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The Great Transition – The End of Growth?

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New research suggests that the ongoing global economic crisis is symptomatic of a deeper crisis of industrial civilization’s relationship with nature. The continuation of the crisis, though, does not imply the end of the world – but rather is part of major phase shift to a new form of civilization that could either adapt to post-carbon reality and prosper, or crumble in denial.

We are on the verge of a major tipping point in the way civilization works. Even as so many global crises are accelerating, a range of interconnected systemic revolutions are converging in a way that could facilitate a transformation of the global economy from one that maximizes material accumulation for the few, to one that caters for the needs and well being of all.

That’s the conclusion of a major new book published as part of the ‘Routledge Studies in Ecological Economics’ series, The Great Transition, by Prof Mauro Bonaiuti, an economist at the University of Turin in Italy. Bonaiuti’s book applies the tools of complexity science to diagnose the real dynamic and implications of the global economic crisis that most visibly erupted in 2008.

That crisis, Bonaiuti argues, is not simply a part of the cyclical boom and bust process, but is a symptom of a longer “passage of civilization.” Advanced capitalist societies are in a “phase of declining returns” measured across the period after the Second World War, including GDP growth, energy return on investment (how much energy is put in compared to what we get out), manufacturing productivity, among others.

Fig1

Fig 1.  Bonaiuti’s graph of GDP growth rate in Europe from 1961 to 2011, illustrating a fluctuating but consistent long decline

Fig2

Fig 2.  Bonaiuti points out that Energy Return On Energy Investment (EROIE) is also declining for major fossil fuels

But compared to these declines, in the same period and on a global scale we have faced near exponential increases in energy consumption, public debt, population growth, greenhouse gas emissions, and species extinctions. For Bonaiuti, the declines we are seeing are a consequence of the “the interaction between limitations of a biophysical nature (the exhaustion of resources, global warming, etc.) and the increasing complexity of social structures (bureaucratisation, the reduction in the productivity of innovation and in the educational, health and productive systems, etc.).”

Fig3

Fig 3. Global population growth and energy consumption plotted in one graph (Source: The Oil Drum)

Fig4

Fig 4. Global rise in debt to GDP ratio from 2000 to 2013 (Source: The Telegraph)

Fig5

Fig. 5. Correlation between exponential increase in consumption, C02 emissions, species extinctions, and environmental degradation (Source: Skeptical Science)

The economic crisis is therefore not just about debt, or deregulation, or market volatility or whatever. Fundamentally, the crisis is due to the global economy’s ongoing breaching of the limits of the biosphere. Ironically, as Bonauiti points out, after a certain point as material accumulation measured by GDP continues, well-being and happiness have not only stopped growing, they are now also in decline as depression and other psychological ailments are proliferating – a phenomenon that mainstream economists are at a loss to explain.

But it begins to make sense when we re-frame the crisis as not simply an economic one, but as a “bio-economic” one, in which exponential material consumption is increasingly destabilizing the biosphere. This environmental ‘overshoot’ explains “the inability on the part of the capitalist system to continue to produce social well-being and to face the ecological question with any efficaciousness.”

Collapse? Or renewal! (or both…?)

Civilization is thus undergoing a huge, momentous ‘phase shift’ to a new era as the current form of global predatory capitalism crumbles beneath the weight of its own mounting unsustainability. As this process unfolds, it simultaneously opens up a range of scenarios for new forms of society, within which there is an opportunity for “a great transition towards new institutional forms” that could include greater “democratic self-government of communities and their territories.”

Despite the very real disruptions this phase shift entails, many of which have been explored in-depth at Motherboard (the unprecedented spate of global unrest being a major example),the Italian economist is cautiously optimistic about the potential long-term outcomes.

“When the framework changes, as the sciences of complexity teach us, there will be other forms of economic and social organisation more suited to the new situation,” said Bonaiuti. “In particular, in a context of global crisis, or even stagnant growth, cooperation among decentralized, smaller scale economic organisations, will offer greater chances of success. These organizations can lead the system towards conditions of ecological sustainability, more social equity and, by involving citizens and territories, even increase the level of democracy.”

Bonauiti uses the term ‘degrowth’ to describe this new framework – but degrowth does not simply mean no growth, or even negative growth. It actually entails a new science of ‘post-growth economics’ in which the obsession with measuring material accumulation as the prime signifier of economic health is jettisoned, in which it is recognized that endless growth on a finite planet is simply biophysically impossible, literally a violation of one of the most elementary laws of physics: conservation of energy, and relatedly entropy.

If Bonauiti is right, then we should expect to be seeing more and more signs of this changing framework, and with it, the emergence of potential new forms of economic and social organization that work far better than the old industrial paradigm we take for granted. And that’s exactly what’s happening.

In part 2, I will round up five major ‘revolutions’ that are developing now, which are already undermining the old paradigm, and paving the way for viable alternative approaches: the information revolution, the energy revolution, the food revolution, the finance revolution, and the ethical revolution. The big shifts constituted by these revolutions are developing disparately, tentatively, and often incoherently – but despite that, they are evolving inexorably, and in coming years will be increasingly difficult to contain and co-opt.

All of them involve an increasing dispersion of power to people and communities, away from traditional centralized hierarchies of control. As they accelerate and begin to interact, the opportunities for transition will also open up. That’s not to say any of this will happen in a simplistic, easy-peasy manner. Prof Bonauiti identifies four potential scenarios for the future, and one of them involves ‘collapse’, while another leads to ‘resilience’.

The old paradigm, and those who benefit from it the most, will also resist the most, and their resistance and disbelief in the reality of change – and the people’s response to it – will quite literally define the future of our species, and of the planet, in ways that will remain entirely unpredictable.

Degrowth 2014 blog



15 Comments on "The Great Transition – The End of Growth?"

  1. yellowcanoe on Mon, 22nd Dec 2014 3:01 pm 

    We’ve certainly reached the end of growth but I’m sure the politicians will keep searching for the magic button or lever that will return the economy to the high growth rate we had been accustomed to. Dealing with government debt and future unfunded liabilities would be extremely difficult in a world with zero or negative growth so the last thing they want to accept is that this is the new reality.

  2. J-Gav on Mon, 22nd Dec 2014 3:42 pm 

    Bonaiuti doesn’t come across as an idiot for me, which is already saying a lot in the present context.

    However, shifting from ‘old paradigms’ to ‘new paradigms’ is very far from depending exclusively on hubris-ridden, Earth-dwelling human beings.

    Whether we like it or not, the Sun (CMEs, Coronal Mass Ejections, or lack thereof) and changes on other planets in our solar system, as well as Galactic Cosmic Rays will also have their say. We do not control the universe.

  3. Perk Earl on Mon, 22nd Dec 2014 4:19 pm 

    Bonaiuti gets it right – he understands the quandary, but then he shifts into feel good ideas regarding ‘how to’ change into a new less consumptive mode that is slightly more localized. How utopian to think people will simply shift to a new mode like handing off a baton. That may sell books, but the situation as I see it is what we have now will need to completely collapse into anarchy, chaos, die off, to later shift to localized survival mode for the bottleneck survivors.

  4. J-Gav on Mon, 22nd Dec 2014 4:19 pm 

    By the way, the title of this article is no doubt taken from Karl Polanyi’s 1944 book, ‘The Great Transformation,’ a landmark study on the ways in which economics interacts with social and cultural biases, in case anybody’s interested.

  5. ghung on Mon, 22nd Dec 2014 4:53 pm 

    I’m going through a bit of an shutdown as far as getting through these articles without realizing they are dancing around the edges of a precipice. Maybe it’s just SAD (seasonal affective disorder) or something,, or staring into the abyss too long. Perhaps most of us have episodes when our defences go on holiday and reality oozes through.

    “The Apocalypse was staring us in the face all along as we drew illusionary lines in the sand for agreeable upper limits to global warming.

    The stark truth was that humans had irreparably harmed the delicate chemical equilibrium and homeostasis of Earth for tens of thousands of years.”

    Anyway, Happy Winter Solstice to all you solar apes. It’s up hill from here, at least in the northern hemisphere for the next six months.

  6. Kenz300 on Mon, 22nd Dec 2014 6:54 pm 

    “New research suggests that the ongoing global economic crisis is symptomatic of a deeper crisis of industrial civilization’s relationship with nature. The continuation of the crisis, though, does not imply the end of the world – but rather is part of major phase shift to a new form of civilization that could either adapt to post-carbon reality and prosper, or crumble in denial.”

    ————

    Climate Change is real…… we need to deal with the cause……… It is time to speed up the transition to safer, cleaner and cheaper (less damaging to the environment) alternative energy sources.

  7. Makati1 on Mon, 22nd Dec 2014 7:09 pm 

    The psychological “feel good” articles are in a race with the techies’ cornucopia topics. Both refuse to see beyond their narrow world into the real world where we act like mold in a Petri dish, living off of the contracting energy of oil.

    “Civilization is thus undergoing a huge, momentous ‘phase shift’ to a new era as the current form of global predatory capitalism crumbles beneath the weight of its own mounting unsustainability.” Nailed that one correctly.

    But I think the “dispersion” will ONLY happen AFTER the collapse when there are no options left. When the West and it’s wannabees are taken down to 3rd world levels and predatory Capitalism is dead. We will NOT do it voluntarily. “We,” meaning the majority, not the few of us who are stepping down the ladder voluntarily.

  8. J-Gav on Tue, 23rd Dec 2014 3:30 am 

    ghung – I think I know what you mean … too much time spent wrestling all these grizzlies can be mentally and spiritually exhausting – even downright toxic.

    So I join you in wishing all us apes here some peace of mind over the coming winter.

  9. Boat on Tue, 23rd Dec 2014 7:07 am 

    Maybe when “growth” disappears we will learn to accept it’s just change. Solar, wind, desalination plants, efficiency will be where the change comes from. The price tipping points just haven’t happened yet. No gloom, no doom just change. It will happen when alternative solutions costs less and you can make a buck driving the change. Capitalism works that way.

  10. Makati1 on Tue, 23rd Dec 2014 8:01 am 

    Capitalism is a dead man walking, Boat. And those “alternatives” all depend on oil to exist. But, you can ignore that and pretend. At best they will never provide more than a small fraction of the energy needed to run the world.

  11. Apneaman on Tue, 23rd Dec 2014 9:48 am 

    There is no such thing as green or alternative energy; they are merely fossil fuel extenders that require enormous amounts of highly destructive fossil fueled mining that create massive quantities of toxic waste. They may continue to grow in the short term, but we will never see them at scale. The EROEI is none too good. I wish it weren’t so, but that is why we are in a predicament as opposed to just having problems.

    Ozzie Zehner Responds to His Critics
    Expensive green technologies aren’t as clean as they seem

    http://spectrum.ieee.org/energy/renewables/ozzie-zehner-responds-to-his-critics

    The Myth of “Green Energy” (pod-cast)

    http://postcarbon.podomatic.com/entry/2013-08-15T12_25_00-07_00

    Authors@Google: Ozzie Zehner – Green Illusions (video)

    https://www.youtube.com/watch?v=v6uVnyjTb58

  12. Boat on Tue, 23rd Dec 2014 7:49 pm 

    Scale? Those who can afford it will be the scale.

  13. theedrich on Wed, 24th Dec 2014 2:35 am 

    Once again, the simple and elegant formulation of Joseph Tainter is confirmed:  diminishing returns are closing in on the globe.  Naturally, the Lefties with their genosuicidal hatred of the White race blame it all on evil rich and racist White men (who out of neurotic guilt actually fund the Left), while many on the political Right assert that there is a magic wand called free enterprise, government non-interference (albeit truckloads of taxpayer money are needed for their particular solutions), etc., which can save us all.  One is reminded of the obsession of our kin, the chimpanzees, with their own tribal conflicts, animals oblivious to any larger context.

    Again and again, objective measurements of various large-scale issues — human population growth, biospheric degradation, corruption and international crime of unprecedented proportions, military technological sophistication, emigration swamping recipient countries, and on and on — show up on graphs as curves rising or declining exponentially as they approach an asymptote.

    Anyone with a first- or second-year high school education knows that such curves are merely mathematical constructs that in the real world (outside of a black hole) can never reach the asymptote.  Natural processes are always — always — truncated by limits of some kind before they can climb very far.  So it is clear that the end is nigh for BAU — but complexity makes it impossible to tell just how nigh.

    In any case, it is futile to demand fairytale solutions such as the “Communism Lite” favored by the Left or by the religions that talk about lions lying down with lambs (especially if you fill their collection plates with money).  Or the tax-free technomagic and promissory materialism proclaimed by many on the Right.

    The future will be decided as it always has been:  by bloodshed, mass killings (Dresden, Hiroshima, Nagasaki, …), starvation and the like, as the combatants assert their own particular form of moral superiority.  History books are written by the winners, and the contesting leaders never forget that.

    The current frenzy of media- and politician-driven street demonstrations (allegedly over “police brutality”) in the U.S. reveal that many of the idle are starved for something — anything — that will give their lives meaning.  Some of them even gloat secretly when they learn of policemen or other supporters of civilization being murdered.  Psychologically, we are entering a stage of mass nihilism to prepare ourselves for the collapse.  Bloodbaths are such fun, especially when we can picture them as being conducted by those in white hats obliterating those in black hats, or vice versa.  We will finally be rid of the tedium of civilization and can go back to Olduvai Gorge where we really belong.

  14. Kenz300 on Wed, 24th Dec 2014 10:29 am 

    The transition to safer, cleaner and cheaper alternative energy sources continues.

    As the world wakes up to realize the damage of Climate Change and its costs the world will make more effort to deal with the cause rather than the impact of Climate Change.

    ——————

    Solar and Wind Provide 70 Percent of New US Generating Capacity in November 2014

    http://www.renewableenergyworld.com/rea/news/article/2014/12/solar-and-wind-provide-70-percent-of-new-us-generating-capacity-in-november-2014

    ——————–

    Despite Cheaper Gas, Public Transit Ridership Is Up, Trade Group Reports – NYTimes.com

    http://www.nytimes.com/2014/12/22/us/despite-cheaper-gas-public-transit-ridership-is-up-trade-group-reports.html?emc=edit_th_20141222&nl=todaysheadlines&nlid=21372621&_r=0

  15. Kenz300 on Wed, 24th Dec 2014 11:10 am 

    Alternative energy sources continue to grow around the world.

    “Chile has been astute in taking advantage of these cost trends to build its renewables sector. It is ensuring that costs come down through competition by staging a series of auctions for renewable power licenses — the latest just this past week, coinciding with the Chile-Australia Business Forum. No fewer than 17 projects were solicited, with costs coming down to US$80 per megawatt hour (a bid by Santiago Solar). In contrast new coal-fired power plants are estimated by the U.S. Energy Information Administration to cost on average US$95.”

    Chile’s Mines Set Hot Pace for Renewables — Australia Take Note

    http://www.renewableenergyworld.com/rea/news/article/2014/12/chiles-mines-set-hot-pace-on-renewables-australia-take-note

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