Less is more - the move to a saner happier economy

Don’t be afraid of the recession, says Andrew Simms , it may just be the lucky break we need to get our heads around a more sane economy and a better quality of life

Has Diana died again? You’d think so. Newspapers report a nation facing a future that is ‘bleak’, ‘weak’ and full of ‘woe’ and ‘fear’. In language more familiar to the augurs of ancient Rome, the Daily Telegraph warns that the ‘omens are not good’.

But no, this dismal rain of words falls on the economics pages of the press, triggered by news that Britain’s legions of shopaholics aren’t shopping quite as much as they are expected to. Looking back at the last festive splurge and seasonal sales, we still spent more than ever before – just not as much more as was hoped for.

It caused a disturbance in the consumer space-time continuum, a ripple big enough for Britain’s leading retailers to report dark visions of the ‘R’ word in the economy’s crystal ball. It was the unwanted guest at materialism’s party – recession.

The great fear about recession is that, left uncorrected, it can tip over into a full-blown depression. You might ask, ‘What’s the difference?’ Former US President Harry Truman, who first worked as a senator in the long shadow of the 1929 Wall Street crash, said, ‘It’s a recession when your neighbour loses his job; it’s a depression when you lose yours.’ Actually there’s no fully agreed definition of either. Customarily they involve respectively shorter and longer periods of low-to-negative economic growth and coincide with bad things, such as raised unemployment. That’s why commentators get nervous if people stop buying things.

Nothing, though, is straightforward. An odd assortment of sectors supposedly does well during recessions. The pub trade, gambling, artistic endeavour, religion and, more predictably, pawn shops and the debt trade all thrive on hard times. Economic pundits, of course, have a field day.

But what will happen to the small-but-growing ‘ethical economy’? The fates of the organic food sector and fair trade depend, to a large extent, on the prices they charge compared to non-organic and unfairly traded items. In particular, remove the subsidies, obvious and hidden, enjoyed by industrial agriculture and trade built on exploitative labour, and there’s no real reason why the ethical economy should fare worse during a recession than any other sector. It could, even, be boosted.

The history of the co-operative movement, rooted in attempts to escape the grim poverty of the Industrial Revolution, is evidence that real economic hardship can foster precisely the kind of ingenuity and enterprise needed to engineer an economy with greater social justice as an explicit objective.

For now, though, behind all the doom-laden stories, there is an assumption that the woes of the chainstores are also ours. If we aren’t out shopping to realise ourselves fully as human beings then we must be mad, bad or depressed (in fact, the arcane difference between calamity and euphoria in the marketplace example above is a variation in ‘sales growth’ of only 2.2 per cent).

The conflation of a growing economy with rising wellbeing is hard-wired, both in conventional economic theory and in the minds of policy-makers. To question it remains an economic heresy, punishable by excommunication from the company of the professional commentariat. But times have changed, and it is wrong.

In the UK alone, while our economy has grown continuously over the last few decades, study after study shows that our sense of satisfaction with life has flatlined. Similar trends can be found in a wide variety of other industrialised countries. More interesting still is the snapshot of what lies behind different lifestyles found in Britain and across Europe. In a unique survey carried out by the New Economics Foundation (NEF), more than 35,000 people reported on both their general, everyday levels of consumption and their levels of wellbeing.

Consumption varied widely. At the high end of the scale, lifestyles, if copied around the world, would need the resources of around seven planets like Earth – so-called ‘sevenplanet living’ – impossible and disastrous even to try. But there were people who also reported very low-impact, ‘one-planet living’.

The staggering finding, however, came when consumption was compared to different levels of life satisfaction. There was virtually no connection at all. You were just as likely to have a good life if you lived using thrift, as if your ecological footprint stomped around the globe all year courtesy of a 747 jumbo jet, or left its tread courtesy of the wheels of a luxury Bentley.

This is because at Britain’s stage of economic development, when most of our basic material needs are met, other things determine the rise or fall of wellbeing, such as the quality of family life and our friendships, and the opportunities we have to do things that give us lasting satisfaction, such as learning, being engaged in creative pastimes and meaningful work.

More than this, there is now mounting evidence that getting caught on the hedonic treadmill, chasing an ever bigger house or smarter car, will undermine our wellbeing. A surprisingly diverse group of people – although mostly excluding economists – is now making that connection.

Imagine overhearing someone talking about the value of ‘natural beauty’, ‘happiness’ and the threat of environmental crises, then decrying the ‘confused economic concept of “competitiveness”’, before finally spelling out the need to ‘dethrone growth’ as the principle objective of the economy.

Who would you think was talking? Your first guess is unlikely to be a former head of the famously hard-nosed Confederation of British Industry. But this is Adair Turner, former CBI head and now the chair of the Government’s new climate change committee, formed to oversee the achievement of reductions in greenhouse gas emissions laid down in a new law. He was writing in a new book entitled Do Good Lives Have to Cost the Earth?

In the same pages, Conservative party leader David Cameron writes on the 40th anniversary of a classic speech by Robert Kennedy, in which Kennedy attacked an obsession with economic growth because it measures ‘everything except that which makes life worthwhile’. In which case, as ‘recession’ is merely a description of a particular rate of growth – not anything more – it needn’t necessarily be a bad thing.

Cameron proposes a different measure to growth called General Wellbeing, but goes further to endorse other new indicators, such as NEF’s Happy Planet Index. As a more radical departure from old ways of measuring, the index assesses the efficiency with which scarce natural resources are converted into wellbeing, measured in terms of relative levels of lifeexpectancy and satisfaction.

With new metrics like this, writes Cameron, we are able ‘to show that people can live long and happy lives without having to consume the Earth’s resources at an inordinate rate.’

As a way of assessing the success or failure of policy, it’s almost impossible to exaggerate the scale of creative departure that using the new index would represent. We would, for example, wave goodbye to the ritual sacrifice on the altar of growth and economic competitiveness of every necessary environmental and social policy. For once, a deaf ear could be turned to the firms and investors that threaten to relocate overseas at the merest whisper of a new people-or-planet-friendly proposal.

For a wealthy country such as the UK, improving on the index – which would mean that we are becoming more environmentally efficient at delivering long, happy lives – would happen, or not, independently of whether shopping helped the economy grow.

We would distinguish between bad, ‘uneconomic growth’, which is represented by building more roads and airports, and good development, seen, for example, in an expanding, decentralised renewable energy sector that creates countless thousands of ‘green-collar’ jobs, helping the environment and contributing to real security.

In Britain today, old economics tells us to work ever longer hours, to increase earnings and contribute to the nation’s economic growth. For many people, however, this is more likely to erode our satisfaction with life, because it gets in the way of things that really matter. Philosopher AC Grayling puts the case. He writes that being in hock to ciphers of the good life, such as celebrity lifestyles or faux-rural retreats – what he calls advertising’s ‘mirror of dreams’ – is an obstacle to the real good life. The latter is found much closer to home.

Ecologist columnist, Tom Hodgkinson, Britain’s hardest-working advocate for the cause of idleness, advises that to tackle climate change, possibly the best thing we could do is nothing at all. Not in the sense of keeping on the way we are, but literally to stop. No more shopping, no more upgrading consumer durables. The answer, he writes, is to ‘decommodify our fun... the less time one spends in the lonely aisles of Tesco, the more pleasure comes into your life’. This could also help insulate against the effects of recession.

Less, it seems, really does mean more. But we mustn’t underestimate the problem. We face a financial crisis driven by debt that has allowed us to live beyond our means, and a connected climate crisis driven by the resulting over-consumption. And, we have created a global role-model for developing countries that is crushingly unsustainable.

The poorest people currently lose whichever way they turn. The share of financial benefits from global economic growth actually reaching the poorest people shrank dramatically between the 1980s and 1990s. Nearly half the world’s population live on less than $2 per day.

For all the rhetoric that growth is needed to reduce poverty, over the course of those two decades, from every $100 worth of growth, that group took home only some $4.

Perversely, it means that for the poor to get very slightly less poor, the rich have to get very much richer. It now takes around $166 worth of global growth to generate a single dollar of poverty reduction for people living below $1 a day. Already this has taken humanity’s ecological footprint across the threshold whereby Earth’s ecosystems can safely replace what is taken and absorb our wastes without going haywire. And, when global warming hits, the poorest pay first and worst.

More prosaic problems at home, too, are acute. Bankruptcies and home repossessions are both predicted to rise sharply in 2008, and mortgage defaults by as much as 50 per cent, all pushed by a squeeze on credit and likely interest rate trends.

Wanting to have their cake and eat it, economic commentators are perfectly capable of warning consumers with one breath that spending too much could push them over the edge, while, in another, warning that if they don’t spend enough it could push the economy over the edge.

They seem to prefer confusion (which generates the need for pundits) to addressing the fundamental question: for how long can a consumer society defy environmental gravity? How will we kick the over-consumption habit without going cold turkey?

The irony is that we should never have got to this point. The founding economic texts of both political left and right saw through the false promise of conspicuous consumption right from the start. Adam Smith mocked lovers of luxury who ‘walk about loaded with a multitude of baubles... some of which may sometimes be of some little use, but all of which might at all times be very well spared, and of which the whole utility is certainly not worth the fatigue of bearing the burden.’

Just under a century later, Marx laid bare the very human dissatisfaction that seemed to drive the spiral of demand for both baubles and palaces, suggesting, ‘A house may be large or small; as long as the neighbouring houses are equally small, it satisfies all social requirement for a dwelling. But let a palace arise beside the little house, and it shrinks the house to a hut.’

So, with a recession creeping, the threat of a housing crisis, negative equity and overstretched credit cards hanging over us, it may be a good time for a rethink.

Wellbeing research shows what really delivers lasting life-satisfaction. Typically, this includes putting time into building good friendships and family relationships, a positive outlook on life, a sense of community, meaningful work with purpose, having rights and personal freedoms, and less individualistic belief systems that put value on ‘doing good’ in the wider world.

Reassuringly, cheap and low-carbon good times are everywhere to be had. Remember your legs – take them for a walk in green space – you’ll come back fitter, happier and more in touch with the world around you. The same is true with gardening. Then there used to be this satisfying thing people did, known as ‘conversation.’ In the Second World War, officials warned ‘talk is cheap’; in a recession that’s a good thing. The more we talk together the better we get at improving relationships. We can party and play more, while consuming less. We can set up clubs focused on things we find fascinate us – whether a supper or book club, or a parakeet-appreciation society. If those things wear thin, try again with something else. Projects give us direction and meaning to life.

Our misdirected search for the good life has been a little like Lewis Carroll’s epic nonsense-poem The Hunting of the Snark, once described as ‘the impossible voyage of an improbable crew to find an inconceivable creature’. In it, the baker disappeared (that’ll be the influence of supermarkets) and the banker went mad (that’ll be the credit, or rather ‘debt’ crisis).

On a postcard on my colleague’s desk is a summary of the wisdom of Bo Derek: ‘Whoever said money can’t buy happiness simply didn’t know where to go shopping’. The only place we have to go shopping, though, is planet Earth, and if we leave all its shelves and storehouses empty and denuded then we have a problem.

Impassable ecological obstacles lie on the path down which we chase shadows of overconsumption in order to deliver our wellbeing. Recession is an invitation to rethink old assumptions. The massively good news is that another way is not only possible, but also, as AC Grayling writes, better, richer and more enduring. Whisper it, but it seems the good times can be green after all.

Andrew Simms is policy director of the New Economics Foundation (NEF) and co-editor with Joe Smith of Do Good Lives Have to Cost the Earth? (Constable, £7.99). The book includes contributions from Philip Pullman, Kevin McCloud, Hugh Fearnley-Whittingstall, Oliver James, AC Grayling, John Bird, David Cameron, Rosie Boycott, Hilary Benn, Wayne Hemmingway, Tom Hodgkinson and many more

This article first appeared in the Ecologist April 2008

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