Psychopathology at the Limits to Economic Growth: An Essay in 3 Parts

Introduction – what this essay is about

This article looks at the individual and social psychology of the limits to economic growth. It is in three parts. The first part is an explanation of the concept and reality of the limits to growth. The second part is concerned with the impact on individuals and ordinary people as it becomes more difficult to manage everyday life. The third part is about the impact of reaching the limit to growth on decision makers and professionals. These have hitherto managed businesses, institutions and governments in a growth economy but now face conditions of contraction. It is also about the relationship between these two kinds of groups – between the elite and the many.

A large part of this story is about what is today thought of as “mental health” – though part of the argument is that as the social and economic situation evolves it will challenge existing theories and pre-conceptions of what is called “mental illness” and “mental health”. To make sense of current circumstances, it will be necessary to give greater prominence to economic and environmental disruptions of everyday life. However, as circumstances evolve it will also be necessary to think differently about economic and political decision making in a way that acknowledges collective psychopathologies among the elite that lead to dysfunctional decisions that make things worse. As the saying, attributed to Euripides goes “Those whom the gods would destroy, they first send mad”.

Part One: The relationship between generations at the limits of growth

Since most mental health professionals only acknowledge a secondary role, if that, to economic influences on mental health and, since most economists dismiss the very idea that there actually are limits to economic growth, the theme of this paper is under-explored. However, reality will break into the thinking of mental health workers eventually. Indeed is already doing so in as far as some psychologists are finding that they are having to address the emotional and psychological impacts of climate change – and in some more enlightened cases scrambling to think about how parents and teachers should talk about the climate change with their children. At the same time children are having to think about how to talk about climate change to their parents when their parents are in denial and clearly don’t get it, or want to get it. As Greta Thunberg has put it when speaking at a United Nations Climate Conference

“You are not mature enough to tell it like it is. Even that burden you leave to your children.”

This remark should remind us that the official definition of sustainability was formulated by Gro Harlem Bruntland in this way:

“Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

In other words sustainability is about inter-generational equity – and in a world in which it is at long last being acknowledged that the future for today’s children looks grim because of climate change, it feels as if the anger and resentment of young people is inevitable – the more so the more they learn about all the issues the generation of their parents and grandparents have ignored and which will now have a negative impact on their lives.

But it is worse than this – the preceding remarks are just about climate change. Climate change is bad enough but it is only one of a number of problems that are coming down the tracks at humanity. In this article our aim is to contextualise climate change and its impacts in a bigger picture….and then to look at the psychological impacts of this wider picture. This study of psychology must also include the mind set of the elite and why they are reluctant and unable to act to prevent catastrophe.

Is there a a grim warning about this in Greek mythology? The oft quoted “those whom the gods would destroy they first send mad” is a reference to a story in which Hera, wife of Zeus has it in for Heracles so she gets Madness, daughter of Night, to send him into a termporary insanity in which kills his own children. The way things are going, a lot of future generations are going to die young and it is questionable that the children of the elite will somehow be spared.

But, to rewind the clock…

The Limits to Growth study of 1972

An appropriate point to start this analysis is a study that was written by a group of system scientists at the Massachusetts Institute of Technology and was sponsored by the a business group called the “Club of Rome”. The book that they published was called The Limits to Economic Growth (hereafter shortened to LtG). In their research they constructed a model of the global economy which included population, industrial production, food production – and pollution and depletion. As the global economy grew so too did pollution arising from production (like CO2 and other greenhouse gases or polluted water or sewage ) as well as other wastes and refuse from used products which go into what are called “sinks”. One brake on the growth process is where sinks get overloaded. The other brake is depletion – non renewable resources eventually become harder and more expensive to get at. So too do renewable resources if they were harvested at too great a rate – eg fish stocks and timber from forests.

Although the popular media often unwittingly conveys the impression that humanity’s only or chief problem is climate change, there are other bio-physical limts – biodiversity collapse through pesticides and monocultures; desertification, drought and floods; sea level rise, deforestation; ocean acidification; collapse of fish stocks; toxicity dumped into the worlds oceans; depletion of oil, gas and coal; depletion of other minerals including minerals needed for batteries and clever technologies of a wind and solar powered economy.

All of these have the potential to make the practical organisation and management of life much more difficult in many cases leading to destitution and homelessness as well as lowering the quality of life in different kinds of ways – like the loss of beautiful landscapes and seascapes which can provide significant solace when they are still intact, but lead to grief when rendered ugly and degraded by development.

These are grounds to believe that there will be a growth of mental health crises as millions of people find they are having to wrestle with various forms of loss – tragedies involving premature loss of life; loss of security; loss of home and other forms of property; loss of financial security; loss of identity and of hopes and dreams; loss of faith; loss of relationships and support systems; loss of health and loss of future as more people face an increasingly precarious future.

The Limits to Growth crises were predicted to start in the first two decades of the 21st century – and “secular stagnation” arrived right on time…

Although the book The Limits to Growth was dismissed by economists and the mainstream as “disproved” when it appeared in the 1970s, it is important to recognise that the crisis described in that book was predicted to really kick in during the first two decades of the 21st century rather than in the 1970s and 1980s. Bearing in mind that climate change and all the other problems mentioned in the above paragraph are now occurring and, at the same time, economists are puzzling over a phenomenon of “secular stagnation” – the predictions of the LtG authors have proved remarkably prescient. (See the Post Growth Challenge by Tim Jackson at https://www.cusp.ac.uk/themes/aetw/tj_ee_post-growth-challenge/ and “Understanding the New Normal – The Challenge of Secular Stagnation” at https://www.cusp.ac.uk/themes/aetw/briefing-paper-no1/ )

To properly take in the message, it is helpful to understand the economy as an energy system. A modern economy can be most usefully thought of as a collection of machines, vehicles, infrastructures and equipment all of which are powered in some way – and mostly by fossil fuels or by electricity usually generated by burning fossil fuels. The enormous productive power of “developed” societies can be accounted for by the energy converted to run these machines. If we were to imagine all of this energy generated by the muscles of averagely fit people on pedal generators then a US lifestyle would require over 200 labourers and am average western european lifestyle would require the physical labour of over a hundred people.

Because of depletion however the fuel for all these machines is becoming much more expensive to find, extract, refine and deliver to their points of use (like petrol stations). To put it another way – a higher proportion of the energy from the coal, oil and gas that is extracted has to be used in the energy sector itself so that a lower proportion of what is extracted can be delivered to the rest of the economy.

One energy economist who understands these issues, Tim Morgan, calculates that the world energy cost of energy (EcoE) was a mere 2.9% in 1990 but had risen to 4.1% by the year 2000. By the time of the global financial crisis it was 5.6% and it is 8.1% now. So whereas in 1990 the energy sector delivered 97.1% of its product to the non energy part of the global economy now it is only 91.9%. It is this fall in “net energy” that probably most accounts for what economists have called “secular stagnation” – and it makes the recent growth of debt around the world difficult to manage. When incomes were growing there was more income to service interest and debts so the finance sector was more stable. In a stagnating and then contracting economy debt service become a serious problem. Because debt underpins the money system, a crisis threatens.

It is important to realise that the economic system is embodied and embedded in the material world – so all economic activity involves energy use, the use of land, the use the atmosphere and water, as well as other physical resources. Inevitably this has a variety of disruptive impacts on the plants and animals of the biosphere. Economists describe these disruptive impacts as “externalities” as if they are a unusual special case when, in fact, ecological disruption is the result of all economic activity and is ubiquitous. The scale of these impacts are now a threat to life on the planet. The complacency of economists is thus more than a technical or theoretical error – it blocks action on a serious threat to life on the planet. It is a kind of collective psychopathology – an idea that I explore later in this text. One economist who saw the light put it like this: “Anyone who believes that growth can continue for ever on a finite planet is either a madman or an economist” (Kenneth Boulding). Yet this collective insanity is taught in universities the world over.

Most economists and most policy makers are unprepared for what will come next and what will affect everyone. Secular stagnation is a slowing down of the growth process while at the same time the economy becomes more unstable. As systems slow the mechanisms that have stabilised them are weakened. Growth brings extra resources that can be used to solve problems – without growth problems become more intractable and economic and social systems takes longer to return to some kind of balance. When the economy starts to contract the problems become much more serious and a turning point is reached. It now looks as if that point has been reached with the covid 19 epidemic. Land use changes produced new configurations of species bringing animals, their viruses and humans into contact in ways that did not happen before.

We are entering an epoch of economic contraction at the same time as ecological disruption is leading to various kinds of disaster which are happening at increasing frequency and with impacts of increasing severity – flooding, drought, lost harvests, exhaustion of critical energy and materials, new diseases, financial system collapse. In each case an initial problem will have knock on consequences. Problems will cascade – for example, extreme weather events leading to breakdowns of power grids, leading to breakdowns of electronic payment systems, paralysis in supply and production systems.[1][2][3][4]

A major part of this generalised global crisis will be a collective crisis of mental health.

Continue to Part Two
Part Three

Endnotes

1. Pablo Servigne and Raphael Stevens How Everything can collapse. A Manual for our Times, Polity Books, April 2020
2. David Korowicz and Margaret Calantzopoulos Beyond Resilience: Global Systemic Risk, Systemic Failure, & Societal Responsiveness, November 2018;
3. Tim Clarke, End of the Oilocene – All Change!
4. Brian Davey, Credo, Feasta Books, 2015. Particularly Chapter 37 on Resilience and Collective Psychology – fast collapse or slow disintegration

Featured image taken from Melencolia 1 by Albrecht Dürer.