The Fantasy of Growth
The ‘Holy Grail’ Everything that comes into existence grows, matures, flourishes, perishes and finally decays. Then, if the conditions are right there is renewal. These are unalterable universal laws; growth is the flip-side of development. The maturing and flourishing dimensions are the developmental aspects of growth. In another sense the terms ‘development’ and ‘growth’ are interchangeable, but in economics they have specific meanings, like in the sentence: ‘Development is dependent on growth.’ But we can have development without growth.
That is, improving our state of well being without economic growth; without the accumulation of material possessions that, in their increasing manufacture and use contribute to a degraded planet. We need to differentiate between quality and quantity and ask if possessions can improve the quality of life. Up to a point, perhaps, when they can relieve us of our daily drudgery. But beyond that we succumb to greed, euphemistically described today as consumerism; a state by which we measure our self-worth through the things we possess, capitulating to advertising techniques designed to leave us addicted to wanting more stuff.
This is the consequence of denying ourselves the secret we call contentment, an essential ingredient for happiness. The extreme example of the desire to possess is the millions the rich spend on works of art. Somehow the possession and display of these artefacts give their owners a sense of power and importance, and perhaps happiness. Growth has become the holy grail of the nation state in these times; it is the driver that provides the raison d’être of the modern world. One never ceases to hear about economic growth, as if this was the universal remedy that would deliver to the human race the good life it seeks. Politicians are sold on the growth agenda because this is how they can make their contribution to improving the living standards of their people. This is, after all, what they were elected to do and if they succeed they remain in power. The project is to enhance their appeal to the electorate, and this is the underlying reason why it has been difficult to reach agreement on climate change discussions.
Reducing carbon footprints means curbing growth rates, and who is going to be the first to do that? This is why the United States did not ratify the Kyoto protocol in 2005, and Trump provides us with a textbook example of how this is done: tell people the lie they want to hear and scupper international agreements ostensibly in the national interest.
International agencies like the World Trade Organisation (WTO) constantly promote growth. As Roberto Azevêdo, the Director-General of WTO, declares in his concerns for the environment, the fact cannot be ignored that the principle concern of his organisation is economic growth. Economists always promote growth because it is part of their belief system, and in their reckoning the environment is relegated to second place. As we move into unexplored territory a new jargon appears: the ‘ecology of investment’, and in this idea investors sensitive to climate change look for growth opportunities in the development and application of renewable energy.
The media, which with a few exceptions is part of big business, supports the growth agenda to the hilt. One only has to look at the financial pages in the newspapers. The following headline appeared in the Telegraph of 30 September 2014: ‘IMF: Infrastructure spending spree last chance to revive growth – International Monetary Fund describes public infrastructure spending as “one of the few remaining policy levers available to support growth”’.
This is an organisation in which its chief officer has declared her grave concerns regarding climate change. To bring this up to date, the latest IMF assessment published in October 2017 makes this observation in its Executive Summary: ‘For 2018, the upward revision (a reference to its foregoing analysis) mainly reflects an expectation that the authorities will maintain a sufficiently expansionary policy mix … to meet their target of doubling real GDP between 2010 and 2020.’
The full title of this report is World Economic Outlook, October 2017: Seeking Sustainable Growth (Short-Term Recovery, Long-Term Challenges). It would be pertinent to ask here if sustainable growth is the same as sustainable development? It quite clearly is not and this raises another question. Is the IMF paying heed to the idea of sustainability that UNDP is taking so
much pain to advocate? These are mixed messages coming from reputable international agencies and only confirms my two-world theory: conservationist versus expansionist.
If we draw a line starting with Adam Smith, the father of modern economics (late eighteenth century) and work our way through John Stuart Mill, economic theorist and moral philosopher (early nineteenth century), and Alfred Marshall, whose Principles of Economics was taught in universities till the 1920s, we discover that economic growth per se didn’t receive any serious mention until the middle of the twentieth century, when economic historian Walt Whitman Rostow made a serious study of this subject in its own right.
He saw the rate of growth as a ‘function of changes in two enormously complex variables’: Output, that is scale and productivity of the workforce; and, capital, which he describes as ‘land, other natural resources as well as scientific, technical and organisational knowledge’. He also describes growth as ‘the art of interrelating economic, social and political factors over time.’ Growth today is expressed as the amount of goods and services produced per head of the population over a period of time.
The late 1940s and the early 1950s were a period of great hope. Seventy years ago, the American atom bombs dropped on Hiroshima and Nagasaki had done their work and they provided the illusion that war was outmoded. Postwar reconstruction was reaching a climax, full employment was an aspiration treasured by all politicians, and the welfare state was being put together as a fulfilment of the hopes of war-weary people. Environmental issues were on the horizon, but few people saw them coming. For the first time ever an elected government was able to promise its people a good life by quoting a magic figure. This feat was achieved by RA Butler, Chancellor of the Exchequer (Finance Minister) of the British government, in 1953: ‘He told the British people that their standard of life, with a 3 per cent growth rate, would double in 25 years.’
Over sixty years later this idea has now taken a grip on the world as a measure of economic progress. The ‘UK Economic Outlook, March 2018’ projects that ‘households will spend over 30% of their budget on housing and utilities by 2030, up from around 27% in 2017.’ The culture is to view this as good news, and why not? Promises of the good life lie behind such statements. At the other end of the growth spectrum are China, who have at times achieved double digit growth rates, and India who follow close behind. And again, why not? The people of these populous nations have a right to a higher standard of living and to be able to go shopping, illusory though this may be. The economic growth agenda that the international order has designed for itself has taxed ecosystems to such an extent that the process of global decay is now well underway. The potent mix of factors, not least of which is climate change, have been simmering for a while and are now coming to the boil.
The planet will recover in its own time, once we have done our mischief and are gone, but in the meantime we are in trouble. I have been around for nearly four-score years and ten and I have yet to see signs that the earth is growing. As far as I am aware, and people keep reminding me, if not stopped in time only cancer and the money supply can keep on growing forever. These two strange bedfellows also have another thing in common, in that if allowed to grow unchecked they will destroy their hosts. However, the growth of the former can be stopped by surgical incision but the latter, which in effect feeds the growth agenda, will need a different kind of surgery to stop it from killing its obese host. There is no Plimsoll line – a point at which we can all see that we are overloading the planet by these very processes.
Here is a perspective on growth from the New Economics Foundation: The most recent data on human use of bio-capacity sends a number of unfortunate signals for believers in the possibility of unrestrained growth. Our global ecological footprint is growing, further overshooting what the biosphere can provide and absorb, and in the process, like two trains heading in opposite directions, we appear to be actually shrinking the available bio capacity on which we depend.