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More ABC news at midday. This Program is Captioned Live THEME MUSIC Welcome to Big Ideas. Hi, I'm Steven Cannane. Think on this for a moment - persuaded how is it that we're regularly on things we don't need to spend money we don't have on people we don't care about to create impressions that won't last and who don't care about us? is a pathological system Our consumerist economy based on an addiction to novelty. Development Commissioner So says the UK's Sustainable Tim Jackson, for changing our growth-based economy whose new book makes the case for a planet with finite resources. to something more suitable to a packed house Tim Jackson was speaking in Melbourne. at the recent Deakin Lecture series is three things, really, So what I'm going to do three chunks of lecture.

the arguments in the book, And they sort of follow a little bit and they go a little bit like this. which I call the dilemma of growth. The first chunk is around something dilemma. It's nothing trivial. And it's, in my mind, a serious quite profoundly It's something we have to take

at the moment. as the place where we are it seems to me, If we fail to do that, to concepts of sustainability. we won't be doing any justice And our response to that - So that's part one. I call the dilemma of growth? what is our response to this thing Part two is acknowledging, in fact, growth falls short in certain ways. that our response to the dilemma of I want to invite you, us, to explore I want to explore - of the economic and social system the dynamics that is creating this dilemma. complex, it can be quite profound, And again, this can be quite in a simple way - simple-ish way - but I'll try to paraphrase for you

in very human terms. exactly how I see that dilemma those dynamics and that dilemma, And then, having established you would like me to talk, I want to talk, and I imagine about avenues for change. do things differently. Places where we could, in fact, A different kind of economic system. A different kind of prosperity. of society. Perhaps even a different kind with a very, very simple question. It's a journey that starts out expand on a finite planet? How can our economy continually And it ends up, actually, as an absolutely essential with what I regard introspection but possible quite philosophical indeed, about who we are as people. about the nature of our society and actually trying to get that spectrum, And I think it's worth into our conversations, if we can. from simplicity to depth through those three parts. So I hope you'll bear with me So let me start right at the top. a part of my dilemma of growth. I've already pitched, in a way, expanding subsystem - How is it possible for a continually let's call it the economy - let's call it the planet - of a finite system - its system goals? to continue to deliver Does it not carry within it -

over 40 years ago - as indeed The Club of Rome suggested the seeds of its own destruction, does it not carry within it at some level, that circle of continuing expansion if it cannot square within finite limits? of a dilemma, Or in terms of a very brutal horn

that growth is simply unsustainable? is it not the case at the moment is unsustainable, At least the growth that we have resources that are in finite supply, drawing as it does on material pushing against ecological limits constraining activity that are clearly

into the foreseeable future. and indeed, continuing to do that that growth is unsustainable - That horn of the dilemma - most profoundly, perhaps, was reinforced, I think, the Stockholm Resilience Centre by a report from at the end of last year, that came out in relation to safe operating space. that talked about where we are

the economy has to operate. The planetary boundaries under which And they pointed out, actually,

of economic activity that the existing scale beyond that safe operating space. is already, in several key places, is the most obvious example, Climate change they pointed to it quite clearly. interesting things, in fact, But perhaps one of the most as the single most important thing, is that climate change didn't appear past the operating space. the place where we were furthest by biodiversity loss. That position was taken

Rates of extinction of species background levels. 50 times greater than pre-industrial than that team of scientists believe and 10 times greater already as a safe operating space. could be considered What's the key lesson? of economic activity, That at this level the planetary boundaries. already we are outside of ecological overshoot. We are in a condition

an economy So how is it that we can consider it has done over the last 50 years, which, if it grows at the rates by the year 2100? will be 16 times bigger than it was just five decades ago. economy won't be a place And even this 80 times bigger which has delivered the poorest nations out of poverty and given them a hope, a chance, of a Western level of income.

If you wanted to achieve that bigger goal, the goal of global equity, you need an economy that is 200 times bigger than it was 50 years ago. The resource implications, the environmental implications of such an economy, are barely believable, really, and yet this is the default supposition for the direction of our economy. So my simple first horn of the dilemma that growth is unsustainable seems to be - at least in terms of what we have had so far in terms of our growth-based model - completely incontrovertible. It wouldn't be a dilemma, of course, if it didn't have another horn. So where does the other horn come from? Growth has delivered us good things. Let's start with that presupposition. It's improved life expectancy, it's improved health, it's improved education outcomes. It has delivered, and clearly needs to continue delivering, a better quality of life, particularly in the poorest nations. And there's a very interesting part of this analysis, which asks, "What do we see if we look at the data here? What do we see if we look at that relationship between growth and improved well-being - human well-being?" And actually, we see a very interesting story. It's a story that income growth matters profoundly in the poorest nations. That every increment in income growth delivers big returns in terms of life expectancy, infant mortality, maternal morbidity, participation in education, life satisfaction, happiness, and as incomes increase, that relationship weakens. So that in fact, by the time that you get to the richest nations of the world, you see very little return - very little bang for the buck, if you like, between increasing incomes and human development outcomes. But what that does is it begs the question how come we're still chasing growth in the richest nations in the world? How come this is our default model of economic progress in the developed nations of the world, in the richest places of the world? Why are we still addicted to growth? And this is a complex question,

but it can be summarised very simply in the second horn of my dilemma. Let's do away with growth, and let's have something instead. Let's call it degrowth. There is, in fact, a degrowth movement. It originated in France, where it is known by the much more savoury term of decroissance.

Almost sounds like something you'd want for breakfast. But there is a difficulty with decroissance and with degrowth, which is that under existing conditions, it's unstable. We don't know how to make economies work when they're not growing. In fact, we panic as soon as they show any signs of slowing down. And one of the basic dynamics behind this is the continual pursuit in capitalist economies of labour productivity. Let me just describe briefly how that goes. If you continually pursue labour productivity, you're doing more people every year the same number of - excuse me. You're doing more things with the same number of people each year. Next year you can do the same amount you did this year with fewer people. So if your economy isn't growing, then essentially labour productivity is pushing people out of work. Here is a very simple dynamic - continually pursuing labour productivity means doing more next year with fewer people and driving people out of work, unless what? Unless your economy is growing. Now, here is something that politicians understand, that growth equals jobs, that jobs equals votes. And any government that doesn't respond appropriately will find itself out of office. And here, I would submit, is a very real dilemma. This is not a trivial place to be. This is not a place where we have simple solutions. It's not a place where we can appeal to long-standing greens, "Tell us how to make this new economy work." It is, in fact, a place, as the financial crisis has shown us, of profound discomfort. And the need to engage, I would argue strenuously, with a very profound dilemma. Growth is unsustainable. Degrowth, at least as we know it, is unstable. So, we have that dilemma. We've known about it, in some form or another, for quite a long time. What is the political response? What is the answer here? What is it that's on the table that will allow us to escape from such a dilemma? And it is a very, very simple idea. It's a little technological, but it basically is an appeal to technology. It's an appeal to something called decoupling. What does decoupling mean? It means essentially separating out. Decoupling economic activity. We want our economies to be going up and up and up. Dollar value increases is a sign of the progress that we want, and it's essential for the stability of our economies. But suppose that we could do all of that economic activity more efficiently, suppose that we could dematerialise the content of that economic activity, suppose we could decarbonise it. Then could we not decouple economic activity from material impact? Go like this.

Spread that wedge in such a way that we can get under the bar, that we can reach our ecological limits by doing things with fewer materials while still keeping our economy going? It's a very, very appealing idea. It's in fact an idea that has a lot of basis in our understandings of modern economies because we prize the fact that we can do things more efficiently.

And in fact if we look at the data over the last two or three decades, we have done things more efficiently.

At the global level, carbon intensity per dollar of economic activity has fallen by about 1/3 over the last two to three decades. The trouble is that's not enough. In the same breath that you do things more efficiently,

you also do more of them. So you're in a continual struggle between efficiency and scale. Between technology and output. And if you ask yourself the question historically which, of efficiency and scale, has won the battle the data are abundantly clear.

It's absolutely obvious. Since 1990, even,

carbon dioxide emissions from fossil fuel consumption have increased by 40%. Output. Scale outweighed efficiency. Even with all our clever technology

and our efficiency built into the system, we did not achieve absolute reductions of any kind in carbon emissions. We went in the wrong direction. Now, it's a salutary point, and one of the responses to it could quite easily be well, we just didn't try hard enough. There wasn't enough effort put into that. So the next question you have to ask yourself is this, "How hard would we need to try in order to have - " let's just do this as a thought exercise -

"a world in the middle of this century of nine billion human beings, all aspiring to Western levels of income. All expecting those incomes to grow at 2% per annum - " this is the growth-based model that we're testing here - "and yet still achieving stabilisation targets for carbon?"

It's a pretty simple thought exercise. We prize those things - global equity, the growth-based model, our ecological limits. How far and how fast would technology have to run to achieve these goals?

I did a little scenario in the book, and the numbers work out something like this.

You would have to get the carbon intensity of economic activity down from an average of 770 grams of carbon per dollar, as it is at the moment, to less than six grams of carbon per dollar, 130-fold reduction. Have we ever achieved anything like it? The answer is no. Not by an order of magnitude. And then, of course, if the economy is still growing, then by the second half of the century

you actually need an economy that is taking carbon out of the atmosphere. The CO2 per dollar goes negative. A negative number means what?

It means instead of pumping carbon into the atmosphere relentlessly, we have a society that's pulling carbon out of the atmosphere. This is something that, when you think about it just for a moment, you realise we have no idea what this economy looks like.

We don't know what its resource base is, we don't know what its technology is, how its production is organised, we don't know what its products and services are, we don't know what life is like in such an economy. And yet this is the logical conclusion of a scenario that says,

"Yes, we can grow indefinitely, we can achieve global equity and we can meet our carbon targets."

Now, it seems to me that unless we want to find ourselves trapped in a form of magical thinking this is a point at which we need to ask ourselves quite seriously can this economy, can this society, really deliver us that kind of goal?

Or should we be thinking more profoundly about the underlying structures? So this is the point where I'm moving into part two of my argument, which is to explore those structures in more detail and this can be a slightly scary place to be

because it does draw on the importance of economics. I'm not here to overthrow economics, rather I'm here to say that our understanding of economic structure is vital and yet if we look closely at that understanding we find ourselves in a very uncomfortable place. Let me quickly run through with you the dynamics of that and then summarise in a slightly populist way

exactly what I think this means. It means primarily a system in which firms produce goods for households, that's us - people - and also provide us with incomes, that's fantastic, because we can spend it on more goods and services. It's called the circular flow of the economy. I want to draw attention to something within that structure, though, that turns out to be critical. It's the role of investment. Investment plays a profound role in protecting our productive assets. It also plays a profound role in chasing labour productivity, the dynamic that I spoke of before that draws us into the need for growth. It does some good things in the process. For example, it brings down prices, but in bringing down prices, it encourages people to buy more stuff. So it isn't just a circular flow, it begins to accelerate, at least economic value, through the system. It also accelerates resources and to understand this fully, we need to look at another of the features of investment in the modern economy. Joseph Schumpeter pointed this out in the early 20th century. He spoke of a process called "creative destruction". Creative destruction is the continual throwing over of old processes

The continuing throwing over of old products in favour of new ones. The production of novelty. incentivised by the pursuit by the firm of expanding markets and achieving profits. And this production of novelty, this is where it gets even more fascinating, in a sense, this production of novelty by firms, as it turns out, has a perfect counterpart in us, in people, in consumers, because it turns out, this may just be an unhappy feature of the way

that we're constructed as human beings, we can come back to that, it turns out we have something of an appetite for novelty. We love new stuff.

The consumption of novelty and the production of novelty offer, actually, a twin dynamic, locked together from the incentive of the firm to the incentive of us as human beings for novelty.

And it's worth paying just a little bit of attention to that incentive within us, that dynamic within us, the consumption of novelty. Where does it come from? There's clearly a sense and it's played out in lots of discussions in the sociology of consumption that we're playing games through new stuff around our status as human beings. We signal with material goods. It's not just about functionality, it's about social signals, it's about telling stories. It's about a language of goods that speaks to other people, to other social groups, to our own social groups, and even to ourselves about identity, about status, about meaning. It's a place where we use consumer goods,

essentially to establish the fact as Mary Douglas once beautifully put it

that we, as human beings, are helping to create the social world and find a credible place in it. It's a very humanising vision, actually, of our role as consumers, and a very important one to take seriously. It's important to note, too, that it's not just novelty, it's not just status-seeking behaviours that novelty gives. Novelty brings us a sense of hope. It brings us a sense of a newer, brighter, shinier world, a place where things are better today than they were yesterday and where they will be better tomorrow for our children than they were today. So the suggestion that I'm making to you is that there are elements within our social psychology that are actually driving and drawing us into this dynamic of growth.

It is a real engine of growth and it's not just growth of economic value. Because of this link between material things and social psychology, actually it becomes an engine of growth of material resources, it draws resources inexorably through it. It's a strange system in may ways. It's a system, for example, that runs on anxiety.

The anxiety of the firm is that capital will fly elsewhere if we don't engage in creative destruction. The anxiety of us, as people, very, very simple. Adam Smith talked about it nearly 200 years ago - the anxiety of living a life without shame. In Adam Smith's day, all that meant was a linen shirt for the want of which we wouldn't be seen in public without shame. Today, of course, it's a huge basket of goods and commodities

and we will use that economic system continually to feed that desire, that anxiety, for a life without shame. And we'll be encouraged to do so, for example, by the massive expansion of credit and debt. This is a point where this dynamic becomes incredibly useful in understanding how the financial crisis arose. Over a period of 15-20 years,

a massive monetary expansion was used to fuel consumption growth in the real economy, quite deliberately so. The architects of monetary expansion were explicit about that goal. But the upshot was, in fact,

and here's just some data from the UK which is not atypical but shouldn't be taken as the same across all countries. Consumer debt rose dramatically over the 15 years prior to the crash until it was, for three years in a row, above the GDP in the UK. And at the same time, personal savings crashed, they absolutely plummeted until they were below zero. Net personal saving was below zero just before the crash. Statistics, you'll tell me. What do they mean? OK, here's my paraphrase of what this means in practice. It means something like this. Here is the story of those years and our consumer society.

It's the story of us being encouraged, persuaded perhaps, to spend money we don't have on things we don't need to create impressions that won't last on people we don't care about. LAUGHTER Or, worse still... APPLAUSE

..who don't care about us. Now, what was that about when all we wanted to do, in fact, was to create a decent place for ourselves in the social world. It's a pathological system. It's a system which we can see our own psychology implicated in and it's a system that demands that we intervene in it. Well, OK, I'll give you a choice here. You don't absolutely have to intervene in it. You could, at this point, say - and I'm often tempted to say it myself - this is too difficult. This is a stacked deck of cards. It wasn't dealt evenly. There's no escape from this mix of economic structure and human psychology. I am going to find myself a small patch of land on a hillside somewhere, above the rising sea level, obviously. And I'm going to spend the rest of my energy living in harmony with nature. Some vegetables, a few goats, a couple of chickens. And I'll spend my time in nice artistic endeavour with my friends and family, occasionally - not too many of them

because that may not sustain a big community and, actually, as your thought train goes towards how many acres of land we would need

for these 9 billion people actually you're tempted to believe perhaps you should take some armaments with you to this hillside retreat. LAUGHTER Kalashnikov. AK-47 recommended armament of choice in these circumstances and you very quickly begin to realise actually this lifeboat strategy is not a very good one. There will be people clambering, barbarians at the gate

when actually the system goes down. And increasingly you find yourself drawn back, in fact, to saying, "What can we do, what can we do now? Is this really as impossible as it looks?" And this, really, in the last few minutes, is the third part of the argument in prosperity without growth. It says, in simple terms, that as you look at each of these impossibility theorems, as you ask yourself, "Well, do economies really have to be like that? Do politicians really have to respond like that? Is this really who I am as a human being?" in fact that deeper questioning, in every case, it seems to me, reveals that these impossibility theorems are not what they claim to be, that there are avenues of change, and that it is a responsibility on us, really, to explore those avenues of change. Very, very quickly, let me summarise a couple of things from that. The first, of course, is can we make sense of prosperity that isn't about rising incomes. And actually it doesn't take you very long, anyone with any knowledge of the literature, of philosophy, of social psychology, of economic history, of wisdom traditions, actually just asking people in the street tells you that prosperity does have a meaningful sense that isn't directly about income growth. What is it about? It's about the health of our families, it's about the trust of our friends, it's about the security of our communities, it's about participation in the life of society, it's about some sense, perhaps, of having a meaningful life and a hope for the future. And actually that hope for the future really matters - it matters that the vision of hope that we have given our children is no longer robust in the face of the constraints of the world and we desperately need, in fact, to bring ourselves back, to bring our eyes back, to a more robust sense of a real prosperity.

I like the idea, it simply convenes that sense, if you like, that prosperity is about our ability to flourish as human beings within the ecological limits of a finite planet.

And the limits question, to me, does a very profound thing. It says to me that my prosperity hangs on the prosperity of those around me

as theirs does on mine,

that it is, in fact, only meaningful to think of prosperity as a shared prosperity

and indeed as a lasting prosperity. To chase a vision of prosperity based on short-term returns actually is to give away the concept of prosperity. We still need material goods - that's absolutely clear. But what could we do? Could we do anything about the concept of participation in society, about the importance of social and psychological flourishing and, again, as soon as you ask yourself this question the answer leaps back at you - yes, one very simple idea, it's not by any means the only one, you don't even have to accept that it is the most important one but my job here, really, is to say, could we think differently about social and psychological flourishing, could we think differently about participation in society and immediately, actually, what comes back at you is yes. If participation is what matters, then are we thinking appropriately about public space, about the way we interact with each other as human beings? Are we thinking about what's happening to public space? Michael Sandel, in a Reith Lecture last year, talked about public space as "Sites for the cultivation of a common citizenship." Is there not an idea here, the revision, the re-building of public space and of social goods that brings us back towards that notion of shared prosperity? I would submit that there is and that is one of many good starting points for thinking about a different prosperity. I can't evade the question, of course, of the economy itself. What can we say about the impossibility theorem that economies have to work like this? I'll just point, very briefly, to what I see as a key role in that exploration and if you recall my discussion of the role of investment chasing high-return, short payback productive assets that expand consumer markets as the model of investment in the old economy, the model of investment in the new economy has to be radically different. I talk about a concept of ecological investment. I talk about targets for that investment in low-carbon transition,

in the protection of ecological assets, in the maintenance of social goods. Investing, in other words, in the idea that our society has some kind of future. This role for investment is absolutely vital. Investment, at the end of the day, is a relationship. The fundamental economic relationship between the present and the future, it's a place that we have to explore the role for another kind of investment very seriously and that will mean, yes, examining public funding, the role of the state, it will mean examining the structure and integrity of financial markets. But for goodness sake, if we're not looking at the structure and integrity of financial markets when the public purse has bailed out the financial sector to the tune of $7 trillion and almost saw the collapse of the entire system, then when are we ever going to do it? This is a time for reflection. It's a time for deep reflection. My very last philosophical point about our nature as human beings -

Am I asking humanity to change its nature? Am I saying we've got to change the course of evolution here? Isn't it the case that we are all, in fact, these consumers deeply implicated in this expanding material economy? And here, it seems to me, the message of hope is the strongest of all because there is no evidence in social psychology that we really are the narrow, materialistic, selfish, individualist consumers that the economy would have us believe that we are. Social psychology talks much more about tensions between selfish and other regarding behaviours. It talks about tensions between novelty-seeking and conservation and tradition. All of these poles of the tensions matter, they mattered in evolutionary terms. We evolved as much as social beings as we did as individual beings. We evolved as much in laying down the foundations for stable society as we did in continually pursuing novelty. But what we've done in the consumer economy is to favour, to privilege, to preference novelty-seeking, selfish behaviours because that's what we need to keep this system going. And my argument, far from saying that we have to change human nature, is broadly this - we have to free our imagination,

in fact, to think of ourselves, perhaps for the first time in 200 years,

as full, complete human beings, with those tensions, with those poles, with our concern for others, with our care for the environment. It's a place, in fact, in which it's possible once again to be creative as human beings. I will stop there because I know we started rather late and I would dearly love to engage in conversation. Let me just leave you with President Sarkozy launching the commission last year on the measurement of social progress and that launch he said the crisis, the financial crisis, doesn't just free us to imagine other models another future, another world, it obliges us to do so. I'm not entirely sure what we should make or indeed what Carla Bruni might make of Sarkozy imagining other models! LAUGHTER But I do think he has a point. This is not just the place for creative thought, it's a place for responsibility to create a prosperity that is worthy of the name and that returns to our children an idea of hope for the future. Thank you very much. APPLAUSE Well, I say stuff bold, original and comprehensive. I'll replace that with insightful, powerful and profound and I found myself here wearing that very tension - it's quite a traditional thing to do to wear a tie but I'm wearing quite a novel one so I wear that tension around my neck. We're going to be taking questions from the floor. It's 8:15 now. We started late. I would like to stop talking and invite Tim Flannery to the stage at exactly 8:35 and he will have a final wrap up and I believe Tim is able to stay for a bit if people want to question him afterwards. Bear in mind the man has travelled a long way. He only arrived here in Melbourne at 5:00 this morning. Could you please make your way to either the front microphone or to the back microphone which is just on the side there if you want to ask a question. As people do that, I realise I forgot to do something earlier and that is to thank the Vic EPA who are actually sponsoring this evening and have put their nice blue banners up there and I know that George is here in the audience as well so we should say thank you very much to the Vic EPA for sponsoring this lecture. Now I know that the man at the front has actually asked a question at a previous Deakins lecture.

That should not preclude you from asking another. However, it does mean I'm not going to you first. I'm going to the gentleman over there who's on the back microphone and if others want to come forward, do please do so. And the rules are it's a question, it's pertinent to what we've just heard, no speeches. My name's Phil. I'm from Geelong. My question, Tim, is about the transition town movement. For those who don't know, a man called Rob Hopkins started the movement in the UK IN 2006. It's a movement about recognising our sustainable future is based on re-localising our food and all the other things that we need to live and reconnecting communities with the source of their well-being. What role do you see the Transition Movement having now that it is a worldwide phenomenon.

What role do you think they have in bringing about prosperity without growth? I think they have a very important role. Actually the Transition Town movement is one example of numerous attempts, really, to, at the community level, to live more sustainably, to work more sustainably,

to build communities that are more resilient. And to my mind, these are incredibly interesting places for social learning. They're very important at this point in time because the truth is we don't quite know how these kinds of communities are going to work. We do know that we have the best chance of creating resilient communities if we engage, in fact, in learning around this sort of initiative at the moment. And my research group at the University of Surrey has spent quite a lot of time exploring those kinds of local, community-based initiatives and they're very clear findings. Amongst those findings are that people in these communities create very different narratives about meaning in their lives. They hold very different and often much stronger environmental values. They can lead meaningful lives in this context. All of these things are good and they even sometimes have lower footprints. There's a difficult message though, which is that quite often the overriding sense in these communities is one of struggle because in the process of creating change at the community level inevitably you come up against bigger structures, structures that actually do require intervention at policy level, at government level at bigger level -

the intervention has to reach into the business community

so I see this as incredibly important initiatives showing us where change is possible at the local level and absolutely vital in creating community resilience. But the biggest message for me from what's happening so far is how much needs to be done at policy level to allow these initiatives to flourish. Thank you. Could I ask one more question and that's about -

No, you can't. It's one question per person. Fellow at the front. Thank you. Good evening. Thank you, Tim.

My name is Richard. I'm from Melbourne. Look, I haven't read your book and I apologise for my ignorance on your background. I'm not sure if you are in liberal arts or social sciences. My question is in relation

to the application of your philosophy, your tenets. To your knowledge, in terms of the question you put up in terms of stability of economy, has there been any modelling done to establish what the forcing functions will do in one direction or another

to see what we can do? I agree with your philosophy and we've been waiting for a book like this, I guess, certainly what you've said, for a long time. But what is it that we can do if we change those forcing functions than what they could be - changing our currency, for example, looking at how we can normalise the currency to the actual cost of energy, for example, or resources or etc? So the question is in relation to your knowledge of what modelling and simulation has been done to look at stability. Yeah, that's a very important question. And I apologise for you now being able to tell which discipline I come from. It is a slightly eclectic background. I am a mathematician, actually, my original discipline, but as Kenneth Balding once said, mathematics brought the rigor to economics but it also brought the mortis. LAUGHTER So I'm always wary of saying that economic modelling will get us out of the problem but I absolutely agree with your fundamental point that we need something which will point us the way.

How are we going to create a stable, an idea of a stable macro economy that doesn't rely on increasing consumption growth. This is - and I point to this very clearly in the book - I identify a few initiatives, and there are remarkably few of them. which have attempted to address this question. One of them is some modelling work that was done in Canada by Peter Victor another is the work by Simone D'Alessandro and their colleagues in Italy and the usefulness of these kinds of exercises right on the margins of formal economics at this point in time to me is absolutely paramount. We do not have a fully founded, fully functional macro economics of sustainability and we desperately, desperately need one. I would like a small corner of treasury, any treasury, anywhere, given over not to the conventional fiscal balancing of the growth-based economy but exploring our options. This is about diversification, it's about delivering a sense of resilience

in the face of the fragility of economics

as we currently understand it. It's just precaution, it's common basic sense to engage in that. And there's a call for that in the book, there's suggestions the avenues that it will take us and there's some examples of pioneers in that field. Tim, just for me to intervene,

do you think we have the very initial sort of start of that with five-year carbon budgets in the UK. I think the five-year carbon budgets are very interesting actually, and the conversations that I've had with the Treasury in the UK suggest - well, the response back to the questions about economy in relation to climate change are something along these lines - "Yes, we may have to think about that." Thanks very much for that. But now we have climate change legislation in place.

Now we have carbon budgets. We didn't have that a few years ago.

Now we actually have to think about delivering those carbon budgets so when we've had a think about that

maybe we'll come back to the question of the economy. And I think actually if we stick with the carbon budgets inevitably we'll come back to the question of the economy but I would like to short-circuit the political intransigence which suggests we have the legislation in place, let's wait and see how it transpires because it seems to me we already have the understanding that we need a different kind of economics so that's the message that I'm trying to push within Treasury. Thank you, Tim. Pardon my indulgence. The next question is a gentleman wearing a dark hat by the back microphone. If you could share your name with us, please? Bruce McNeal. Ah, it's a pretty pragmatic sort of question - in Victoria there is a requirement for these $5,000 - 5,000 new jobs to be created per month in order to maintain the current pros- current employment level. How do you conceive that there might be some way of, kind of... ..engaging in a kind of limiting process for those kind of...expectations, I suppose? Yep. That's a really important question.

The one thing I would have to say, and I hope I said before, but maybe not quite strongly enough, is that jobs matter. Meaningful participation in society matters and paid employment is one of the ways in which we achieve that. Now, there are radical ways to think about restructuring work and those kinds of calls for a different sense of the relationship between paid employment and unpaid employment, the value of unpaid labour, engaging people in society in meaningful ways, are all very important things to think about. But the fundamental question that you're asking, which is on the politician's mind, is how do we square this relationship between jobs and growth? And there are basically only two ways of doing this - in the arithmetic that I sketched out to you,

which was of an increasing labour productivity, can only employ people for as long as the economy grows. That difficult dynamic. And the two ways out of that dilemma are - firstly to say, perhaps what we should be doing is accepting the labour productivity gains and working less. This would require sharing available work and you'd need work-time policies to create that but actually this avenue is really interesting because it was the thoughts of some of the early fathers of macro-economics, Keynes himself, for example saw the chasing of labour productivity as a process that would ultimately lead to a place where our economic needs of the first kind, as he described them, were broadly met and that we could give over our lives to the more meaningful aspects of participation, of our family, our friends and our quality of life outside the market. And that's a very interesting place to think about development. What it does do though, is it places an onus on schemes that provide flexibility in jobs, schemes that allow jobs - work to be shared, schemes that cut down the sector of the population which increasingly works too hard and has no leisure time and builds up those parts of the economy where more flexible time, more part-time work and more sharing of the resources of paid employment is available. There is though another really interesting response to this, is do I need to accept this labour-productivity dynamic? Is this really the direction that the economy's going to go on for ever and ever, doing more with fewer people? Does it make sense, for example, in a service-based economy

to have my doctor seeing 1,000 more patients next year than she saw this year, to have my yoga teacher having more people crammed into her village hall to give her yoga classes, to have leisure and recreation consistently over-subscribed just so that we can chase labour productivity? It seems to me - and, in fact, again there's economic precedent for this -

that there's a very useful exploration of productivity itself - does it make sense to chase labour out of jobs where it's the human labour input that provides the quality of that work? Or should we be supporting, in fact, exactly those sectors of the economy which bring people into a form of paid employment that contributes to human flourishing. And my argument, of course, is that we should open up that possibility, that we should explore both of those avenues. But it is a very important question. Gentleman with the silver hair. Oh, "the silver hair," I thank you very much. LAUGHTER

My name's Ron, I've a very simple question - do you think we should do something about advertising? It seems to me that we get a lot of our values from advertising that our - SOME APPLAUSE We're being encouraged to be anxious and to alleviate that anxiety by buying high-status goods and all that nonsense.

Now, you can develop wisdom,

or do you think there should be some form of censorship on advertising which will give us a measure of - move our values in the right direction? Um, advertising clearly plays a role in that fetishisation of novelty and I think, to me, it's absolutely clear that advertising is one of the places that one should intervene.

At the end of Prosperity Without Growth is a whole chapter that is delivered in fact to policy mechanisms. Policy makers increasingly say to me "Yes, but what can I do on Monday?" And in Chapter 11 there are all sorts of things that could be done or you could start thinking about not just on Monday but even on Wednesday evening or Wednesday morning or whatever it is. At this point, in whichever part of the world you're in. There are, there is a whole spectrum of political interventions and it seems absolutely clear to me that advertising, which has perverse social outcomes, and yet is a tax-deductable interim expenditure which is incentivised within the system

and creating all sorts of zero-sum games is a legitimate place to question what we're doing in creating the signals for a consumer society. In my view we have to broaden it out, we have to say - we have to talk about media standards, about trading standards, about trade policy, we have to talk about culture and the way that we perpetuate culture, we have to talk about the performance signals that governments send out to people to continually to be consumers. In the face of a recession, the ubiquitous call for everyone everywhere to go out shopping at the very point in time

in which every sensible person wants to save their income and look to future security. No, the system demands that we go out and spend.

John Maynard Keynes called it "the paradox of thrift," I call it the perverseness of economics, freakonomics, the place where economics actually is driving us in perverse directions and there's grounds for looking at all of these things. I don't want to stand here and say to you that that massive technological challenge of 130-fold reduction in carbon intensity, an economy that's pulling carbon out of the atmosphere rather than pushing into it, is an impossibility. I'm not going to stand here and say we couldn't absolutely create that challenge but it seems to me that if we want to avoid that sense of magical thinking we do have a real responsibility now to ask serious questions about our likelihood to achieve that, particularly if we're trying to achieve it without looking at the underlying structure.

To me, it is no longer credible that we can think of this growth-based dynamic with its social logic of consumerism as a place where it's possible to deliver

anything other than more of the same, more material aspiration, increasingly unsustainable throughput and no progress at all towards carbon targets or protection of biodiversity. So, at the very least, let's be honest enough, let's have enough political honesty to have this conversation. Prosperity Without Growth, at the end of the day, was an invitation to a conversation, was an attempt to say "Let's just have a little bit of space here to reflect, to step back, to have a corner of Treasury, to have places where at last it's possible and legitimate to put this question on the table because it could turn out to be, in fact, the most important question of our times." APPLAUSE British sustainability guru Tim Jackson and how we might achieve prosperity without growth. That's all for today's Big Ideas. Hope you enjoyed it. You can catch us Tuesdays and Wednesdays at 11am on ABC1.

But there's no need to wait till then. For more of the best talks and lectures from home and around the world, head to our website: Or better still, make us your home page. I'm Steve Cannane. I'll see you next time. Closed Captions by CSI

This Program is Captioned


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