Leading adviser's warning to ministers: the problem's not bankers, it's society
By Rob Edwards, Environment Editor
G20 - A PLEA FOR CHANGE
THE ECONOMIC system is broken, and attempts by governments to fix it by kick-starting growth and consumerism are "delusional" and "pathological", the Westminster and Holyrood governments will be warned by their own advisers this week.
A ground-breaking report by the leading environmental advisers to First Minister Alex Salmond and Prime Minister Gordon Brown will deliver a damning verdict on capitalism and demand a radical shift to a fairer, more sustainable society.
The report has been compiled by the Sustainable Development Commission (SDC), a group of 19 experts chaired by Jonathon Porritt which advises Salmond and Brown on environmental issues. Entitled Prosperity without Growth?, it is to be published tomorrow.
The pursuit of economic growth, founded on the increasing consumption of material goods, has failed to bring social justice, prosperity or happiness, the report says.
"The narrow pursuit of growth represents a horrible distortion of the common good and of underlying human values," the report concludes. "The market was not undone by rogue individuals or the turning of a blind eye by incompetent regulators. It was undone by growth itself."
The report presents a fundamental challenge to the economic policies being pursued in London and Edinburgh, raising questions about some of the basic tenets of modern capitalism. We are living in an "age of irresponsibility", it says.
"Questioning growth is deemed to be the act of lunatics, idealists and revolutionaries, but question it we must," says Tim Jackson, a professor at Surrey University and the SDC's leading economics expert.
"The myth of growth has failed us. It has failed, spectacularly, in its own terms, to provide economic stability and secure people's livelihoods."
According to the report, inequality is higher in industrialised nations than it was 20 years ago. The rich have got richer, but the poor have remained poor, with wealth only trickling to a "lucky few".
The environmental consequences have been "disastrous", the SDC says. In the last 25 years the global economy has doubled, leaving 60% of the world's natural ecosystems degraded and threatening "catastrophic" climate change.
The economy is "fundamentally broken", argues Jackson. "A return to business as usual is not an option. Prosperity for the few founded on ecological destruction and persistent social injustice is no foundation for a civilised society."
A society founded on the "relentless pursuit of novelty" undermines social well-being. "The economy itself is dependent on consumption growth for its very survival," the report says. Market economics have to be questioned and consumerism has to be reversed, the report urges.
It recommends 12 steps to a sustainable economy, such as tackling inequality, changing work patterns and respecting ecological limits.
In Scotland the SDC is urging ministers to invest in infrastructure that creates low-carbon communities. "Rather than build more roads for more cars, the government must make it easier to use rail and buses, cycle or walk," it says.
Jan Bebbington, the SDC's vice-chair and an accounting professor at St Andrews University, said: "The Scottish government must stop thinking the pursuit of economic growth, no matter how sustainable the growth is labelled, is going to make Scotland flourish almost as a matter of course."
But the Scottish Government stressed its purpose was "sustainable economic growth". A spokesman added: "To suggest we stop trying to grow our economy, when we can see the effects of the recession around Scotland, is completely wrong."
Sustainability was a "fundamental aspect" of economic policy, he argued. "That's why we have set out actions to create thousands of jobs in sustainable industries that harness Scotland's natural advantages."
The Confederation of British Industry in Scotland also gave the report's findings a cool reception. "The dismal picture portrayed by the SDC is not one we recognise," said CBI Scotland's David Lonsdale.
But Green MSP, Patrick Harvie said: "We have long argued for a vision of the economy which puts human values above shareholder value, and I'm delighted that the SDC is saying the same thing."