Quick Disclaimer

The following is a transcript of recorded content. Please note, these transcripts are not always perfect and may contain typos. If you notice any major mistakes, please feel free to report them by opening a Technical Support ticket under the Help menu at the top of the screen.

Full Transcript

Chris: Welcome everyone to this Peak Prosperity podcast. It’s October 10, 2017. I am your host Chris Martenson. Well, the world is in deep trouble. Well, actually, I suppose the world itself is just fine but humans, maybe not so much. Now why do I say that? Because of our systemic and collective addition to growth; economic growth particularly. That growth is destroying ecosystems. It’s burning through nonrenewable resources, and really cannot continue as it did in years and decades past. And when I say the word growth, you know I'm really talking about exponential growth: sneaky, powerful, deceptive exponential growth. This is the most important and least talked about and possibly least understand concept of our times. By becoming aware of it you can do many important things in your life, such as predict the future and alter your actions and your behaviors to become a part of the solution. Steady three percent GDP growth each year? That’s exponential. Four percent more cars sold each quarter. That’s exponential. Five percent increase in exports this month. Also exponential. Anything growing by some percentage over time is growing exponentially.

But we live on a finite planet, and that right there is where our story takes us today. To talk with us about this today as a guest, I’m personally very excited to finally have on the program – Professor Tim Jackson is a top sustainability advisor for the UK government and he is professor of sustainable development at the University of Surrey and Director of CUSP. He was for seven years economics commissioner on the UK Sustainable Development Commission where his work culminated in the publication of “Prosperity Without Growth: Economics for a Finite Planet.” Originally a report to the UK government, the work was subsequently translated into 17 languages worldwide. Tim is a full member of the Club of Rome. In addition to all this, he’s an award-winning playwright with numerous radio writing credits for the BBC. Welcome, Professor Jackson.

Tim: Pleased to be with you.

Chris: May I call you Tim?

Tim: You may. You may indeed.

Chris: Well, you heard my intro, Tim. In your words, what’s the big problem with exponential, economic and monetary systems on a finite planet? How do you summarize this for people if you have a short amount of time?

Tim: Well, I think I summarize it by saying that, as with Kenneth Boulding, that anyone thinks that exponential growth can go on forever on a finite planet, either you're a madman or an economist. And there are lots of visual tricks to see what exponential growth means. But those very steep lines that rise very sharply as we approach the 21^st century and show us that we are exceeding our carrying capacity and in all sorts of ways are quite compelling. And I think people actually feel this to some extent, but this idea of having more and more, and having more and more stuff going through the system is somehow unsustainable, and not just in environmental ways, but something also even in social ways. And it’s that challenge, really, it’s that challenge of the irresistible force meets the immovable object. And this hugely increasing idea of what prosperity consists of in terms of exponential growth and the fact that the planets not getting any bigger, the ecosystems are all under lots of stress, the pressures that human society puts on our environment is increasingly obvious. And it’s a conversation that you can have with quite young citizens of the planet, with kids almost, and they will get it immediately because it’s a sort of inevitability about something getting bigger and bigger when there’s no more room to play.

Chris: Well, it seems a very simple concept to grasp and, in fact, you’ve pointed to something I’ve noticed, which is sometimes the younger the person the easier it is to communicate, indicating that this, it’s not an intellectual challenge, it’s just basic math really. Gaining traction of this topic has been a difficult, to say the least. I would say what The Club of Rome illustrated in a set of models was some very serious ideas that really should have caused, I think, a lot of very careful thinking. My experiences that trying to educate and illuminate on this topic, this idea of limits, it feels like rolling a boulder up a hill sometimes. That’s been my experience. What’s yours been?

Tim: It was very interesting after the report was first published because it was a report written for the UK government, for the Prime Minister actually, with the commission reporting formally to the Prime Minister of the UK. And it reported at a fairly sensitive time because of that time, after the financial crisis, the Prime Minister had, in fact, invited the G20 leaders, it was the British turn to be leading the G20 meeting. And he invited the G20 leaders to London the same week that we launched the report, as it happened. And the whole aim of that conversation amongst the G20 leaders just after the crisis was how could we kick start growth. So you could imagine, actually, that a report from one of the government's agents advises saying maybe we should be questioning growth was probably not what the government wanted to hear at that point in time. And, if fact, they wanted to hear it so little that the report almost died that week. It got virtually no press whatsoever. There were some quite fierce reactions from our departmental sponsors, I would say.

And it was the weirdest launch of a report that I have ever encountered in my professional life, where you put all this work in, actually you think it’s pretty good work, and you are aware, of course, that you're treading on some political toes, but you hope you’ve done all your homework. You’ve included all the government departments in your pre-release consultations. They’ve all turned up at meetings. They’ve seen the slide deck, they’ve all had a chance to comment of things, and yet we were not prepared for the degree of anxiety around that report from the government. And we were certainly not prepared to find that nothing happened initially. There was nothing. There was very little response to it whatsoever.

And then, the weird thing, I suppose, was that very slowly after that it began to pick up, a kind of online presence, almost went viral at a certain point, had this interest from publishers. And then these invitations that started flowing in. And what was extraordinary about that to me was that although I was aware that I was tackling a kind of taboo subject, what I wasn’t aware was how many other people out there were interested in talking about that subject. So it is, as you say, extremely difficult in certain circles to even ask the question, but it was also fascinating that I had invitations from investment banks, from venture capital funds, from literary societies, from women’s groups, from industrial companies, from groups of scientists who for forty or fifty years have been thinking about these very same issues. And an almost humbling response in a way that I had somehow put my finger on the pulse of a conversation that was just waiting to be had. And that’s, I would say, over the intervening years, has been my predominant experience, that’s there’s more and more interest in having that conversation.

Chris: I have a similar experience. I put together something called the Crash Course, which was probably the hardest work I’ve done in my life, and I’ve got a PhD. I really bowed in and had to understand economics and I wedded that to energy and also the environmental concerns, and put it at a high-level synthesis thing, not creating anything new, but just creating dots, something that people could understand it. And it should have been a disaster, Tim. Some guy speaking over powerpoint slides for three hours is awful, but it caught on. But also very humbling for me. People spent unbelievable amounts of time translating it all into multiple languages and carrying the message.

And I have the same experience which is that – I call it open door close door. So in public I find that people who are heads of companies or politicians, they have one sort of reaction to it, and then you close the door and I get the weirdest questions from people. They say things like, so should I start a garden and what kind of chicken should I get? So they're thinking about this as if it might go very badly in business as usual. But their public face is still business as usual. Is that tide turning do you think that the business as usual is maybe on its heels a little bit in this conversation?

Tim” I think business as usual is on its heel for a very specific reason which is the idea of growth as we had come to expect it is increasingly seen as being difficult to achieve. In other words, those exponential growth rates appear, in the advanced economies at least, to be declining very specifically. And that’s an issue which is not about environmental limits, it’s not about results constraints, it’s actually about the economic model itself. And I think that’s the one factor that has changed dramatically in the years since the first report was published in the last seven-year since the crisis. And the fact that actually that at this point in time the new normal is a place that may just not have that exponential growth in it. And even quite well established, very well established mainstream, conventional economists are now beginning to recognize they have to rethink all of our assumptions about that normal idea of economic growth.

That puts the ideas of economic growth and the politics of economic growth much more on the back foot, and much more interest in the conversation that you and I would like to have about growth perhaps for other reasons. But interestingly, perhaps with even more pressure now to begin to dismantle that taboo and to say actually what is the economy of tomorrow going to look like? What are its foundations? How do we build it without reference to this idea that its continually expanding because it just may not be anymore?

Chris: Again, a fairly simple math idea to convey, but oh, so entranced. I'm intrigued by the title you came up with. I think it’s perfect. “Prosperity Without Growth.” And I think that in a lot of people minds growth and prosperity are conflated ideas – if you want one you need the other. How did you go about detangling those two ideas?

Tim: That was really one of the first starting points. It came, I think, from a variety of different directions. One of them was reading work on poverty actually from the 1970s. And a real understanding that, of course, at one level poverty is about income. But actually much worse things happen on the back of not having income. And they include respect and motivation and fulfillment and your access to being a decent person in a decent society. And those things go missing very fast for people when they're not there. Sometimes even when they do have an income. And it became clear, in a way, looking at it through this lens of poverty that the same thing was true of prosperity, that actually it’s not and never was just about income.

It’s a fairly modern conception to align prosperity with the idea of increasing income, and that actually what matters is the love of our families and the strength of our friendships and the integrity of our communities, our health, our wellbeing, our sense of meaning and purpose, of having a place in life, of participating in society. And you can have one without the other. You can have a society which has got this exponential growth built into it and yet is neglecting these fundamental aspects of prosperity.

And so, it immediately becomes a not altogether, absolutely, categorically answered question, but a really interesting question – could you decouple this idea of prosperity from the idea of exponential growth? Could you build a society which had these qualities that really mattered to people and in which their incomes were not necessarily increasing exponentially as we have come to expect them to? And that’s a real, genuine inquiry. That’s a point where you have to look at evidence, where you have to look at case study, where you have to explore the philosophy of what human well-being consists in and which also, of course, you have to think about the hard economics of delivering that vision of prosperity.

Chris: It almost sounds like there’s a – in the growth phase of an organism you go through from birth to this rapid growth phase – you hit adulthood. And so our culture is a species, we went very hard charging through all the resources and now we're getting through adulthood and we have to figure out how we’re going to be in this story. And the old story doesn’t work anymore. We’re not teenagers; we can’t just consume endless pizzas and it’s all going to work out. We’re going to have to keep our room clean, we’re going to have to eat well. There’s a maturation going on here.

The resistance to that idea of really living within limits seems to really rub some people the wrong way. And before we circle back to prosperity, because that’s the central theme of what I want to get to here, I want to turn to those Limits to Growth models and all of that, because there’s been lots and lots of criticism and debate about the Limits to Growth model, their outputs. Not all have been fair. I get accused of basically being some form of Malthusian person as a show stopper all the time. But in 2016 yourself and Robin Webster wrote a review of the Limits to Growth debate titled “Limits Revisited.” Before we get back to the prosperity side of this, can you set the stage for those who may be unfamiliar with the Limits to Growth? Tell us what really was it and how it came to be.

Tim: Yeah. It was a fascinating piece of work and partly because at the center of it doesn’t set a set of Malthusian projections about the world coming to an end by a certain date. At the center of it sits just a very profound insight about the nature of resource consumption in a finite world. And it is basically this: that as you consume more resources, as you grow up in your very nice analogy and move beyond the teenage years, what happens first is that the quality of the available resources begins to decline because you’ve taken the low hanging fruit, because you’ve taken all those rich seams already and you’ve mined them. It’s gone. It’s blown. And now we’re looking at a world in which, actually, the quality of resources is beginning to decline. And when that happens you have to dedicate more of the available resource to getting out what’s left because it’s harder work because there’s not such rich seams, because it isn’t such low hanging fruit. And so you have to essentially dedicate resources that you might have otherwise put into health and education and community and building and production, you have to dedicate that energy just to getting out the resources to make all those other things possible. And that’s a downward spiral.

That’s a place where you're beginning to actually have less capability to waste stuff, less capability to produce stuff and potentially less capability to be prosperous. And that was a very simple message of that report. It was a fundamental, underlying dynamic of the resource based economy. And yes, it did make some predictions for around about the middle of this century. Lots of people thought all the predictions were about the end of the millennium, but that was never the case actually. And some of those predictions appear to be coming true. And almost all of the evidence suggests that the original work done by the Limits to Growth people was fairly accurate in terms of the level of resource consumption and pollution that would come about. And so we have, in 1972, this report that nobody wanted, really, nobody wanted to hear that message. And everybody from pop scientists to journalists to the presidents of the most important countries in the world got up in public to say this is rubbish. We don’t believe in limits. There are no limits to human ingenuity was Ronald Reagan’s response to the Limits to Growth report, for example.

And while that may be true that there are no limits to human ingenuity, that’s not the same thing as saying there are no limits to our resource basis. That was a fundamental point. It actually hasn’t been refuted in the way that many people believe it has been refuted. And it’s still a really important message. It’s principle message, I think, is to say that limits rather than being constraints on human activity are an invitation to opportunity as Windward Berry [ph] describes it. A way of saying, actually, there’s a different kind of world, there’s a different kind model, there’s a different kind of economy and there’s different way of thinking about wellbeing and prosperity. And we’re being invited, actually, into that conversation because we are really beginning to face those issues in terms of resource quality that the Limits to Growth people said. It was a really important report, a point in human history, actually, where we should have realized something that we hadn’t realized up until that point. And that something is as relevant today as it was in 1972.

Chris: Really astounding, especially considering the technology they probably had computer wise in terms of both software and hardware. I'm sure my smartphone would handily beat it in many dimensions.

Tim: A wonderful story about Jay Forrester writing basically, or sketching, the World3 model, or the basis of the World3 model which is that they did the calculations on the back on an envelope on a journey home from the Club of Rome meeting in 1968/69. And that was the extend – it wasn’t’ the entire extent because they did have some computing power. But they didn’t have the data that we have today, they didn’t have the geological observation that we have today. They didn’t have the sheer computing power that we have access to in any way whatsoever. And so it was an extraordinary piece of work, really, visionary.

Chris: Now, this comes up against an idea, a concept, of planetary boundaries. Could you help us understand that?

Tim: The point about the Limits to Growth work, I suppose, in those early days that it mainly focused on resource quality. It did say a little bit about pollution, because the flip side of using and abusing resources is that you spread them out into the environment and they have environmental impact. Carbon is the most obvious one. And interestingly, carbon was mentioned in the Limits to Growth report, but only in passing as a local pollutant because we hadn’t, at that point, gotten down to the fact that we have the potential to create much more global damage through climate change through carbon emissions.

And towards the end of the last millennium, it began to be abundantly clear that those environmental issues were going to be driving constraints on human society as much, perhaps more than, the constraints around resources, and this idea that there are planetary boundaries was put together actually by a group of scientists based around the Stockholm Resilience Institute led by Roman Yokstrum. And they set out, for the first time in the beginning of this millennium, to define, actually, what those boundaries might be. And what’s fascinating, actually, about their work when they published it, almost exactly the same time as “Property Without Grace” was published, funnily enough, was that climate change, although it is an incredibly important planetary boundary, is not the only place where we’re stepping out of the mark and that actually issues biodiversity, the loss of species, the eutrophication of water sources, and the proliferation of genetic materials. These kinds of issues are places where we are already transcending the safe operating space of the planet. We’re already creating too much impact on the planet. And that’s a real force to think differently about our economies.

Chris: It’s such a devilishly tricky thing. There was a wonderful piece of work that came out from an environmental reporter in The Denver Post talking about the Ogallala aquifer system. And all the farmers there across this six-state system that are impacted by this aquifer, they know what the problems are, and they can clearly see that it has a multi-hundred-year recharge rate, and that they're drawing it down way too fast. And they all get that. And the farmers even know that if they continue to this that the very farms that they consider their chief assets are going to be ruined. And we’re doing this to basically grow corn in a desert. Well, high plains. It’s a very arid area, maybe not a full desert. But it doesn’t make sense. Everybody knows it doesn’t make sense, and yet we persist and we continue to do this. Speaking, I think, to the idea that changing entrenched practices, even if they’ve only been there for a couple of generations, is really difficult to do.

Tim: It is difficult to do. But on the other hand, those practices do change and have changed. And we’re in a constant cultural flux, in a sense. Our ideas about society, our ideas about the good life, and the interactions of those ideas with the technologies that we’re constantly developing is not a sort of static picture. It’s never a static picture. It’s always changing. And actually, that’s both a worrying feature, a worrying factor, and also a very encouraging one. It’s worrying because actually we’ve changed some of our cultural norms quite deliberately to build into society the idea of having more, the idea of consumerism. And that happened particularly after the great recession in the 1930s, the Great Depression in the 1930s, after the Second World War. This attempt to build a consumer society, we very deliberately encouraging us to be almost proficut consumers, to want more and more because we knew that the economy that we built needed to have demand in it. It needed to have more and more people demanding more and more things if we were to be able to go on employing people to produce them.

And so it was at the heart of our economy, with not just technology, it was a set of ideas about who we are and a set of ideas about who we should be that have dominated our conception of the economy and our conception of humanity over the last fifty or sixty years. And that was a shift. That itself was a cultural shift, it was a shift in the cultural norms. And what we’re talking about here, I think, is actually saying, well, yes, that was a good-ish idea in the sense that it dug us out of the hole of the Great Depression and it put together a sort of social project after the second world war. And it saw us through perhaps to the last decades of the last millennium, but it is no longer the story of the 21^st century. It cannot be. And it’s not even a very good story about human well being because it turns out, in fact, that we’re not just veracious consumers and sometimes having more is worse for us. Having less is better. And those are the things that we have to try and find out now about ourselves or rediscover about ourselves in a world in which more and more is no longer an option.

Chris: Well, absolutely, the whole quantity versus quality discussion. And I’m an example of somebody who cut his living standard in half and doubled his quality of life. And it’s a message that I try to bring forward, that more is not better. And the data supports this. If we back up a few steps in my country, the United States, whether we’re looking at obesity rates or imprisonment rates or job place satisfaction scores or levels of depression, psychoactive drug use in children and teens alike, we can pretty much sum it up and say yeah, we could do better. This is not a story of really obvious happiness and contentment and fulfillment here. So those sorts of things are starting to sneak in. And generationally I’m noticing that’s really starting to sneak in as well with young people increasingly being, as usual, the revolutionaries who are saying, wait, wait, wait, wait. What am I buying into? I'm not sure about this. We can do better, and maybe this would serve me better.

So that’s a place where I have some hope in this and I do see those stories changing. My concern, Tim, is I don’t know if we’re going to have time. And I have a confession. I’m one of those oil people. I know we’ve been ridiculed, and there’s a whole marketing campaign in my country to suggest that anybody who ever believed in that was just a nut. But my data is what it is, and it shows that oil fields peak and then decline irrevocably and that we’re into the source rocks and that the return on energy invested for our most recent efforts are not as stellar as they were in the past, and all of that. Where you do stand on the whole peak oil issue at this point?

Tim: Well, I think you’d be in very good company, actually, with very serious commentators from very established positions. So, for example, a report last year to HSBC Bank which would absolutely agree with that although we’re not looking at the absolute depletion of oil fields, we certainly looking at the peak of many conventional oil fields. Many areas in which the exploration for new oil is slowing down, and questions of quality about the resources that are coming online that could bring back that peak oil argument much faster than we’ve come to expect to be likely. There was a lot of talk about it, of course, around about the time of the crisis and the price of oil peaked at $147 a barrel, which was almost inconceivable a decade before. But it peaked at that huge price during the crisis for a range of different reasons, not all of which were to do with underlying scarcity.

But the one thing that it told us was that when any kind of scarcity hits that kind of supply, the resource price implications are huge, massively disruptive. And to not take that into account, to rule that out on the basis of a short-term optimism euphoria about something like shale oil or the new alternative sources of oil is really, really shortsighted. It’s kind of like a business looking at the supply chain and saying well, it seems to be coming through at the moment, not user what it’ll be like next week, but we can probably find something else to create our product out of. And paying no attention at all to the fact that your supplies are saying, wait a minute, I'm not finding it that easy to get the raw materials anymore. Perhaps you should think about looking for another supplier. We don’t have another supply, we’re one planet Earth, this is it. And so it’s almost like to be responsible even as a society we must be taking those things seriously. And I think we could be hit by, not necessarily ultimate scarcity, but by scarcity related issues in our supply chains much faster than most conventional observers are saying.

Chris: My own back of the envelope calculations put us at about 2018 to 2020. Somewhere in there. And it’s just based on the fact there’s 1.2 missing trillion in upstream investment in oil and gas that didn’t happen. So the supply in the future that won’t be there. And Tim, the tightest data set I have in all of economics, which is often noisy data sets and correlation and causation stuff, it’s hard to tease apart, it’s just this one – is the advance in real GDP graphed against increase in total primary energy consumption. And it’s practically a perfect fit. And so you have that piece of data, right. And then you have this other piece of data that – models vary, but the one I tend to believe say that total energy output from fossil fuels peaks somewhere around 2030 – it’s a decade long topping process. That’s fine. But you look at the work of Ovlov Spittle who says, hey, we’ve done energy transitions in the past.

Two things – we’ve always gone from what we call a worse to a better energy source, wood to coal, that was magnificent, coals better. But those took forty or fifty years for even partial penetration, saying that energy transitions take time. So you put those three pieces of data together in my world and I say, wow, we’re topping out around 2030, but for our financial system to not fall apart it needs to keep growing exponentially and it needs energy to do that. Which means that from 2030 to 2050 we basically have to replace 100 percent of total peak output of fossil fuels by other means. Now I’m not going to tell us we can’t do it or anything like that, but I will say that I look at that data, Tim, and I see urgency. I’m like, wow, if we don’t want this to become possibly quite dire we’d have to take that pretty seriously. Something like the Apollo times the Manhattan Project times another whole number like a hundred. Like it’s has to be a point of serious thrust. Would you agree with that, and second do you see any on a policy front anywhere that comports with that outlook?

Tim: Well, we do see some of that sort of Apollo project type rhetoric. And I would call it rhetoric at the moment because it boldly sits on an idea that we can keep the existing economic system. We can keep the economic and financial system. We can keep the idea of economic growth, and we can just technologize our way out of it with some, as yet, unspecified or sometimes actually very precisely specified set of technologies which can save us. And this idea that technology can save us is probably the most prominent response to that question of time. And I’m looking at that and I'm thinking, the question is not about the technology, it’s about whether we can achieve that transition in this kind of society. And so I spend quite a lot of time in the book, in “Prosperity Without Grace”, looking at the kind of society that we have, the way that it’s build, the economic mechanism, the social psychology of it, the way that those two things actually combine forces in an almost potentially magical way if it’s all going well to ensure that we have more and more stuff. But actually when it begins to go wrong they stop us finding the solutions.

And I actually do agree with you. I do sympathize with this idea there’s not much time to solve these problems. But what worries me about that is it’s one of those rabbit in the headlight moments. There’s a tendency, actually, to react to those time-based projections with a sense of either apathy, oh, there’s nothing I can do about it, I’m not even going to try, or just despair or potentially just this haunting, paralyzation of the cornered beast not knowing what to do. I think for me it’s really important to avoid that. It’s really important to say you don’t know about time, we don’t know exactly when the shit is going to hit the fan, we don’t exactly know how long we’ve got left. And what we really need now is this process of reflection. These technologies are great, because are we really going to make this work in the kind of society that we have or do we have to thin