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Daring to look beyond growth by Jonathan Dawson

Whichever way you look, the centrality of economic growth to public policy is just about universal.

Over the last couple of decades, qualifying adjectives – ‘sustainable’, ‘inclusive’, ‘smart’, ‘balanced’, ‘green’ - have come in and out of fashion, but the great, stolid noun that is ‘growth’ has remained anchored and unmovable at the heart of our thinking and policies.

Tellingly, if presumably unconsciously, growth lies literally at the centre of international sustainability planning - number eight in the list of the 17 Sustainable Development Goals: ‘Promote sustained, inclusive and sustainable economic growth…….’

Thus, GDP (Gross Domestic Product), that measures nothing more than monetised economic activity, has come to be the core measure of societal wellbeing and governmental success.

But could it be that the medicine is poisoning the patient?

Several decades back, one of the founding figures of ecological economics, former World Bank chief economist Herman Daly, warned that our economies were slipping into what he described as ‘uneconomic growth’- where the costs of growth – in terms of the destruction of our ecosystems and communities (that are not included in the financial calculations) - were exceeding the benefits generated by growth.

Edward Kennedy captured this beautifully as far back as 1967: ‘[GDP] measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.’

This is not to say that economic growth is a mistaken policy objective in all circumstances.

There is substantial evidence that for economically poor societies, growth tends to translate into longer, healthier and happier lives.

However, the correlation weakens and then flattens out at a level of per capita incomes far below those achieved in the industrialised world countries where economic growth remains unimpeachably central to public policy. It is of value here to note that more or less since the end of the Second World War, GDP has been used as a proxy for societal wellbeing – having the merit of providing policy-makers with a single number to guide their actions.  

And indeed a strong case can be made that in the decades of reconstruction of the damaged and hungry continent that was post-war Europe, it performed a very useful function.

However, in today’s mass consumer societies, characterised by ecological dislocation, abhorrent levels of inequality and a crisis of meaning, the time for a major questioning of the legitimacy and usefulness of growth to policy-making - of its continuing use as a proxy of wellbeing - is now at last upon us.

Two of our guest presenters at the college this term are forefront in the growing wave of questioners.

Jason Hickel suggests that if the declared aim of the SDGs is the reduction of poverty in its many guises and manifestations, why not tackle these directly at the their root rather than continuing to be focused on the proxy indicator that is GDP. Reversing the logic of Henry Wallich, a former member of the US Federal Reserve Board that ‘Growth is a substitute for equality of income’, he proposes that then, conversely, ‘equality can be a substitute for growth’!

Meanwhile, in a characteristically deft turn of phrase, Kate Raworth asserts that:

“Today, we have economies that need to grow whether or not they make us thrive. What we need are economies that make us thrive whether or not they grow.”

The challenge now facing us is to work out how we can wean our economies off growth, while providing meaningful and dignified work for all, North and South, and remaining within our planetary boundaries.

Our new postgraduate programme, Regenerative Economics, launched next academic year, will provide an incubator and launch-pad for myriad enquiries towards that end. 

*Jonathan Dawson is a senior lecturer and coordinator on MA Economics for Transition and MA Regenerative Economics.

 

 

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