99% argues that, to avoid mass impoverishment, we need not only to grow the economic pie but also to share it fairly. And it is clear that, with a shrinking pie, ending mass impoverishment will not be possible – redistribution could only provide a short-term relief. If the pie shrinks, we shall have no choice but to unwind some of the central elements of modern Western civilisation such as the welfare state and universal healthcare. Life will become more like Victorian England in which a tiny minority lived lives of great luxury, and for most people life was solitary, poor, nasty, brutish and short.

But some (not, of course, all) environmentalists argue that even more important than ending mass impoverishment is saving the world – and the two things may be incompatible. We are rich by historical standards, and we need to accept that future generations will not be so rich.

Who is right?

The anti-growth environmentalists are right that saving the world is more important than ending mass impoverishment. If the two really were incompatible, then it would be better to prevent the catastrophe that an environmental collapse would entail (and the mass impoverishment that it would bring in its wake), than to achieve a short-term reversal of mass impoverishment unsustainably.

But are they incompatible? A major programme of house insulation would create significant economic growth – and it would help the environment. That is an example of good growth. Even more so with the enormous investments that would be needed to create a circular economy.

There is good growth; but there is also bad growth. And currently, we do not make a distinction. An ethically-run business which is carbon neutral or even negative, which pays its taxes, and which pays its workers at least a living wage makes a huge positive contribution to society. But an unethical business which pollutes extensively without paying to clean up its emissions, which avoids its taxes and which underpays its staff, is likely to appear more profitable. Because it has externalised its costs, the bad business in effect receives a hidden subsidy from the rest of society, and it can out-compete the good business. (See Chapter 15, in 99%)

So the trick is to distinguish good growth from bad growth, good businesses from bad businesses. The way to do this is to correct corporate accounts to show when businesses have externalised their costs. When a business pollutes but does not pay for the clean-up, the rest of society has to bear the cost. When a business underpays its staff, the rest of society has to pick up the tab. A corrected set of accounts would charge a business for this hidden subsidy from the rest of society, and with the corrected accounts, bad businesses would find their profit evaporating along with their incentive to grow. With our current system, environmentalists are trying to sail into the wind of market forces; with this new system, they will have the wind of market forces behind them.

With these corrected accounts, profit truly does reflect contribution to society, and all properly-measured growth is good growth. It is not clear whether growth rates under this new system will be higher or lower than we have been used to (because some activities will have to shrink radically) but what is certain is that its composition will be radically different.

We should go for growth — but we should insist that it is good growth.