Red mud waste pool from bauxite mining for aluminium. © CC Raboe/Wikipedia

+ By factoring illth – the opposite of wealth – into our economy, we could ensure that the planetary systems we rely on are preserved automatically. Image: © CC Raboe/Wikipedia

A term coined by John Ruskin, illth is the opposite of wealth. It’s something I believe deserves more consideration because our usual measurements of wealth, such as GDP, ignore the negative consequences of economic activities, such as depleted resources or pollution.

By factoring illth into our economy, we could ensure that the planetary systems we rely on are preserved automatically. 

Human activity relies on the extraction of resources such as oil and metals from the planet; this is the source. At the other end of these processes, we dump waste products such as CO2 into the atmosphere and pollutants into water systems; these are examples of sinks. These source/sink systems have certain rates of renewal. If our throughput rate exceeds the renewal rate, they’ll ultimately cease to support our activities. 

These systems are our natural capital. We can live on the profit generated by the capital, but if we sell-off the capital itself, we will not stay in business for long. To balance the books, we need to account for illth as well as wealth.

Depletion and pollution are two instances of illth. Others include bad health caused by over work, and the creation of places no one wants to be, such as industrial wastelands.  

Economic growth led to improvements in many people’s standard of living for a long time, so we use it as an indicator of prosperity. But when only the positive impacts of economic activity are counted and the negatives ignored, economic expansion will always look promising, even in cases where it generates more illth than good. Couple this with the evidence that wellbeing plateaus beyond a certain level of wealth, then growth for growth’s sake can begin to look questionable.

Let’s look at business flights as a GDP-boosting example. It’s often pointed out that face-to-face meetings are more effective than video conferences; they produce more value. That may be true, but if the illth produced by the associated carbon emissions were measured and subtracted from the marginal wealth produced by meeting face-to-face, we might see a very different picture.  

So what can we do? Carbon taxation is a good start, but I think the concept must expand to cover water supplies, reserves of metals, ozone, air quality, biodiversity, fertile soil and so on.  Tax the source/sink ends of throughput where illth is produced; don’t tax the value added.  Then the holistic merit of any economic activity will be built into its commercial viability.  

From the vantage point of an illth-taxation economy I think we would be in a better position to say whether infinite growth really is the way forward, and if so, in which areas this growth should be encouraged. We might expect to see low-material-throughput activities such as information services become growth areas, while industries which sell off future generations’ well-being would cease to make business sense.  We may even be shocked to discover that well-managed negative growth is the path to sustained prosperity. 

This would be an economy which values real benefits to people and makes it impossible to export illth to somewhere else, someone else or the future.