A large portion of the headlines that we read in the papers and see on the news everyday refers to economic growth. It is worded in a variety of ways. "We will find a way to jump-start the economy". "China's economy is growing faster than that of any other country". "The economy is on an up-turn". "Hope for a growing economy". All of these kinds of headlines are so ubiquitous and have been for such a long time that most of us never even give it a second thought.
I had never questioned the idea of economic growth until I was 26 years old. It had always just been a given in my mind. That's what makes the world go around, right? How could the world go around without economic growth? How could we progress without it? How could we develop without it? Our very definitions of progress and development hinge on economic growth.
However, in my research, I have run into the fact that our natural, ecological limitations will not allow for infinite economic growth. At least not in the way that we know it. So, for my master's thesis, I looked into the idea of dematerializing the economy. The idea of creating an economic model that will de-link economic growth from environmental destruction. An economic model that will allow the economy to just keep growing and growing, but with ever-increasing levels of eco-efficiency (ecological efficiency) and, thus, less raw materials intake and less waste output. Economic growth without the negative environmental effects! Well, with reduced destruction, anyways.
I came to the conclusion, after much studying and struggling with the different concepts, that what stands in the way of de-linking our economic growth from our environmental destruction is our modern culture. A culture that revolves around consumerism as self-expression and ownership as identity. We have had this culture in the "developed" nations for some time and they are moving more and more into this culture in the "developing" nations. This was a profound realization for me, because it made me see that it would be impossible to change our economic model without first changing our culture and mentality. We would need a complete paradigm shift. Yet, a question lingered in the back of my head..."If economic growth is not sustainable and, in fact, destroying the very means that it needs to exist, (even in a dematerializing economy) why do we need it?" It was a confusing question that has only led me to more questions.
Why Do We Need Economic Growth?
Well, a small minority of economists might tell you that we don't need economic growth. They refer to the Steady State Economy, which I will describe in more detail in another post. However, the vast majority of economists, business men and women, and even environmentalists still adhere to the idea that, yes, we need economic growth. What do they say to back up this argument?
One point is that we need economic growth in order to lift people out of poverty.
Another point is that economic growth keeps us competitive, which underpins progress and development. Innovation and technology come about as a result of market competition. Not to mention the promise of wealth and prosperity that economic growth gives.
The Critique
Let's look at these one by one. It's already been said in many a book and scholarly article that the advent of globalization and the modern economic model did not do much for people in the developing nations. In most cases, people in these places went from living in small, self-sufficient communities (albeit low-tech) to impoverished communities, dependent on external sources for money. There's a lot of history behind that fact, mostly based on colonialism and/or forced terms of trade, but the point is that people in the "developing nations" of today were just fine before they were bullied and, in many instances, forced into the modern, global trade system, which is the precursor of the economic growth model.
However, even after people point out this fact, they are usually quite quick to profess that this same economic growth model will pull the developing nations out of poverty. There is a quote that I reference a lot because it is so useful to keep in mind when we are seeking out solutions...
“If a factory is torn down but the rationality which produced it is left standing, then that rationality will simply produce another factory. If a revolution destroys a government, but the systematic patterns of thought that produced that government are left intact, then those patterns will repeat themselves… There’s so much talk about the system. And so little understanding.” - Robert Pirsig, Zen and the Art of Motorcycle Maintenance
How can we expect the same system that has created inequality and poverty in the developing nations to suddenly be able to produce equality and prosperity in those same places? For more on this point, refer to my post titled "It's not what you do, but why you do it".
To address the second point... It is said that the economic growth model is the way to increased innovation, technology, social progress, development and prosperity.
There are a couple of questions that need to be asked. First of all, innovation and technology to what end? Some innovation and technology really does enhance our quality of life. However, much of the technology we have today was created with the main goal of increasing economic growth by means of increasing the consumption of resources and producing products. So, that is just self-reinforcing. More technology= more economic growth= more technology, and so on. In fact, a lot of technology today is built to be obsolescent in a few years time so that people will then have to by new technology and so that is just self-perpetuating economic growth, itself, again. With these facts in mind, how much of the technology and innovation that economic growth fuels (and, in turn, fuels economic growth) actually has the goal and purpose of enhancing our quality of life?
Well, of course, this leads to much more important questions. What is quality of life? How do we define it? How do we define "development"? How do we define "prosperity"?
If all of these things are just defined by economic growth, is there any point? In other words, if we define development and prosperity and quality of life in terms of more money and more products, and yet we say that we're creating more development, prosperity and quality of life by making more money and products, where does it end? What's the basis of it? What are the values that are underlying this crazy cycle?
Many people who question economic growth do so because of the ecological limitations that make sustained economic growth impossible. (Read the short article, "The Problem with Steady Growth") I agree. However, I see an even more compelling reason. Why do we need it? How do we ultimately benefit from it? What's the goal of economic growth? Where do we hope it will take us?
Economic growth has been our paradigm for so long because we've equated being happy with having more money and more things. This is nothing new. People have been saying this for a long time.
However, there's an even deeper level to it and one that is often overlooked. We've also known for some time that money doesn't equate with happiness. There are even scientific studies that prove it. So, what's the gap in logic there? Where did we get it wrong?
The purpose of this post is not to answer these questions, but rather to pose them in a way to prompt you, the reader, to think about them. They are important. These are the things that form the very foundation of our society and the world that we are creating. It is important to understand why we're doing what we do and what we expect from it.
Although these questions are too many and they go too deep to cover in one post, I will continue to explore them in future blog posts. Keep an eye out for posts about the questions of how we define prosperity, development and progress in relation to economic growth in later blogs. I promise I will tie these pieces together, if you have a little patience :)
Also, if you're craving more right now, I highly recommend watching the Crash Course, by Chris Martenson. It gives some excellent insights and facts about this topic.
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