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What Will Drive Tomorrow’s Economy?

(reposted from Rabbi Nina Beth Cardin's blog, dated March 22, 2009)

Here is my dilemma:

Today's economic engine is fired by stuff. It is the production, manufacturing, and distribution of stuff that keeps our marketplace humming. That is what this economic downturn is reminding us. When we stop buying, the economy starts tanking. But to buy more stuff degrades the environment. More stuff equals more mining, more manufacturing, more housing, more land development, more stores, more driving, more shopping, more throwing away, more waste.

To save the economy, then, we have to buy more stuff. To buy more stuff, though, is to harm our world.

Which forces the question: How do we break this cycle? If we wish to save the environment, ourselves, and our finances, what will drive tomorrow's economy?

There seem to be two possible solutions: (1) either we should make stuff more-efficiently, ie, more sustainably; or (2) we should build an economy not based on stuff. Or both.

Few of us want to envision a future built on "less." We live in a world that imagines that more is more, more is better. Almost everyone, from the most developed lands to the least 'emerging markets,' want more. And how can we say no to that? It would be both mean-spirited and fruitless for us Americans, who are but 5% of the world's population and yet consume 25% of the world's resources, to tell others they cannot aspire to the quality of life that we live here.

In this vision, then, if world consumption grew to match US consumption, we would need multiple earths to meet that demand. Since we don't carry around extra earths in our pockets, we will have to think of something else.

One suggestion is to make more stuff than we do now in better ways. Efficiency and recycling, cradle-to-cradle manufacturing, is one suggested solution. In this view, we dare to imagine that no matter how many of us there are, and no matter how big our appetites, if we can devise cyclical, sustainable, waste-free ways of manufacturing and consuming, all will be well. Done right, there will be enough money and resources for all.

I do not doubt that efficiency is a critical and necessary piece of the puzzle. Doing more with less is almost always advisable. And we know it is achievable to some extent. Years ago, California instituted energy efficiency procedures. In response, over the past 30 years, its energy consumption per capita has plateaued, remaining flat at just under 8,000 kwh per person, while the US average per capita usage has soared to 12,000 kwh. At the same time, California's average per capita GDP has surpassed the US average. (source: California Energy Commission; via Congressman Bartlett's power point).

And yet the question remains: is this sufficient?

First, there is the challenge by some that GDP is not an appropriate measure of a country's health, indeed that a country's quality of life can be sinking even as the economic indicators are rising . (For more information on this, and the alternative measure of GPI, check out Redefining Progress at www.rprogress.org. I will write more on this in another entry.) To be fair, the cradle-to-cradle view leans more to GPI than GDP. Still, is that enough?

Second, no matter how efficiently we live, no matter how creatively we stretch the natural laws of the earth's carrying capacity, we will eventually bump up against its limits, and be constrained by them.

And third, even if there were no natural limits to expansion and growth, are there not spiritual limits? Don't we need to ask at some point: Are we there yet? Isn't this enough? One quick example: over the last 30 years, America's average house doubled in size. Doubled. What was acceptable and sufficient, and perhaps even comfortable thirty years ago, is small and tight and unacceptable today. Yet today's households – the number of people living in these houses – are smaller. One report says: "As household size has decreased, the floor area per capita has increased by more than a factor of 3, from 286 square feet per capita in 1950 to 847 square feet per capita in 2000."

Of course, this trend may be temporarily reversing itself during this recession, as family and friends move in with family and friends. But that may be just the point: larger houses, representing our overall bloated consumer habits, didn't make us happier. In fact, one could argue that because we pursued more than we needed, we ended up with less than we had. And as the AIG bonus fiasco has shown us, those at the very top of the mess have developed a tin ear to the ethics of money. Do we really want people running our economy who only or mostly think of money and short-term profit, regardless of risk, rectitude, righteousness or social justice?

According to some happiness or satisfaction surveys, even before this recent economic downturn, Americans were no happier than we were decades ago (and perhaps a little less so). Nor are we the most satisfied nation on the planet.

Spiritually, then, even if we could have ever more, without cease, is that what we would want? Is that what would make us happy? Is that what our purpose in life is?

Once we pass a threshold of comfort, health and viability, how much do we need? At what point do we say, enough?

Which takes us back to our question: what will fire the enginen of our economy if not stuff?
Can we build another model?

Can it be driven by the services we provide one another: teaching, nursing, protecting, research, companionship, repairing, fixing, developing, curing, entertaining, transporting, etc. instead of making unnecessary stuff?

It is reported that Americans spend $2.6 billion on wrapping paper a year. What if we put our gifts in reusable bags (saving both the earth and our money) and instead, took the savings and with it, renovated our schools, and created community gardens, retrofitted old factories into green manufacturers, and increased and improved our social work, police and home aide work force?

Stuff will continue to be made to the extent that all these services, and our needs, require it. But wouldn't it be better if we didn't make stuff just so we can make a living but rather made a living with a minimum of unnecessary stuff. A quote in the Baltimore Sun business section on Tuesday, March 17, page 10, talking about the hard times an up-scale clothing store is going through, reads: "You have to try and encourage a 'wants'-based shopper in America and give people a reason to go out and make that purchase."

Is that really what we want to do? Waste our money on things we don't need so it can go to who-knows-where, instead of using that same money to do all the things we as a society say we need to do but can't afford? At what price is such a "want-based" society? What does it cost us in children who go to bed hungry, families without support systems and an environment that continues to degrade?

What would a healthy society, and a healthy economy, not based on wants and stuff really look like? I would love to know the answer.

We need to see this recession as a game-changer. It is not just something we need to get through so we can return to the good old days. We need to use this crisis to see the underlying ills that brought it on and build a new, renewable, economic model, to heal the earth, protect our bodies and enrich our souls.

Then, all the pain we are all going through will have been worth it.

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