Ha-Joon Chang is one of my favourite economists, and I appreciate his critique of modern capitalism and how it serves the poor. But one of my criticisms, which I mentioned in my review of his last book, is that there is little room for the environment in Chang’s writing. They might occasionally get a passing mention, but environmental issues aren’t part of his main analysis. In an age of climate injustice, that rather undermines his ambitions for a more equitable global economy.
He also failed to distinguish, as most economists do, between growth in rich countries and poor countries. With an environmental perspective, growth in already developed countries is by no means an unalloyed good. As long as growth is coupled to rising energy and resource use, which it is, further growth locks us into a destabilised climate, depleted resources, debt and a degraded environment. All of which makes growth in poorer countries almost impossible.
So in reading Chang’s new book, Economics: The User’s Guide, I was curious to see whether he had caught up with the postgrowth perspective at all. I’m pleased to report that he has – or at least, he’s certainly read Tim Jackson’s Prosperity Without Growth.
Here, Chang argues that environmental constraints need to be taken “extremely seriously”. Climate change and the over-drawing of renewable resources means that “we are going to run out of planet, so to speak, if we do not find ways to control the impacts of our economic activities on the environment.”
Of course, developing countries still need to grow. Growth is needed to raise living standards, and to pay for climate change adaptation too. But what of developed countries? “Given that they are already consuming the vast bulk of the world’s resources and they have far fewer needs to increase consumption, the rich countries need to reduce their consumption, if we are to dampen the extent of climate change.”
That doesn’t necessarily mean falling quality of life though – by addressing inequality, overall consumption could fall while allowing those who don’t have enough to have more. Then there’s the need to consume differently, rather than less – measuring our quality of life more through the culture that we create together than the quantity of our private possessions.
Chang draws a helpful distinction between economic growth and economic development, a theme I may have to return to in more detail in a separate post. Economic development is about productive capacity, and Chang suggests rich countries could continue to develop – they should just take the rewards in shorter working hours rather than in increased consumption. Not all production is created equal either. We want to grow production of those goods and services that help us fix environmental problems, including renewable energy.
It’s great to find these ideas in Chang’s book, ensuring they’re not left out of his introduction to economics. The bad news is that they occupy 8 pages of a 500 page book, so it’s not exactly central. The idea that developed countries like Britain should hold back on consumption and reduce working hours – that’s a huge political and cultural change. If Chang is serious, then it needs to be elaborated. That view of sustainability is almost entirely absent from our politics, and it won’t happen by itself.
Now that Ha-Joon Chang has opened the door to true sustainable development, here’s hoping he steps right through and writes his next book about it.