Maybe Growth isn't the Problem?

After only a few years in office most Democratic politicians pretty much abandoned forced land redistribution as a social goal, and, whether consciously or deliberately or not, opted instead for land development as an essential part of the way to broad social and economic reform. The idea was that development would create new wealth for new groups of people in Hawaii. The living standards of middle and working-class people would rise. Thus rather than cut up the old pie of landed wealth in a different way, the idea was to make the pie grow more rapidly and continually by developing land intensively, so that everyone could have more without anyone having to give up anything of significance.

- Land and Power in Hawai'i


Today is the 56th anniversary of Statehood in Hawai'i. I grew up wishing that I could see Hawai'i in 1959. I had this romantic view of plantation life, dug out canoes, and empty surf spots. As time marches steadily forward I now look back at my childhood in the late '80s with that same romance. I grew up next to a cow pasture in Wailua Homesteads. Now, the only things growing in that pasture are large homes. Unless it was leaving Vidinha Stadium after the Farm Bureau Fair, a football game, or the 4^th of July—I do not remember ever sitting in traffic. Kipu Falls and Opaeka’a falls were two of my favorite places to go. On the weekends, it felt like we had Poli Hale all to ourselves. 

“Keep Kaua’i, Kaua’i”—“Grown here, not flown here”—“Slow down, this isn’t the mainland.”

There has always been an animosity towards new growth, new developments, and new comers. It's hard not to be angry when you see growing inequality, an affordable housing crisis, and continual development. But, even if you spend three hours a day sitting in traffic, even if you’ve lost access to waterfalls or beaches, and even if your favorite surf spot is crowded beyond recognition—you’ve benefited from Hawai’i’s land use policies.   

Before World War II, half of Hawai’i’s land was owned by 80 individuals or companies, and the very large majority of the remainder was ceded (or stolen, depending on your perspective) crown lands owned by the government. It was a concentration of power and ownership that was unprecedented in American history. At the time, it was nearly impossible to buy land. Not only were plantation level incomes too low, but the land was all tied up in agriculture and those in control had no incentive to start selling. But, with unionization, the initial economic diversity offered by tourism, and, most importantly, the return of Nissei WWII Veterans who used the GI Bill to earn a college education and political power—the economic situation changed overnight. A middle class appeared, and they wanted in on the American dream. 

The Democratic Revolution of 1954 was borne out of widespread discontent in low wages and a lack of available land for the new burgeoning middle class. As Wikipedia describes it: 

general strikes, protests and other acts of civil disobedience... culminated in the territorial elections of 1954 where the reign of the Hawaii Republican Party in the legislature came to an abrupt end, as they were voted out of office to be replaced by members of the Democratic Party of Hawai'i.

Development, development, and more development—were the keys to economic prosperity, and, over time, the keys to holding onto political power. A taxation policy of highest and best use instead of actual use ensured higher tax revenues, steady construction, and the steady development of all lands not designated as agricultural. Development fueled Hawai'i's economic engine and the ensuing financial windfall kept Hawai'i's political machine well oiled. 

As explained by George Cooper and Gavin Daws in Land and Power in Hawai'i:

following the ‘democratic revolution‘ of the early 1950s a new power structure began to form. In time it became resistant to change. It started recycling old members rather than continually pulling new participants up from the grassroots from which the founders emerged. Its elected leaders more and more relied on the money of the ‘haves.‘ In time they themselves became ‘haves.’[...] 

In Hawaii, as in other places in the United States, money buys votes. And in Council campaigns, the winners are usually financed by development interests: architects, contractors, attorneys, realtors, engineers, landowners, bankers, investors.

Yet, despite the growth-at-all costs mentality of Hawai'i government, despite the level of corruption and stagnation in Hawai’i state politics over the last 50 years, despite the fact that we all spend an inordinate amount of time sitting in traffic, despite lost access to waterfalls and beaches, despite open space and ag land converting to sprawling developments—if you own land in Hawai’i or have a job that pays a livable wage, you have probably gained more than you have lost. 

If you are the average person in Hawai'i, your chances of owning your own home are 35% better today than they were in 1960 and your personal income, adjusted for inflation, has increased by 62%. Would you trade your house or more than half of your annual income to go back to the Hawai'i of the 1960s? I wouldn't.  

Economic growth in developed countries follows population growth. More people, more houses, more growth, more money.

However, the reverse is also true. Less people, less development, less growth, less money. As the planet moves from an agrarian society to an urban one, the easiest way to raise your families living standards is to have less children. Because of that, birthrates are falling in every community on the planet. Japan, almost all of Europe, Russia, and some Asian Countries are facing precipitous population declines. In most of the developed world birthrates are at or below the replacement rate. And even among the poorest countries on the planet the birthrate is expected to level out by the end of the century.

The growth rate on Kaua'i has declined from near 3% annually in the 70s, to 1.3% between 2000 and 2010, and it's expected to fall to 1.1% annually over the next twenty years. Correspondingly, our state's annual economic growth rate between 1960 and 1975 was 3.2%, yet, between 1969 and 2007 it was only .6%. As our population boom slows, so does our economic growth. The slowdown is reflected in declining construction, declining growth in GDP, and stagnant tax revenue.

The rapid population growth and availability of land that fueled our economic explosion from Statehood is over. And I don't think it's coming back. While I've written about the threat of infinite growth and the need to control development, I'm beginning to think we should be equally concerned about the end of growth. As Kevin Kelly, the founder of Wired Magazine, writes: 

We have no experience throughout human history with declining population and rising progress (including during the Black Plague years)... Here is the challenge: This is a world where every year there is a smaller audience than the year before, a smaller market for your goods or services, fewer workers to choose from, and a ballooning elder population that must be cared for. We've never seen this in modern times; our progress has always paralleled rising populations, bigger audiences, larger markets and bigger pools of workers. It's hard to see how a declining yet aging population functions as an engine for increasing the standard of living every year. To do so would require a completely different economic system, one that we are not prepared for at all right now.

Struggling economies do not invest in fighting climate change, environmental conservation, or policies of social justice. As much as perpetual economic growth has been part of the problem, we also need it for our solutions.

But, we can maintain economic growth in the face of finite resources and dwindling population growth. Continual increases in technology and productivity can maintain an economic engine in a steady state economy. And a dollar spent at a locally owned business generates 80% more for a local economy than spending it at a non local business. If we aspire to zero population growth, then we need to support education, high tech industry, and local businesses in order to maintain our standard of living while investing in the future.

I recently posted this picture on Facebook of our company retreat in Koke'e. A friend who works in conservation noted that grazing goats are both supporting that patch of grass (nitrogen manure) while undermining its support (eating the hillside bare). And, while the grassy area is healthy, the goats consumption habits will eventually cause it to erode away completely. They are both part of the solution and the problem for that isolated little land mass. Sound familiar?