English-Video.net comment policy

The comment field is common to all languages

Let's write in your language and use "Google Translate" together

Please refer to informative community guidelines on TED.com

TEDGlobal 2010

Tim Jackson: An economic reality check

Filmed
Views 907,152

As the world faces recession, climate change, inequity and more, Tim Jackson delivers a piercing challenge to established economic principles, explaining how we might stop feeding the crises and start investing in our future.

- Economist
Tim Jackson studies the links between lifestyle, societal values and the environment to question the primacy of economic growth. Full bio

I want to talk to you today about prosperity,
00:15
about our hopes
00:18
for a shared and lasting prosperity.
00:20
And not just us,
00:23
but the two billion people worldwide
00:25
who are still chronically undernourished.
00:27
And hope actually is at the heart of this.
00:30
In fact, the Latin word for hope
00:33
is at the heart of the word prosperity.
00:35
"Pro-speras," "speras," hope --
00:37
in accordance with our hopes and expectations.
00:40
The irony is, though,
00:43
that we have cashed-out prosperity
00:45
almost literally in terms of money and economic growth.
00:48
And we've grown our economies so much
00:51
that we now stand
00:53
in a real danger
00:55
of undermining hope --
00:57
running down resources, cutting down rainforests,
01:00
spilling oil into the Gulf of Mexico,
01:03
changing the climate --
01:06
and the only thing that has actually
01:08
remotely slowed down the relentless rise
01:10
of carbon emissions over the last two to three decades
01:12
is recession.
01:15
And recession, of course,
01:17
isn't exactly a recipe for hope either,
01:19
as we're busy finding out.
01:21
So we're caught in a kind of trap.
01:23
It's a dilemma, a dilemma of growth.
01:25
We can't live with it; we can't live without it.
01:27
Trash the system or crash the planet --
01:29
it's a tough choice; it isn't much of a choice.
01:32
And our best avenue of escape from this actually
01:35
is a kind of blind faith
01:38
in our own cleverness and technology and efficiency
01:41
and doing things more efficiently.
01:44
Now I haven't got anything against efficiency.
01:46
And I think we are a clever species sometimes.
01:48
But I think we should also just check the numbers,
01:52
take a reality check here.
01:55
So I want you to imagine a world,
01:57
in 2050, of around nine billion people,
01:59
all aspiring to Western incomes,
02:02
Western lifestyles.
02:04
And I want to ask the question --
02:07
and we'll give them that two percent hike in income, in salary each year as well,
02:09
because we believe in growth.
02:12
And I want to ask the question:
02:14
how far and how fast would be have to move?
02:16
How clever would we have to be?
02:19
How much technology would we need in this world
02:21
to deliver our carbon targets?
02:23
And here in my chart --
02:25
on the left-hand side is where we are now.
02:27
This is the carbon intensity of economic growth
02:30
in the economy at the moment.
02:32
It's around about 770 grams of carbon.
02:34
In the world I describe to you,
02:37
we have to be right over here at the right-hand side
02:39
at six grams of carbon.
02:41
It's a 130-fold improvement,
02:43
and that is 10 times further and faster
02:45
than anything we've ever achieved in industrial history.
02:47
Maybe we can do it, maybe it's possible -- who knows?
02:50
Maybe we can even go further
02:52
and get an economy that pulls carbon out of the atmosphere,
02:54
which is what we're going to need to be doing
02:57
by the end of the century.
02:59
But shouldn't we just check first
03:01
that the economic system that we have
03:04
is remotely capable of delivering
03:07
this kind of improvement?
03:09
So I want to just spend a couple of minutes on system dynamics.
03:11
It's a bit complex, and I apologize for that.
03:14
What I'll try and do, is I'll try and paraphrase it
03:16
is sort of human terms.
03:18
So it looks a little bit like this.
03:20
Firms produce goods for households -- that's us --
03:23
and provide us with incomes,
03:25
and that's even better, because we can spend those incomes
03:27
on more goods and services.
03:30
That's called the circular flow of the economy.
03:32
It looks harmless enough.
03:35
I just want to highlight one key feature of this system,
03:37
which is the role of investment.
03:39
Now investment constitutes
03:41
only about a fifth of the national income
03:43
in most modern economies,
03:45
but it plays an absolutely vital role.
03:47
And what it does essentially
03:49
is to stimulate further consumption growth.
03:51
It does this in a couple of ways --
03:54
chasing productivity,
03:56
which drives down prices and encourages us to buy more stuff.
03:58
But I want to concentrate
04:01
on the role of investment
04:03
in seeking out novelty,
04:05
the production and consumption of novelty.
04:07
Joseph Schumpeter called this
04:10
"the process of creative destruction."
04:12
It's a process of the production and reproduction of novelty,
04:15
continually chasing expanding consumer markets,
04:17
consumer goods, new consumer goods.
04:20
And this, this is where it gets interesting,
04:22
because it turns out that human beings
04:24
have something of an appetite for novelty.
04:27
We love new stuff --
04:30
new material stuff for sure --
04:32
but also new ideas, new adventures,
04:34
new experiences.
04:36
But the materiality matters too,
04:38
because in every society
04:40
that anthropologists have looked at,
04:43
material stuff
04:45
operates as a kind of language --
04:47
a language of goods,
04:49
a symbolic language
04:51
that we use to tell each other stories --
04:53
stories, for example,
04:55
about how important we are.
04:57
Status-driven, conspicuous consumption
04:59
thrives from the language
05:02
of novelty.
05:05
And here, all of a sudden,
05:07
we have a system
05:09
that is locking economic structure with social logic --
05:11
the economic institutions, and who we are as people, locked together
05:14
to drive an engine of growth.
05:17
And this engine is not just economic value;
05:20
it is pulling material resources
05:22
relentlessly through the system,
05:25
driven by our own insatiable appetites,
05:28
driven in fact by a sense of anxiety.
05:31
Adam Smith, 200 years ago,
05:34
spoke about our desire
05:36
for a life without shame.
05:38
A life without shame:
05:40
in his day, what that meant was a linen shirt,
05:42
and today, well, you still need the shirt,
05:45
but you need the hybrid car,
05:47
the HDTV, two holidays a year in the sun,
05:50
the netbook and iPad, the list goes on --
05:53
an almost inexhaustible supply of goods,
05:56
driven by this anxiety.
05:58
And even if we don't want them,
06:00
we need to buy them,
06:02
because, if we don't buy them, the system crashes.
06:04
And to stop it crashing
06:06
over the last two to three decades,
06:08
we've expanded the money supply,
06:10
expanded credit and debt,
06:12
so that people can keep buying stuff.
06:14
And of course, that expansion was deeply implicated in the crisis.
06:16
But this -- I just want to show you some data here.
06:19
This is what it looks like, essentially,
06:21
this credit and debt system, just for the U.K.
06:23
This was the last 15 years before the crash,
06:25
and you can see there, consumer debt rose dramatically.
06:28
It was above the GDP for three years in a row
06:31
just before the crisis.
06:33
And in the mean time, personal savings absolutely plummeted.
06:35
The savings ratio, net savings,
06:38
were below zero in the middle of 2008,
06:40
just before the crash.
06:42
This is people expanding debt, drawing down their savings,
06:44
just to stay in the game.
06:47
This is a strange, rather perverse, story,
06:50
just to put it in very simple terms.
06:53
It's a story about us, people,
06:55
being persuaded
06:59
to spend money we don't have
07:01
on things we don't need
07:03
to create impressions that won't last
07:05
on people we don't care about.
07:07
(Laughter)
07:09
(Applause)
07:11
But before we consign ourselves to despair,
07:15
maybe we should just go back and say, "Did we get this right?
07:18
Is this really how people are?
07:20
Is this really how economies behave?"
07:22
And almost straightaway
07:24
we actually run up against a couple of anomalies.
07:26
The first one is in the crisis itself.
07:29
In the crisis, in the recession, what do people want to do?
07:31
They want to hunker down, they want to look to the future.
07:34
They want to spend less and save more.
07:37
But saving is exactly the wrong thing to do
07:40
from the system point of view.
07:42
Keynes called this the "paradox of thrift" --
07:44
saving slows down recovery.
07:46
And politicians call on us continually
07:48
to draw down more debt,
07:51
to draw down our own savings even further,
07:53
just so that we can get the show back on the road,
07:55
so we can keep this growth-based economy going.
07:57
It's an anomaly,
07:59
it's a place where the system actually is at odds
08:01
with who we are as people.
08:03
Here's another one -- completely different one:
08:06
Why is it
08:08
that we don't do the blindingly obvious things we should do
08:10
to combat climate change,
08:12
very, very simple things
08:14
like buying energy-efficient appliances,
08:16
putting in efficient lights, turning the lights off occasionally,
08:18
insulating our homes?
08:20
These things save carbon, they save energy,
08:22
they save us money.
08:24
So is it that, though they make perfect economic sense,
08:27
we don't do them?
08:30
Well, I had my own personal insight into this
08:32
a few years ago.
08:34
It was a Sunday evening, Sunday afternoon,
08:36
and it was just after --
08:38
actually, to be honest, too long after --
08:40
we had moved into a new house.
08:43
And I had finally got around to doing some draft stripping,
08:45
installing insulation around the windows and doors
08:48
to keep out the drafts.
08:50
And my, then, five year-old daughter
08:52
was helping me in the way that five year-olds do.
08:55
And we'd been doing this for a while,
08:58
when she turned to me very solemnly and said,
09:01
"Will this really keep out the giraffes?"
09:05
(Laughter)
09:08
"Here they are, the giraffes."
09:10
You can hear the five-year-old mind working.
09:12
These ones, interestingly, are 400 miles north of here
09:14
outside Barrow-in-Furness in Cumbria.
09:17
Goodness knows what they make of the Lake District weather.
09:20
But actually that childish misrepresentation
09:23
stuck with me,
09:26
because it suddenly became clear to me
09:28
why we don't do the blindingly obvious things.
09:31
We're too busy keeping out the giraffes --
09:33
putting the kids on the bus in the morning,
09:35
getting ourselves to work on time,
09:37
surviving email overload
09:40
and shop floor politics,
09:42
foraging for groceries, throwing together meals,
09:44
escaping for a couple of precious hours in the evening
09:47
into prime-time TV
09:50
or TED online,
09:52
getting from one end of the day to the other,
09:54
keeping out the giraffes.
09:57
(Laughter)
09:59
What is the objective?
10:01
"What is the objective of the consumer?"
10:03
Mary Douglas asked in an essay on poverty
10:06
written 35 years ago.
10:09
"It is," she said,
10:11
"to help create the social world
10:14
and find a credible place in it."
10:17
That is a deeply humanizing
10:20
vision of our lives,
10:23
and it's a completely different vision
10:25
than the one that lies at the heart
10:28
of this economic model.
10:31
So who are we?
10:33
Who are these people?
10:35
Are we these novelty-seeking, hedonistic,
10:38
selfish individuals?
10:40
Or might we actually occasionally be
10:43
something like the selfless altruist
10:46
depicted in Rembrandt's lovely, lovely sketch here?
10:49
Well psychology actually says
10:52
there is a tension --
10:54
a tension between self-regarding behaviors
10:56
and other regarding behaviors.
10:59
And these tensions have deep evolutionary roots,
11:01
so selfish behavior
11:04
is adaptive in certain circumstances --
11:06
fight or flight.
11:08
But other regarding behaviors
11:10
are essential to our evolution
11:12
as social beings.
11:14
And perhaps even more interesting from our point of view,
11:16
another tension between novelty-seeking behaviors
11:18
and tradition or conservation.
11:21
Novelty is adaptive when things are changing
11:25
and you need to adapt yourself.
11:27
Tradition is essential to lay down the stability
11:29
to raise families and form cohesive social groups.
11:32
So here, all of a sudden,
11:35
we're looking at a map of the human heart.
11:37
And it reveals to us, suddenly,
11:40
the crux of the matter.
11:43
What we've done is we've created economies.
11:45
We've created systems,
11:47
which systematically privilege, encourage,
11:49
one narrow quadrant
11:52
of the human soul
11:54
and left the others unregarded.
11:56
And in the same token, the solution becomes clear,
11:59
because this isn't, therefore,
12:02
about changing human nature.
12:04
It isn't, in fact, about curtailing possibilities.
12:06
It is about opening up.
12:09
It is about allowing ourselves the freedom
12:11
to become fully human,
12:13
recognizing the depth and the breadth
12:15
of the human psyche
12:17
and building institutions
12:19
to protect Rembrandt's fragile altruist within.
12:21
What does all this mean for economics?
12:26
What would economies look like
12:29
if we took that vision of human nature
12:31
at their heart
12:33
and stretched them
12:35
along these orthogonal dimensions
12:37
of the human psyche?
12:39
Well, it might look a little bit
12:41
like the 4,000 community-interest companies
12:43
that have sprung up in the U.K. over the last five years
12:45
and a similar rise in B corporations in the United States,
12:48
enterprises
12:51
that have ecological and social goals
12:53
written into their constitution
12:55
at their heart --
12:57
companies, in fact, like this one, Ecosia.
12:59
And I just want to, very quickly, show you this.
13:02
Ecosia is an Internet search engine.
13:04
Internet search engines work
13:06
by drawing revenues from sponsored links
13:08
that appear when you do a search.
13:10
And Ecosia works in pretty much the same way.
13:12
So we can do that here --
13:16
we can just put in a little search term.
13:18
There you go, Oxford, that's where we are. See what comes up.
13:20
The difference with Ecosia though
13:23
is that, in Ecosia's case,
13:25
it draws the revenues in the same way,
13:27
but it allocates
13:30
80 percent of those revenues
13:32
to a rainforest protection project in the Amazon.
13:35
And we're going to do it.
13:37
We're just going to click on Naturejobs.uk.
13:39
In case anyone out there is looking for a job in a recession,
13:41
that's the page to go to.
13:43
And what happened then was
13:45
the sponsor gave revenues to Ecosia,
13:47
and Ecosia is giving 80 percent of those revenues
13:50
to a rainforest protection project.
13:52
It's taking profits from one place
13:54
and allocating them
13:56
into the protection of ecological resources.
13:58
It's a different kind of enterprise
14:00
for a new economy.
14:02
It's a form, if you like,
14:04
of ecological altruism --
14:06
perhaps something along those lines. Maybe it's that.
14:08
Whatever it is,
14:11
whatever this new economy is,
14:13
what we need the economy to do, in fact,
14:16
is to put investment
14:19
back into the heart of the model,
14:21
to re-conceive investment.
14:23
Only now, investment
14:25
isn't going to be
14:27
about the relentless and mindless
14:29
pursuit of consumption growth.
14:31
Investment has to be a different beast.
14:33
Investment has to be,
14:36
in the new economy,
14:38
protecting and nurturing
14:40
the ecological assets on which our future depends.
14:42
It has to be about transition.
14:45
It has to be investing in low-carbon technologies
14:47
and infrastructures.
14:49
We have to invest, in fact,
14:51
in the idea of a meaningful prosperity,
14:54
providing capabilities
14:57
for people to flourish.
15:00
And of course, this task has material dimensions.
15:03
It would be nonsense to talk about people flourishing
15:05
if they didn't have food, clothing and shelter.
15:08
But it's also clear that prosperity goes beyond this.
15:10
It has social and psychological aims --
15:13
family, friendship,
15:16
commitments, society,
15:18
participating in the life of that society.
15:20
And this too
15:23
requires investment,
15:25
investment -- for example, in places --
15:28
places where we can connect,
15:30
places where we can participate,
15:32
shared spaces,
15:34
concert halls, gardens,
15:36
public parks,
15:38
libraries, museums, quiet centers,
15:40
places of joy and celebration,
15:42
places of tranquility and contemplation,
15:45
sites for the "cultivation
15:48
of a common citizenship,"
15:50
in Michael Sandel's lovely phrase.
15:53
An investment -- investment, after all, is just such a basic economic concept --
15:56
is nothing more nor less
16:00
than a relationship
16:02
between the present and the future,
16:04
a shared present and a common future.
16:06
And we need that relationship to reflect,
16:09
to reclaim hope.
16:11
So let me come back, with this sense of hope,
16:15
to the two billion people
16:18
still trying to live each day
16:20
on less than the price of a skinny latte
16:22
from the cafe next door.
16:25
What can we offer those people?
16:27
It's clear that we have a responsibility
16:29
to help lift them out of poverty.
16:31
It's clear that we have a responsibility
16:33
to make room for growth
16:35
where growth really matters in those poorest nations.
16:37
And it's also clear that we will never achieve that
16:40
unless we're capable of redefining
16:43
a meaningful sense of prosperity in the richer nations,
16:46
a prosperity that is more meaningful
16:49
and less materialistic
16:51
than the growth-based model.
16:53
So this is not just
16:55
a Western post-materialist fantasy.
16:57
In fact, an African philosopher wrote to me,
17:00
when "Prosperity Without Growth" was published,
17:03
pointing out the similarities
17:05
between this view of prosperity
17:07
and the traditional African concept of ubuntu.
17:09
Ubuntu says, "I am
17:12
because we are."
17:15
Prosperity is a shared endeavor.
17:17
Its roots are long and deep --
17:20
its foundations, I've tried to show,
17:22
exist already, inside each of us.
17:24
So this is not about
17:27
standing in the way of development.
17:29
It's not about
17:31
overthrowing capitalism.
17:33
It's not about
17:35
trying to change human nature.
17:37
What we're doing here
17:39
is we're taking a few simple steps
17:41
towards an economics fit for purpose.
17:43
And at the heart of that economics,
17:46
we're placing a more credible,
17:49
more robust,
17:51
and more realistic vision
17:53
of what it means to be human.
17:56
Thank you very much.
17:59
(Applause)
18:01
Chris Anderson: While they're taking the podium away, just a quick question.
18:10
First of all, economists aren't supposed to be inspiring,
18:13
so you may need to work on the tone a little.
18:16
(Laughter)
18:18
Can you picture the politicians ever buying into this?
18:20
I mean, can you picture
18:22
a politician standing up in Britain and saying,
18:24
"GDP fell two percent this year. Good news!
18:27
We're actually all happier, and a country's more beautiful,
18:30
and our lives are better."
18:32
Tim Jackson: Well that's clearly not what you're doing.
18:34
You're not making news out of things falling down.
18:36
You're making news out of the things that tell you that we're flourishing.
18:38
Can I picture politicians doing it?
18:41
Actually, I already am seeing a little bit of it.
18:43
When we first started this kind of work,
18:45
politicians would stand up, treasury spokesmen would stand up,
18:48
and accuse us of wanting to go back and live in caves.
18:50
And actually in the period
18:53
through which we've been working over the last 18 years --
18:55
partly because of the financial crisis
18:57
and a little bit of humility in the profession of economics --
18:59
actually people are engaging in this issue
19:02
in all sorts of countries around the world.
19:05
CA: But is it mainly politicians who are going to have to get their act together,
19:07
or is it going to be more just civil society and companies?
19:10
TJ: It has to be companies. It has to be civil society.
19:13
But it has to have political leadership.
19:16
This is a kind of agenda,
19:19
which actually politicians themselves
19:21
are kind of caught in that dilemma,
19:23
because they're hooked on the growth model themselves.
19:25
But actually opening up the space
19:27
to think about different ways of governing,
19:29
different kinds of politics,
19:31
and creating the space
19:33
for civil society and businesses to operate differently --
19:35
absolutely vital.
19:37
CA: And if someone could convince you
19:39
that we actually can make the -- what was it? --
19:41
the 130-fold improvement in efficiency,
19:43
of reduction of carbon footprint,
19:45
would you then actually like that picture of economic growth
19:47
into more knowledge-based goods?
19:50
TJ: I would still want to know that you could do that
19:52
and get below zero by the end of the century,
19:54
in terms of taking carbon out of the atmosphere,
19:56
and solve the problem of biodiversity
19:58
and reduce the impact on land use
20:00
and do something about the erosion of topsoils and the quality of water.
20:02
If you can convince me we can do all that,
20:05
then, yes, I would take the two percent.
20:07
CA: Tim, thank you for a very important talk. Thank you.
20:11
(Applause)
20:14

▲Back to top

About the speaker:

Tim Jackson - Economist
Tim Jackson studies the links between lifestyle, societal values and the environment to question the primacy of economic growth.

Why you should listen

Tim Jackson currently serves as the economics commissioner on the UK government's Sustainable Development Commission and is director of  RESOLVE -- the Research group on Lifestyles, Values and Environment. After five years as Senior Researcher at the Stockholm Environment Institute, he bcame the Professor of Sustainable Development at University of Surrey, and was the first person to hold that title at a UK university. He founded RESOLVE in May 2006 as an nter-disciplinary collaborationacross four areas -- CES, psychology, sociology and economics -- aiming to develop an understanding of the links between lifestyle, societal values and the environment.


He is also the author of the influential book Prosperity Without Growth. He serves as chair to the 'New Energy Solutions' Advisory Board for Danish investment company BankInvest and is associate researcher on a Templeton Foundation project on 'The Pursuit of Happiness.' Tim is also an award-winning playwright, and his environmental drama The Cry of the Bittern won a Public Awareness of Science Drama Award in 1998. His most recent play, Variations, won the 2007 Grand Prix Marulic and is longlisted for the 2008 Sony Drama award.

More profile about the speaker
Tim Jackson | Speaker | TED.com