act liberally; they jealously conserve what they have, distrust the state and society at large, and seek to take what little marginalised groups have.
A society where every economic interaction is a zero-sum contest is one in which right-wing populism thrives.
I was a Young Liberal in the 1980s and this was exactly what we debated back then as well. For me personally the book “Small is Beautiful” by Fritz Schumaker was a great inspiration.
Actually Rodrigo we don’t need to switch to post growth we need to shift to degrowth as we have to find a way to live well whilst not destroying the planet. The trouble with Farage, Trump, Orban et al is they don’t think there’s a problem and that climate change is a hoax. Convincing people to live with less to save the planet is a big sell and we’re not even trying to do it.
Hi again @Simon R, my concern doesn’t lie with physics – I was just trying to explain why I believe absolute decoupling is incredibly unlikely. Our current economic system encourages more and more consumerism and consumption, with no thoughts being given to the environmental cost – when will it stop? The choice is simple: Do we stop when the biosphere imposes its limits on us, or do we stop beforehand and evade the worst of the consequences of a shrinking biosphere, ensuring our freedom within planetary boundaries? As Kenneth Boulding said “Anyone who believes that exponential growth can go on forever in a finite world is either a madman or an economist”.
Even if, as you argue, it were possible – it is not happening anywhere near quickly enough. It’s currently the 3rd heatwave we’ve had in as many weeks, and we are incredibly close to surpassing Earth’s tipping points. Leading climate scientists say that we only have around 3 years to 1.5 degrees celsius, with “rapid” emissions cuts needed. This is urgent, we can’t wait around for technology to solve our problems. Although it may be true that the UK economy has managed to relatively decouple its emissions, these emissions are still there. It is probably inevitable now that we will blast past 1.5 degrees of warming, and when we do – it will be the betrayal of a generation. Even with net zero by 2050, which is nowhere near enough, and not what we should be aiming for, that means around 2.0 degrees of warming – which will have dire consequences for the most vulnerable in our world.
That is not liberalism.
When we have the option to choose something different, we must, because what we are doing now is clearly not working fast enough. We need something new, a new approach, simply tinkering with the status quo is not good enough. The eyes of not just future generations, but the young people of today are on us. For them, what we need to do is lead the way as a party, to a new economic system that works for people, and the planet. At the very least, that requires us to recognise a new post-growth economic paradigm.
For those of us who care about humanity’s future there are few bright spots. One is the advance of AI and social media that enables mankind to act quickly and decisively if it so desires. We must therefore cling onto our democracy in the hope that the resilience and innnate goodnes that we all possess will reach sufficient people in time.