The warning signals flash briefly across our TV and computer screens; scattered headlines appear in our newspapers and magazines. The messages are disparate but unambiguous: ‘Natural disasters forced 32 million from their homes in 2012’; ‘Pollution threatens world’s poor’; ‘Why the world’s weather will be going to extremes’; ‘Inequality undermines democracy’; ‘Burnt-out planet or financial doom?’; ‘Record urban growth poses challenge’.

The facts on the ground tell a disturbing story, if we choose to listen. But life gets in the way – school, family, work, the daily battle to survive – so few of us make the time to connect the dots.

Until recently that included me. A few years ago I researched and edited a special issue of New Internationalist magazine on economic growth. I’d read widely on sustainability and dipped into the burgeoning field of ecological economics so it was a natural segue. Plus I’ve been a keen student of economics most of my adult life, wading through the business pages, gamely trying to keep up with the twists and turns of the global economy, tracking how the rich and powerful manipulate the system to their advantage. I’m an amateur, but even highly trained, professional economists rarely step outside the dominant paradigm. Combing through the critical literature on growth I began to pay attention to the big picture. It wasn’t long before the scattered bits of information began to gel into a coherent whole.

A clear line emerged, connecting the dominant growth model to world-shaking social and environmental issues: widespread habitat destruction, the loss of biodiversity, chaotic shifts in global weather, the steady depletion of natural resources, growing income inequality, the debt-laden and crisis-prone global economy. The more I read, the more I discovered all these things circled back to growth.

Then I began to think: maybe growth is not the solution to our problems, maybe it is the problem. And the reason we can’t see that is because we’re thoroughly immersed in a worldview that says the only way to prosperity and well-being is by growing and expanding the economy.

Forever.

But as the pioneering economist and systems analyst, Kenneth Boulding, once said: ‘Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.’ Nearly 50 years ago, Boulding saw the writing on the wall. In his 1966 essay, The Economics of the Coming Spaceship Earth, he described the ‘closed’ economy of the future ‘in which the earth has become a single spaceship, without unlimited reservoirs of anything, either for extraction or for pollution, and in which, therefore, man must find his place in a cyclical ecological system’.

A failure of imagination

Humankind as one part of a cyclical ecological system: that notion now seems both logical and obvious. We know intuitively that nature and culture are co-dependent. We are beginning to understand that we cannot destroy the planet without destroying ourselves. Yet the gap between understanding and action is hard to bridge. Inertia is a powerful barrier to change. The growth system continues to define the contours of our world. This is as much a failure of imagination as of policy.

A few years after Kenneth Boulding, another radical critique of economic orthodoxy surfaced in the best-selling Limits to Growth, a ground-breaking study that had the moxie to suggest that growth carried within it the seeds of its own destruction.

The idea that human enterprise was bounded by bio-physical limits was a wake-up call that provided fuel for an embryonic environmental movement. But it was soon forgotten in the giddy surge of deregulated markets that exploded in the 1980s. Barriers to the free flow of capital were eliminated; financial speculators ruled in a computerized world, holding entire countries to ransom. The ethos of unlimited consumerism easily migrated across borders in the digital era. Giant factory trawlers vacuumed the seas. Vast monocultures of genetically modified crops fed by petrochemicals replaced native grasslands and forests. Deep-pocketed mining companies expanded their restless search for resources from the Arctic to the Amazon. It was, in other words, growth as usual.

The argument that the resources of the Earth have a limit is self-evident. More to the point, as the environmental footprint analysis shows us, we are already past those limits, consuming irreplaceable natural capital at a rate that is jeopardizing the well-being of future generations. We have put growth ahead of sustainability to the extent that sustainability has become a marketing tool, an excuse for more of the same. We can no longer grow the economy and strive for sustainability. The two concepts are mutually exclusive.

Economic meltdown

The failure of the dominant growth model has been painfully evident since the global economy collapsed in 2008. Triggered by footloose investors, a weak regulatory structure, delusional bankers and an enormous US real-estate bubble, the whole creaking edifice teetered on the brink of disaster. The global credit web, the circulatory system of world capitalism, slipped into paralysis as major banks hunkered down and refused to lend to each other.

With the ghost of the Great Depression of the 1930s hovering in the background, politicians eventually saw the light and closed ranks. In Europe, North America, Australasia – even in China – governments injected massive liquidity into floundering markets, bailing out distressed banks and major corporations in a united-we-stand effort to save global capitalism from its own excesses. Millions of workers lost their jobs as companies cut costs.

In total nearly $16 trillion in public funds (mostly interest-free loans) were used to prop up the international financial system. The intervention helped to stave off immediate financial disaster in the shape of a severe global depression. Credit gradually started to move again, trade slowly resumed, corporations and banks once again became profitable. But it was a grudging kind of recovery.

Unemployment remains unacceptably high in most Western nations, with grievous social fallout. Poverty is increasing as the gap between rich and poor widens. Food banks are doing a booming business. Governments face massive budget deficits, mainly because of the billions in debt they took on to underwrite the economic recovery. Meanwhile, the corporate sector points to public debt as the source of our economic troubles. The irony is that the debt was first contracted to bail out those same banks and corporations. Instead the cry is for ‘balanced budgets’ to restore ‘market confidence’.

This is the medicine we supposedly must take to nurse the economy back to health: cuts in government services, sale of public assets, reduced pensions, redundancies, stagnant wages and tax breaks for the wealthy. Nearly half

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