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- Herausgeber: John Wiley & Sons
- Kategorie: Geisteswissenschaft
- Sprache: Englisch
Long before the pandemic, economies across the world were in trouble, with growth slowing across the board. This downturn coincided with growing inequality and social exclusion. Rising political dissatisfaction with ruling elites fuelled the rise of populism. Add to this the alarming environmental emergency and few can deny we live in a time of multiple sustainability crises. While this conclusion can lead to despair, in this broad-ranging book Raphael Kaplinsky, a leading development policy analyst, argues that the future is not necessarily bleak. Interrogating the causes and nature of the systemic crises we are living through, he shows how the challenges which we now face mirror previous historical epochs, in which dominant 'techno-economic' paradigms flourish, mature and run into crisis. In each case, decisive action is required to move to a more economically and socially sustainable world. In our time, we are witnessing the exhaustion of the Mass Production paradigm. How we herald and manage the transition to the next paradigm - that of Information and Communications Technologies - will determine our capacity to build a more prosperous, equitable and environmentally sustainable world. This book sets out an integrated agenda for action by multiple stakeholders to achieve this end.
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Seitenzahl: 441
Veröffentlichungsjahr: 2021
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Table of Contents
Cover
Praise
Title Page
Copyright Page
Dedication
Figures
Tables
Preface
Acknowledgements
Notes
1 A Fork in the Road
2 The Rise and Fall of the Mass Production Economy
2.1 The Rise and Fall of Economic Growth, 1950–2018
2.2 What Accounts for the Fall in the Rate of Economic Growth?
Was it a consequence of a shortage of labour?
What about the contribution of investment to the growth slowdown?
And what about the productivity of investment?
2.3 Neo-liberalism and the Decline in Growth, Investment and Productivity
Free trade and the retreat from Industrial Policy – increasing imbalances between countries
The crisis in macroeconomic policy – matching demand with supply
Sustaining demand through Quantitative Easing
Growing financialization fuelled short-termism and dulled innovation
2.4 Can the Mass Production Paradigm Be Reinvigorated?
The Great Recession of 2007–2018 – the sticking plaster wears off
Debt continues to spiral
Volatility and fragility in the financial sector threaten the likelihood of a new stock market crash
Disruption to global supply chains
2.5 So What Does the Future Hold?
Notes
3 The Bumpy Ride to Social Decay
3.1 The Rise and Rise of Inequality
Changing patterns in the distribution of wealth
Changing patterns in the distribution of income
3.2 The Startling Growth of ‘Absolute Poverty’
3.3 Growing Inequality and Poverty Undermine Welfare and Social Solidarity
3.4 Neo-liberal Austerity Policies and the Power of the Plutocracy Caused Growing Inequality and Absolute Poverty
The contribution of neo-liberal austerity policies to rising inequality and poverty
The plutocracy promoted and legitimized austerity policies
3.5 The Fear of Migration Has Been Used to Fuel Populism
3.6 The Erosion of Liberal Democracy and the Rise of Populism Disrupt the Potential for Sustainable Growth
Notes
4 The Collapse of Environmental Sustainability
4.1 From the Dawn of Settled Agriculture to the Great Acceleration
4.2 The Transition to the Anthropocene – Take, Make, Use and Waste
‘Taking’ from the biosphere: the example of the energy vector
‘Making’ with what is ‘Taken’ – are we using the earth’s resources more efficiently?
Consumption: ‘Using’ what is ‘Made’
‘Waste’, in and after ‘Use’
4.3 It All Adds Up to a Crisis in Environmental Sustainability
Notes
5 Mass Production Runs Out of Steam
5.1 Learning from History – Successive Techno-Economic Paradigms since the Industrial Revolution
Growth surges and techno-economic paradigms
Learning from history
5.2 The Development, Deployment and Atrophy of the Mass Production Paradigm
The ‘Big Bang’ in Mass Production was followed by speculative frenzy, a financial crisis and the Great Depression
The deployment of Mass Production and the post-war Golden Age
Maturity deferred: the globalization of Mass Production
Complementary policy changes in low- and middle-income countries
5.3 Economic and Social Sustainability during the Mass Production Paradigm
The synergistic close fit between economic and social sustainability in the Golden Age
The erosion of synergy between economic and social sustainability after the Golden Age
5.4 The Crisis in Environmental Sustainability during the Mass Production Paradigm
5.5 Mass Production: The Balance Sheet
Notes
6 Information and Communication Technologies: The Motor of the New Techno-Economic Paradigm
6.1 The Emergence of the New Heartland Technology
6.2 Digital Logic – the Brains of the System
6.3 The Evolution of ICTs
Data storage and communication
Computer-integrated and flexible production systems
The Internet of Things
Big Data and Artificial Intelligence
6.4 Beyond Mass Production
ICTs provide the capacity to revive productivity growth
ICTs provide the capacity for decentralized production, and thus for bringing residence, production and consumption closer together
ICTs can provide the capacity to customize products to meet individual needs
ICTs can provide the capacity for shared, rather than individualized, consumption, and for repairable rather than throwaway products
ICTs can enhance the capacity for greener production systems, and for the development of renewable energy
ICTs provide for peer-to-peer communication that enhances civil society
6.5 Not Just Roses, Also Weeds in the Garden
Notes
7 Transformative Change in Practice
7.1 Mobile Telephones Transform the Financial Sector and Facilitate Economic and Social Inclusion
Mobile phones have promoted financial inclusion and renewable energy in Kenya
Social inclusion through access to renewable energy
Mobile telephony and techno-economic paradigms
7.2 Renewable Energy, Large Dams and Hydroelectric Power
The impact of large hydro in the Zambesi River basin
Large dams also support irrigation
Is there an alternative to large-dam hydroelectricity?
Large hydro, renewables and techno-economic paradigms
7.3 Precision Farming and Robots in Agriculture
The extension of mass production in mechanized farming
ICTs, robotics and machine-learning can transform mechanized farming
Precision farming and techno-economic paradigms
7.4 Three Case-Studies – The Balance Sheet
Notes
8 What’s To Be Done?
8.1 The What – Visioning a More Sustainable Future
A more sustainable environment
A more sustainable economy
A more sustainable society
8.2 The How – What Actions Will Deliver a More Sustainable World?
Regulating and changing behaviour in the financial sector
Reducing the concentration of individual and corporate power
A Smart Green New Deal
Incentivizing changes in behaviour
Infrastructure to support the Circular Economy
Innovation to support the Green New Deal
Strengthening global and local governance
Promoting global development
8.3 The Elephant in the Room – Who Will Drive the Transition to a Sustainable World?
Notes
9 Who Will Do It? Making Change Happen
9.1 Entrepreneurship: Turning Fantasy into Fact
9.2 The Private Sector Provides the Motive Power, the State is at the Steering Wheel (and Sometimes Pays for the Petrol)
Beyond the private sector
9.3 Building Coalitions for Change
9.4 Change Is Cumulative
9.5 How to Jump Over Walls
Synergistic interventions
Governments must act decisively and with vision
Confronting reactionary power bases
9.6 Sequencing and Priorities: The Two-Shot Stimulus to a Paradigm Change and the Rebuilding of a Sustainable World
The trigger for change
Notes
Index
End User License Agreement
List of Tables
Chapter 2
Table 2.1
Average annual economic growth rates: World, US and Europe (%)
Chapter 3
Table 3.1
Extent and character of migrant inflows in ten high-income economies
Chapter 4
Table 4.1
Range of approximate CO
2
emissions per unit of electricity produced, ...
Table 4.2
Projected impacts of global warming at increase of 1.5 °C and 2 °C
Chapter 5
Table 5.1
Post-tax wages in global economies, March 2009 ($)
Guide
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Table of Contents
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Praise
‘Faced with what some describe as extinction-level threats, Kaplinsky dares to say this is no time to despair. With his considerable expertise as a developmental economist, he shows that trying to tick off each problem as it comes along is doomed to failure. Part history, part manifesto, Sustainable Futures calls for an integrated approach which brings together the resources of government and the power of the people. Those who want to avoid the mistakes of the past and re-make our future should read this book.’
George Alagiah, BBC Journalist and Author
‘Dedicated to “all the grandchildren”, Sustainable Futures is written in the hope of contributing to a pathway out of the current dreadful state of our world and into a sustainable future for them. Kaplinsky provides a theoretical and conceptual framework to better understand the current crises and to extract lessons for the future from epochal moments in history and sets out an ambitious agenda for change. He has indeed provided a compelling and hopeful message “for the grandchildren”.’
Keith Bezanson, former President of Canada’s International Development Research Centre
‘A most inspirational and enlightening book by a leading development scholar and thinker, analysing courses and actions to build an economically, socially and environmentally sustainable future. A book with historical and analytical depth as well as a global and forward vision which is much needed at a moment when the world is at crossroads.’
Xiaolan Fu, Professor of Technology and International Development, University of Oxford
‘A compelling read, brilliantly written and bubbling with thought-provoking ideas, experience and outlines for the future.’
Sir Richard Jolly, former Assistant Secretary-General of the UN
‘Read this book! It’s tightly argued, packed with an astonishing depth and range of evidence on our current crises, and yet is ultimately equally full of hope and practical inspiration, ambitiously laying out a sweeping agenda for change. Kaplinsky combines the big vision of how society must come to grips with innovation together with the mechanics of driving change.’
Harriet Lamb, CEO of Ashden and former CEO of Fairtrade International
‘As the pandemic continues to grip the world, we are facing increasing demands for a more resilient and sustainable socio-economic system. Taking a Schumpeterian perspective, this book offers an effective clue to a way out of the current crisis. While it still sees a window of opportunity in the potentials of information communication technologies, it also sets outs a blueprint for collective action by us. It is a must read for all of us, who should participate in this joint effort.’
Keun Lee, Winner of the Schumpeter Prize, 2014, and Professor of Economics, Seoul National University
‘This work is a tour de force by a mature and insightful social scientist, worth reading by anybody concerned with how to tackle simultaneously challenges such as global warming and growing inequality. It explains how the world got into its current unsustainable state and it comes with brave and radical ideas for how to move it back towards sustainability.’
Bengt-Åke Lundvall, Emeritus Professor of Economics, Aalborg University
‘There are many critics of the current capitalist system. And equally many others who profess how to organize it better. What is often missing is a link between the two. That is, an understanding of how we got into the mess we have, and using this understanding to analyse what is required to do better. Kaplinsky’s book does just that, bringing together historical, political and economic research in a way that allows us to both learn from history, and to have a more prosperous and sustainable future.’
Mariana Mazzucato, Founding Director of the UCL Institute for Innovation and Public Purpose, and author of Mission Economy: A Moonshot Guide to Changing Capitalism
‘Kaplinsky has laid out with clarity, historical perspective and illuminating supporting data just how the current economic picture indicates a turning point in advanced capitalism. Kaplinsky’s driving and compelling historical narrative undergirds an ambitious case for political change that is both grounded and hopeful, touching on income equality, environmental resilience and economic development. Sustainable Futures is a serious and highly readable account of our recent economic history and our potential path forward. Informative, insightful and inspiring.’
William Milberg, Dean and Professor of Economics, The New School for Social Research, New York
‘A timely and must-read book as the world ponders how to build better. It shows that the age of mass production, with endless harnessing of energy and matter, has resulted in multiple crises of declining growth, the rise of plutocracies and populism, and the ravaging of the environment. Kaplinsky argues that the power of the financial sector and the plutocracy needs to be overcome, in order to realize the potential of the ICT-based techno-economic paradigm to build a more sustainable and environment-friendly system of production.’
Dev Nathan, Visiting Professor at the Institute for Human Development, New Delhi, and Director of GenDev Centre for Research and Innovation, India
‘Kaplinsky illustrates the depth of the crises of the twenty-first century. Sustainable Futures distinguishes itself in its interdisciplinary, pluralist, and historical approach coupled with an emphasis on the broader techno-economic paradigm: technological drive, economic development, environmental sustainability, social change and political structure. This timely book is extremely relevant to policymakers and researchers of both the industrialized and developing world.’
Arkebe Oqubay, Senior Minister and Special Adviser to the Prime Minister of Ethiopia, and Distinguished Fellow of the Overseas Development Institute
‘If you want to understand today’s world and how to fix it, this is the book to read. Kaplinsky shows a formidable capacity to encompass the whole spectrum of today’s global problems and provides realistic – though ambitious – solutions. Indispensable reading!’
Carlota Perez, author of Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages
‘Engagingly written and spanning economic, social and environmental agendas in an exemplary way, Sustainable Futures places Information and Communication Technology at the heart of a compelling argument, but never as a technology fix. On the contrary, the book argues convincingly for a wide range of social and political solutions that should provide a much-needed and powerful directionality to the opportunities offered by these technologies.’
Johan W. Schot, Professor of Global History and Sustainability, Utrecht University
‘This work provides a careful, historically based, tough-minded but ultimately optimistic agenda for action that could rise to the challenges of the rapidly deteriorating climate and environment, threats to social cohesion, predatory elites, and destructive nationalism. We really can go beyond the fragile and destructive models and paths that we have followed, towards a much better economy, society and way of living. But we must decide and decide now; as the book’s final sentence states, drawing on Sartre, “to choose not to act, is to choose”.’
Lord Nicholas Stern, co-chair of the Global Commission on the Economy and Climate, Professor of Economics at the London School of Economics and Political Science, and former Chief Economist of the World Bank
‘Sustainable Futures is a triumph. Drawing on all the social sciences, it demonstrates how bulldozer trends of our time can be understood as fuelled by the declining phase of the Mass Production “techno-economic paradigm”. The book ends with a vision of what an ICT-enabled, more sustainable world could look like. Anybody interested in the future of human – and non-human – society should debate it.’
Robert H. Wade, Professor of Global Political Economy, London School of Economics and Political Science
‘The journey from the world’s current multiple crises to a sustainable future looks almost impossibly difficult. But in Raphael Kaplinsky we have a guide who inspires confidence. He is that rare thing: an economist who combines a real understanding of society and politics with a seasoned idealism, and in this book he gives us what is perhaps our best chance.’
Richard Wilkinson, co-author of The Spirit Level and co-founder of The Equality Trust
Sustainable Futures
An Agenda for Action
Raphael Kaplinsky
polity
Copyright Page
Copyright © Raphael Kaplinsky 2021
The right of Raphael Kaplinsky to be identified as Author of this Work has been asserted in accordance with the UK Copyright, Designs and Patents Act 1988.
First published in 2021 by Polity Press
Polity Press
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Cambridge CB2 1UR, UK
Polity Press
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Suite 300
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All rights reserved. Except for the quotation of short passages for the purpose of criticism and review, no part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher.
ISBN-13: 978-1-5095-4782-1
ISBN-13: 978-1-5095-4783-8 (pb)
A catalogue record for this book is available from the British Library.
Library of Congress Cataloging-in-Publication Data
Names: Kaplinsky, Raphael, author.
Title: Sustainable futures : an agenda for action / Raphael Kaplinsky.
Description: Cambridge, UK ; Medford, MA : Polity Press, 2021. | Includes bibliographical references and index. | Summary: “How to steer the economy and society to a more sustainable future”-- Provided by publisher.
Identifiers: LCCN 2020053493 (print) | LCCN 2020053494 (ebook) | ISBN 9781509547821 (hardback) | ISBN 9781509547838 (paperback) | ISBN 9781509547845 (epub) | ISBN 9781509548439 (pdf)
Subjects: LCSH: Sustainable development.
Classification: LCC HC79.E5 K3644 2021 (print) | LCC HC79.E5 (ebook) | DDC 338.9/27--dc23
LC record available at https://lccn.loc.gov/2020053493
LC ebook record available at https://lccn.loc.gov/2020053494
by Fakenham Prepress Solutions, Fakenham, Norfolk NR21 8NL
The publisher has used its best endeavours to ensure that the URLs for external websites referred to in this book are correct and active at the time of going to press. However, the publisher has no responsibility for the websites and can make no guarantee that a site will remain live or that the content is or will remain appropriate.
Every effort has been made to trace all copyright holders, but if any have been overlooked the publisher will be pleased to include any necessary credits in any subsequent reprint or edition.
For further information on Polity, visit our website: politybooks.com
Dedication
To my grandchildren (Arlo, Kika, Eva and Cam), to my children and their partners (Natasha, Ben, Justin and Nichole) who made them for us, to my godson (Kian) and, of course, to all the grandchildren of the world
In memory of my parents, Morris and Becky, with love and gratitude for building the platform on which our family stands, and to Cecil, who left us too early
Tables
2.1 Average annual economic growth rates: World, US and Europe (%)
3.1 Extent and character of migrant inflows in ten high-income economies
4.1 Range of approximate CO2 emissions per unit of electricity produced, different sources of energy (grammes CO2/kWh)
4.2 Projected impacts of global warming at increase of 1.5 °C and 2 °C
5.1 Post-tax wages in global economies, March 2009 ($)
Preface
I decided to write this book after returning from a wonderful family summer vacation in September 2018.
Looming over the warm afterglow of the holiday was the spectre of a damaged and increasingly unsustainable world. Donald Trump was two years into his malign disruptive Administration, threatening safety and livelihoods not just in the US, but across the world. It was increasingly clear that the UK was descending into a narrow tunnel in which delusions of past imperial grandeur, coupled with rising xenophobia, fuelled an insular and destructive nationalism. In my country of origin, South Africa, ‘state capture’ had led to the looting of state coffers by a predatory and opportunistic new elite. In Brazil, President Bolsonaro was following in the footsteps of his mentor, Donald Trump, and in the slums of the Philippines, police were encouraged to shoot on sight. If that wasn’t enough, climate change and global warming were accelerating at an alarming rate.
Out of my post-holiday depression was born a desire to contribute in some small way to finding a solution to these societal ills. This book is an attempt to identify a path which might help us to get out of the mess in which we find ourselves. Learning from history, it is not inevitable that our worlds collapse into increasing unsustainability. To the contrary, there are credible reasons for optimism, and this is the furrow which I plough in this book.
Out of crisis comes opportunity. It is possible to rebuild a more sustainable world by taking advantage of the potential offered by a new socio-economic paradigm. The lives of all of our grandchildren – to whom this book is dedicated – demand that we do so.
Acknowledgements
During the course of my professional life, I have been privileged to work with three truly inspirational colleagues. Their contributions play a central role in the ideas advanced in this book.
The late Chris Freeman mentored my early career development and alerted me to the centrality of innovation in the unfolding of history.1 Chris was resolute in his belief that technologies are socially created, and are hence malleable. Thus, he argued, we have a choice about the nature and trajectory of the society we live in. This choice, however, is frequently obscured by disciplinary silos and a belief in technological determinism. In the early 1980s, Chris pioneered the theory of ‘long waves’, which is the analytical structure I have drawn on and extended in order to analyse our contemporary crises in sustainability.
I worked with the late Robin Murray for more than two decades. Robin was an inspirational teacher and a visionary colleague.2 Amongst the imprints he left on me was the understanding that distributed power, robust communities and civic participation are the foundations of a more socially and environmentally sustainable world. Robin helped me to realize that more inclusive societies not only are normatively desirable, but can also be more ‘efficient’ and are, hence, feasible. He was a pioneer in the development of ideas about the Circular Economy and the urgent need to take action to avoid a looming environmental crisis.
More recently, I have had the pleasure and privilege of working closely with Carlota Perez.3 Carlota collaborated with Chris Freeman in extending long wave theory from its preoccupation with economic trajectories to an analysis of the co-evolution of technology, economy and society. Subsequently, she elaborated this framework to take account of the role which finance plays in the unfolding rise and atrophy of techno-economic paradigms. Drawing on insights gained from an understanding of the evolution of past techno-economic paradigms, Carlota provides us with a vision of what a more sustainable world might look like as the new Information and Communications techno-economic paradigm is deployed. But, she argues, this can only be achieved through purposeful action, particularly by visionary and effective governments. Carlota has stood by my side throughout the drafting and redrafting of this book. We have put on weight during our long lunches, and she has read (and sometimes reread) my draft chapters.
Although I have leant heavily on the contributions of these three colleagues, I take responsibility for the views expressed in this book.
My editor at Polity, Jonathan Skerrett, has been exceptional. He helped me to sharpen my focus and to make my material less inaccessible to a non-specialized audience. Shan Vahidy provided an invaluable and highly professional read of an earlier draft, Stevie Holland was my constant foil as an intelligent general reader, and Keith Bezanson provided insightful comments on the complete draft. Annie James (in Delhi) and Courtney Barnes and Chris Grant (both in Cape Town) assisted me with excellence in the processing of some of my data. Leigh Mueller assisted with a close copy-editing of the text. And, of course, the wonderful Wikipedia – how did we manage without it?
A number of colleagues and friends provided data and comments on individual chapters. The list is long. What surfaces as the work of an individual author is always a compilation of the views of others, sometimes absorbed explicitly and at other times seeping into the author’s unconscious through the ether. So here are the culprits (in alphabetical order):
Andreas Antoniades (Chapter 2), Mike Boulter (Chapter 4), Tim Foxon (Chapter 4), Stephany Griffiths Jones (Chapter 2), James Hampshire (Chapter 3), Tim Jackson (Chapter 4), Richard Jolly (Chapters 2 and 3), Giorgos Kallis (Chapter 4), David Kaplan (Chapter 2), Bill Lazonick (Chapter 2), Rasmus Lema (Chapter 7), Paul Lewis (Chapter 3), Mathew Lockwood (Chapter 4), Mariana Mazzucato (Chapter 2), Erik Millstone (Chapter 4), Mike Morris (Chapters 3, 7, 8 and 9), Dev Nathan (Chapter 4), Hubert Schmitz (Chapter 2), Benjamin Sovacool (extensive assistance with Chapters 4 and 7), Mark Stroud (Chapter 7), Nikos Vernardakis (Chapter 2), Sam Watson-Jones (Chapter 7), Richard Wilkinson (Chapter 3) and Martin Wolf (Chapter 2).
I apologize to my family, Hugh Fowler, Jenny Higgo, Jim Roby, Karen Fowler, Kate Springford, Leslye Orloff and Penny Leach for spoiling your meals during the development of my ideas. I owe you all a drink (or two).
And finally, my wife, Cathy. Like most authors, I have been a grumpy and distracted companion as I ploughed my way through drafts and redrafts. Cathy has been an insightful intellectual companion, not only encouraging me to avoid beginning sentences with ‘But’ and ‘And’ and to reduce sentence length, but, more importantly, with the development and elaboration of my ideas. She is too tactful to say so, but I am sure she is even more relieved than I am that the book has eventually been completed. I cannot measure her generous assistance.
Notes
1
http://freemanchris.org/publications
.
2
https://robinmurray.co.uk
.
3
www.carlotaperez.org
.
1A Fork in the Road
We live in perilous times.
Not just have we damaged our environment, but our environment is now damaging us. Our economies no longer function effectively – economic growth has been uneven, has slowed and is increasingly precarious. Our politics and social fabric are in trouble – societies have become more unequal, citizens feel a loss of agency, and populist leaders flourish. Most recently, we have been overcome by the Covid-19 pandemic, which has highlighted the underlying structural problems in our societies. It is evident that, once (if?) we overcome the pandemic, we cannot return to ‘normal’, since ‘normal’ was clearly the problem in the first place.
What will it take to return us to a semblance of a more sustainable world? The distinctive feature of this book is that it sets out an integrated programme which spans economic, social and environmental agendas requiring action not just by governments, but also by a range of societal stakeholders.
The central argument of this book is that the integrated systemic response required to provide a more sustainable world is built on an appreciation of the character of humankind’s economic and social progress over the past three centuries. This has been marked by a series of surges in economic growth that I will refer to as techno-economic paradigms. Each of these paradigms involves a synergy between economic structures and social and political relations, and each has had characteristic environmental footprints. After a period of roughly five to six decades, each surge has decayed and been superseded by a new dominant paradigm. This book will show how the interrelated economic, social and environmental crises which are now overwhelming us result from the atrophy of the most recent paradigm (Mass Production).
But there is hope, in the form of the new techno-economic paradigm which is unfolding – the Information and Communications Technology (ICT) paradigm. This offers the potential for a more sustainable trajectory of economic growth and a more equal, cohesive and inclusive society and polity. However, the emerging ICT paradigm is malleable. It has a ‘dark side’, seen in the growing asymmetry of power and income, the development and diffusion of alarming and frightening autonomous military technologies and the erosion of privacy. So, what measures are required to allow the ‘bright side’ to triumph? These policy responses are set out in Chapter 8, and the key stakeholders required to achieve progress are analysed in Chapter 9.
Clearly, before we can get to these policy issues, we need to step back and understand the historical trajectory which has resulted in the confluence of connected economic, social and environmental crises. We begin in Chapter 2 with what I believe is the most technical chapter for non-specialized readers. This charts the rise and fall of Mass Production as an economic system. It evidences the unprecedented ‘Golden Age’ after World War 2 when economic growth proceeded at historically unprecedented rates, not just in the richer northern economies but in almost every country of the globe. But, after roughly three decades, the ‘Golden Age’ of Mass Production began to atrophy. Not only did the rate of economic growth slow in all of the major high-income economies, but, as the millennium approached and advanced, the underlying fundamentals of growth became increasingly uncertain. A high-tech financial bubble in the late 1990s was followed by the prolonged Great Recession after 2008. The Covid-19 pandemic in 2020 raised the stakes in economic fragility, exposing underlying structural weaknesses which have been unfolding for some decades.
As in each of the previous post-Industrial Revolution surges, the Mass Production techno-economic paradigm was supported by patterns of social and political organization, by lifestyles and by societal norms and values. In the ‘Golden Age’, this saw the extension of liberal democratic political systems, mass consumption, suburbanization and, despite periods of turmoil, a generalized sense of common social and political purpose. Despite differences, there was a widespread sense that ‘We are all in it together.’ But, just as the economic system of Mass Production began to atrophy from the mid-1970s, so too did the social compact which supported Mass Production. In Chapter 3, I describe the evolution of these social and political developments which, since the early 1980s, have resulted in increasing inequality, increasing social discontent and the rise of populist politics.
Whilst the link between the economic, the social and the political can be seen as involving a ‘close synergistic fit’ between 1950 and the late 1970s, and then their interrelated decay after the early 1980s, the unfolding environmental crisis has much deeper roots. Although the origins of the environmental crisis go back at least until the Industrial Revolution in the early eighteenth century, after 1950 the biosphere witnessed a sharp increase in the forces driving climate change and environmental unsustainability. This has come to be termed ‘The Great Acceleration’. Although the Great Acceleration and its increasingly severe impact on the environment is in large part a consequence of sheer numbers (of people and consumption), in some important respects it also flows from the specific character of the Mass Production techno-economic paradigm. These developments are described in Chapter 4.
Chapter 5 explores the character of these interlinkages between the economic, the social, the political and the environment through the lens of what is referred to as ‘socio-technical systems’ – that is, the body of theory which I use to analyse the rise and fall of the Mass Production techno-economic paradigm. Working with this framework, I analyse and explore the nature of these interactions during the Golden Age, and then the linked crises in sustainability after the late 1970s.
Chapters 6 and 7 turn to the future. Chapter 6 recounts the development and evolution of the ICT techno-economic paradigm. It illustrates the ‘revolutionary’ and disruptive nature of this new technology, seen though the historical lens of five previous techno-economic paradigms. Each of the previous paradigms was driven by a core ‘heartland technology’ – that is, a technology which has ubiquitous use through the terrain of economic and social activity, which offers major reductions in cost and the possibility of new products, and which not only is characterized by declining cost but has no physical limits to its supply. Information and Communications technologies exhibit all of these attributes. In Chapter 7, I present three case-studies which not only evidence these ‘heartland technology’ characteristics, but also show the synergy between the economic, the social and the political, and their capacity to strengthen environmental sustainability. They set the scene for the development of a synergistic systemic policy agenda simultaneously tackling the remaking of economic, social and environmental sustainability.
A five-point programme to provide a sustainable trajectory to the deployment of the ICT paradigm is outlined in Chapter 8. Although the diffusion of electronic technologies lies at the heart of the new paradigm, achieving a more sustainable world cannot be achieved through a technical fix. The systemic nature of techno-economic paradigms requires complementary changes in social and political organization and in lifestyles, values and norms. Chapter 9 concludes the book by discussing agency – who must do what, and when, if a sustainable trajectory is to be achieved?
A word of caution is needed from the outset. The terrain of discussion in this meta-analysis of crisis and response is vast. The interpretation of history in Chapter 5 and the theory of techno-economic paradigms are subject to disputation among historians. There are many uncertainties in the impact of particular policies, and there are many reactionary forces resisting progressive change. However, a nihilistic rejection of the ideas in this book has its own dangers. It is abundantly clear that existing policy proposals are not adequately addressing the challenges to the environment, to our economies and to the social and political fabric. In large part, this is because they do not recognize the need for a holistic response to the crises in sustainability and because they fail to learn from history.
This book is a plea for agency and activism. It sets out an agenda for action. But action must be purposefully guided to achieve more sustainable societies. The character of the new paradigm is malleable. What emerges will depend on how individuals and groups of individuals react to the challenge. If we really care about the state of our world, then we cannot remain neutral observers. We must exercise our individual agency to help to shape the direction of change. Only if enough of us work in concert can we avoid the dark side of paradigm change and facilitate the transition to a new more economically, socially and environmentally sustainable (dare I say ‘civilized’?) world.
This book focuses on the experience of the dominant high-income economies in North America, Europe and Japan. Their growth trajectories dictated the shape of the global economy and global politics, at least until the end of the twentieth century. Despite the recent rapid growth of China, India and other emerging countries, the high-income economies continue to dominate the world and to determine the trajectory of global economic, social and environmental sustainability. Clearly, there is an urgent need to explore the potential of the ICT paradigm to promote sustainable development in low- and middle-income countries as well. This is a herculean but crucial task, but requires separate exploration.
2The Rise and Fall of the Mass Production Economy
The Covid-19 pandemic crashed the global economy.
In the first half of 2020, the UK economy declined at the fastest rate since the beginning of the Industrial Revolution three centuries ago. In the US, the unemployment rate mushroomed to 25 per cent of the labour force. Germany, long the lead economy in Europe, fell into recession. The economic car-crash was not confined to the high-income countries, but affected the global economy. For the first time since its growth spurt began in the 1980s, China decided not to produce a target for its rate of economic growth. The collapse in world trade (more than 30 per cent in the first half of 2020) was the largest on record. But not all citizens suffered equally. Despite government programmes to support employment and production, as a general rule the poor were hit more by the economic collapse than were the rich. And that was as true for distributional impacts within countries as between high- and low-income economies. A simple indicator of the scale of this challenge can be seen in the cost to governments of trying to arrest the rate of economic decline. In April and May 2020, high-income countries injected $17tn into their economies. This raised an already high average government-debt/GDP (Gross Domestic Product) ratio of 109 per cent in mid-February 2020 to 137 per cent in May.
Governments and citizenry alike ponder how the economy will recover after the pandemic? Will it be a V-shaped recovery – rapid growth following rapid decline? Or might the recovery be W-shaped – rapid growth, followed by a second collapse, and then recovery? Perhaps a U-shape – rapid decline and a period of prolonged stagnation before revival? How about a K-shaped recovery – with the rich getting richer and the poor getting poorer? Each of these scenarios assumes that a recovery is inevitable, that the shape of global economic growth will not take the form of the ‘dreaded L’ – a sharp decline and no recovery. Underlying most of this speculative frenzy is the belief that it was Covid-19 that disrupted ‘normality’. As if what existed before the pandemic was sustainable. As if the Great Recession which followed the Financial Crisis of 2008 was a temporary blip which could be managed with a modicum of tinkering to economic policy.
This optimism about the prospects for renewed future economic growth – a return to ‘normality’ – is misguided. The global economy witnessed historically unprecedented rates of economic growth after the Great Acceleration in 1950. But this growth surge began to taper off after the mid-1970s. The fundamentals had turned. Deep structural flaws which undermined sustained economic growth had begun to emerge. Their impact was delayed by the expansion of globalization from the mid-1980s. But the relief was temporary. The structural weaknesses in the Mass Production growth paradigm poked their heads above the surface in the burst high-tech bubble in 1998–9. After a brief respite, they then re-emerged frontally in the global Financial Crisis in 2008 which resulted in the greatest economic decline since the 1930s. Again, the impact of these structural problems was temporarily masked, with the reflationary economic policies failing to address underlying structural problems, particularly with regard to the size and character of the financial system.
This is the story which is described in this chapter. In documenting this growing spectre of economic unsustainability, I will begin by reviewing the rise and then the slowdown in the rate of economic growth after World War 2. I will show how this slowdown resulted from a decline in investment- and productivity-growth. Two sets of related factors explain this fall in the underlying drivers of growth. The first was the exhaustion of the productivity gains delivered by the Mass Production techno-economic paradigm. I will discuss this phenomenon in Chapter 5. The second – the subject matter of this chapter – was the economic policies adopted after the triumph of neo-liberalism in the early 1980s. These not only resulted in an increasingly unequal society but also decisively shifted the political economy of growth in favour of the financial sector and (as I will show in the next chapter) the interests of the plutocracy. The post-1980s neo-liberal era was characterized by a decline in investment in long-term innovation and growth, intensifying financial speculation, deindustrialization, rising debt, increasing economic volatility and the adoption of austerity economic policies. The chapter concludes by highlighting a number of developments intrinsic to the evolution of the Mass Production economy which threaten the sustainability of the global economy. These developments made sustainable economic growth unlikely, even before the economic collapse resulting from the Covid-19 pandemic.
2.1 The Rise and Fall of Economic Growth, 1950–2018
The dawn of the new decade in 1950 followed twenty years of global turmoil, particularly in Europe and North America. The 1930s had been dominated by the Great Depression, with falling living standards and millions of people thrown out of work. The decade saw the rise of Nazism in Germany, and fascism in many other European countries. If the Depression was not bad enough, 20 million soldiers and 40 million civilians were killed during World War 2. Much of the productive capacity of European economies was destroyed, and Europe’s infrastructure was in tatters.
It was on these shaky foundations that the world transitioned to two decades of unparalleled rapid economic expansion after World War 2, and not just in the high-income industrialized economies. Economic historians characterize this era as the ‘Golden Age’. This economic expansion was based on a reconstruction boom, with very large investments going into repairing the damages of war, massive house-building programmes and creating the infrastructure for a new age of mass consumption, automobilization and suburbanization. This sustained economic progress was made possible by the productivity gains generated by the deployment of the Mass Production techno-economic paradigm.
However, the benefits of these stimulants to growth began to tail off. After the early 1970s, the global economic growth rate and the rate of growth in the two major economic regions (the USA and Europe) declined steadily. Figure 2.1 provides a pictorial snapshot of these post-war growth trends for the world, for the US and for those economies currently members of the European Union. The data reflect the simple average of individual economies’ growth rates, and take no account of the relative size of their economies. Eyeballing this graphical representation, three trends are clear. First, there was considerable variation between years. Second, the average growth rates of the world, the US and Europe broadly followed similar trends. Third, after 1973 the trend rates of growth declined. Given population growth this means that in recent years – on average and not taking account of the distribution of growth – there was barely any increase in per capita incomes. (In fact, as I will show in the following chapter, most of the gains from growth were reaped by the already rich. In the US, for example, real wages for the low- and middle-skilled workforce stagnated after 1979.)
Figure 2.1 The expansion of Gross Domestic Product, 1961–2018: World, US and Europe (% per annum)
Source: data from World Bank World Development Indicators
Table 2.1 decomposes these broad trends into four periods. The first reflects the high-growth phase between 1961 and 1973, the Golden Age. (In fact, the boom began during the 1950s, but a consistent database is unavailable to illustrate this.) The second period – 1974 to 1985 – was dominated by the recovery from the two oil-price shocks of 1973 and 1979. The third phase (1986–2006) was one of deepening globalization, coinciding with China’s policy of ‘Opening Out’ in 1985. This led to the unbundling of production in the high-income economies and the growth of global supply chains in China and other low-wage economies. The final period was the decade after the 2008 Financial Crisis.
Table 2.1 Average annual economic growth rates: World, US and Europe (%)
1961–1973
1974–1985
1986–2006
2007–2017
World
5.5
3.2
3.0
2.6
United States
4.6
3.1
3.0
1.4
European Union
5.0
2.3
2.4
1.0
China
5.2
8.9
9.4
8.8
India
3.5
4.9
5.6
6.9
Source
: data from World Bank World Development Indicators
These data evidence a steady decline in economic growth rates in the US and European economies which dominated the global economy. During the Golden Age first phase, their average annual growth rates exceeded 4.5 per cent. Thereafter, they declined steadily to an annual average of around 3 per cent until 2006. After the Financial Crisis in 2008, the rate of economic growth in both the US and Europe did not even match the rate of population growth. By contrast, some developing countries, including very large economies such as China and India, experienced sustained and high rates of growth over this long time period, exceeding 8 per cent in China and 5 per cent in India for more than two decades.
2.2 What Accounts for the Fall in the Rate of Economic Growth?
Broadly speaking, economic growth arises from four sets of factors. The first is more and increasingly skilled labour; the second is more physical investment (‘capital’); the third is increased productivity as a result of improvements in equipment and in the organization of production; and the fourth is improvements in the infrastructure supporting the use of these inputs. I will predominantly focus on the first three of these growth-drivers in this chapter, but will revisit the role played by infrastructure in post-war growth in Chapter 5.
Was it a consequence of a shortage of labour?
The shortage of labour contributed little to the declining rate of economic growth after the early 1970s. There were, of course, skills shortages in particular sectors and economies. But, in general, the quantity of labour available to support investment remained in relatively abundant supply. When labour shortages did occur in the high-income industrial countries during the post-war boom, labour was imported from the developing world. For example, the UK actively encouraged both unskilled workers and skilled migrants from the Caribbean and South Asia during the 1950s and 1960s. In Western and Northern Europe, millions of migrants were drawn from North Africa and Turkey, and after the turn of the millennium both skilled and unskilled labour were sourced from Central and Eastern Europe. Further, access to labour in the high-income economies was not limited to migration. At the world level, labour was in abundant supply. The deepening of globalization after the mid-1980s took advantage of this global labour force and outsourced millions of jobs in manufacturing and services, from the high-income economies to China and other low- and middle-income economies. This enabled the corporate sector to draw on a vast global pool of cheap unskilled, and increasingly also semi-skilled, workers.
