What if economic growth isn’t as positive as you think?
Written by Martin Kirk via Fast Company on 7/16/18
When Donald Trump says “Make America Great Again,” he’s alluding, at least in part, to the promise of economic growth. Just as when Bill Clinton said, “it’s the economy, stupid,” he was really saying that “it’s about economic growth, stupid.” This is the Golden Promise of politics: more economic growth. Golden, because it is effortlessly translated in voters’ minds to mean more jobs, more money in the economy, and therefore more income in everyone’s pockets. Because economic growth is, obviously, a thing greatly to be desired.
Equally obvious is the knowledge that no economic growth is a bad thing. When economies and companies don’t grow, they stagnate and falter. Which means fewer jobs, lower wages, less money to invest, more business shut downs, and bankruptcies. In short, more misery for all.
It’s all so obvious, right? It’s one of the precious few things we can all agree on in this fractious age.
But there are some new strains of thought that take a more nuanced and sophisticated view of growth. That say, yes, all other things being equal, economic growth is a positive thing. But all other things are notequal. There’s no such thing as a free lunch, and, for all its positives, economic growth has a dark side; its ecological impact. The impacts of our ever-growing economy have become so stark and so widespread that they are by any sane measure portents to catastrophe. Whether it’s the fact that Antarctic ice is now melting three times faster than we thought, or the unfolding “biological annihilation” that has already wiped out 50% of all animals and up to 75% of all insects, or the fact that, in spite of all this, we are pumping out CO2 at record levels, it takes willful ignorance or a blinding ideology to deny the severity of the crisis.
This creates a terrible paradox: Economic growth keeps economies stable today, but threatens not just future growth but medium-term social and civilizational cohesion, and ultimately the very capacity of this biosphere to sustain life. A paper published in the Proceedings of the National Academy of Sciences last year suggested that “the window for effective action is very short, probably two or three decades at most.” And that even this dire prediction is considered “conservative” by the authors, “given the increasing trajectories of the drivers of extinction.” In terms of practical politics, that means acting immediately, preferably yesterday.
Most politicians deal with this paradox by ignoring it. It’s by far the easiest option; one afforded every incentive and reward by this political economy and the beliefs that underpin it. This belief system has been dominant for a long time now. We are, as a society, deeply comfortable with it, which means many of its core assumptions are considered unassailable–too obvious to question. The most profound being this idea that growth is always good. Questioning this amounts to political suicide for any politician.
Or, at least, it used to. We are starting to see some movement in interesting corners of the global political landscape that suggest that some leaders are showing the sort of political courage needed to shift established norms. It may well be starting to become something of a bonafide political movement. It’s young and small, still, but so were all movements at one time.
A little thought experiment shows how growth can be a problem: Insert the word “a” before it. “A growth.” That feels very different from just “growth,” right? Growth is a big part of what we all understand happens in a healthy life. Children grow, knowledge grows, love grows. But “a growth” is what happens when life gets corrupted. “A growth” is when the growth is unchecked, and thus a symptom not of health but disease; when it takes on the character of an invader, attacking its host. The word for growth that gets out of control in this way, such that it becomes “a growth,” is, of course, cancer.
But wait, I hear you cry, technological progress will save us! We can just grow meat in test tubes rather than needing so much land and clean air space for cows and their methane-laden farts, or we can all switch to renewable energy, or recycle more and better, and then we can get back to the promise of infinite growth. Unfortunately, the evidence is clear that this is simply not possible. Yes, we can make dents in our impact with such measures, and we should with all possible speed, but the way the global economy is currently programmed means such things are important–but also entirely insufficient.
So, once we discard the vain hope of being able to grow the economy infinitely and indefinitely, what are we looking at? This is where the innovation and bravery come in.
A new alliance was formed in 2017, called the Wellbeing Economy Alliance. What they are shooting for is one–or many different–economic model(s) that have, “the fundamental goal of achieving sustainable well-being with dignity and fairness for humans and the rest of Nature.” Which means they cannot just reach for socialism or any other historical model–socialism, like capitalism, relies on growth, as does communism. They have recognized that we can’t rely on past thinking; we must genuinely put our best brains forward and innovate.
We’re not talking about a bunch of random, dreamy utopians here, but real politicians who have won real elections and are exercising real power. So far, the roster of governments signing up to the Alliance includes Scotland, Costa Rica, Slovenia, and New Zealand. Other governments that are actively looking at the issue include Italy, and there are political parties emerging, like the Alternative Party in Denmark, which is also embracing the innovation challenge. These are not what are often referred to as Tier 1 countries in the international order, but neither are they so small they are irrelevant.
Scotland, for example, provides a direct line into both the U.K. and (at least for the time being) the EU. Costa Rica has long been a pioneer of innovative economic and social thinking, with impressive results: It is routinely in the top three countries in the world when measured for the well-being and happiness of their people. New Zealand is, perhaps, the most newly bold. Its prime minster has not only called growth-at-all-costs capitalism “a “blatant failure” but also has said her government would no longer accept GDP as the sole, supreme measure of progress. “The measures for us have to change,” she said in October last year. “We need to make sure we are looking at people’s ability to actually have a meaningful life, an enjoyable life, where their work is enough to survive and support their families.”
And this is where social and economic forces start to align in very interesting and potentially powerful ways. And open the door for seeing electoral strategies in an agenda based on innovations to take us beyond traditional growth-at-all-costs economics.
Consider a few facts: More than 50% of millennials say they would take a pay cut to find work that matches their values, while 90% want to use their skills for good. And these trends are on the up. Deloitte’s 7th Annual Millennial Survey of 12,000 young people, for example–both millennials and gen Z–reports record low opinions of businesses. Fewer than half now believe that businesses behave ethically, and this directly affects how loyal they feel to their employers; 43% of millennials and a whopping 61% of gen-Zers expect to stay in a job no more than two years. And all this against a backdrop of general public opinion that is also looking increasingly unkindly on the economic paradigm we have.
These are conditions that can be worked with. They show that there is a large and growing instinct out there that thinks that we need fundamental change to the way we do economics. Not tweaking around the edges, but fundamental change at the very roots of the global economy. There is no neat or reliable evidence to suggest that challenging infinite growth is at the top of peoples’ minds, or likely to be a particularly easy sell. But there is significant doubt in growth-at-all-costs capitalism, and that is an opportunity for innovation. Combine that with the new thinking coming out of places like the Wellbeing Alliance, and you can start to sense the causes and conditions may well be aligning in favor of the emergence of wholly new, post-growth economies. It cannot come soon enough.