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.
2 The 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
