The cult of economics and the ‘growth’ god
A common theme running through much of the world’s history is the prevalence of often bizarre and outrageous ideas that would never be granted any credibility in the modern age. Some of these ideas and doctrines, during certain periods of history, were seen by most people alive at the time as undeniable truths. For much of the last millennium, the divine right of kings was used to justify the perverted reign of Europe’s many monarchs. Those who questioned it were seen as seditious radicals on the fringes of society. Likewise, the doctrine of Manifest Destiny declared that the United States had a God-given right to expand westward on the North American continent, even if it meant the extermination of the native population.
Today’s prevailing delusion is not a peculiar religious dogma or indeed any crazed racist political doctrine; it’s the belief in the necessity of unending economic growth. Championed by almost all politicians and economists, the notion that the world’s economy can grow indefinitely comes up against one huge stumbling block; Earth’s finite resources.
The scientific consensus is that humans are causing our planet’s climate to change. The only thing that is really contested here is the degree to which it is taking place. And our collective obsession with never-ending economic growth, coupled with our addiction to heat-trapping fossil fuels, is a recipe for environmental disaster. Future generations, if there are any, are likely to be bemused at our economic system’s reckless short-termism.
Growth is a central component of the current economic system and is necessary for its normal functioning. It’s generally accepted that capitalism requires the economy to grow by around 3% every year to avoid a crisis, as we now know today. When growth stops, millions of people are thrown onto the scrapheap. However, when growth continues, the environment suffers. It’s an unfortunate fact, but when GDP increases, so do greenhouse gas emissions. This is an enormous obstacle which humanity needs to overcome in the very near future.
Economics is perhaps the most over-mystified field in modern academia. Many people feel intimidated by the figures, strange-sounding financial terms and, ultimately, its sheer dullness. Consequently, most people feel that they should leave major economic decisions to those “who know best”, much to the detriment of the rest of society.
Boiled down to its most simple form, economics is about human beings labouring to produce and exchange things that they want or need. In a sense, “economics” has existed for as long as humans have populated this planet, even if the term wasn’t articulated by our earliest ancestors. However, economics today is a very different beast. The attacks on living standards across the world, carried out on behalf of the powerful, testifies to the fact that people are now seen as objects whose sole purpose is to serve the interests of “the economy”, rather than the other way around. Environmental lawyer Gus Speth highlighted the blindness at the centre of this fanatical money worship when he said: “Economic growth may be the world’s secular religion, but for much of the world it is a god that is failing – underperforming for most of the world’s people and, for those in affluent societies, now creating more problems than it is solving.”
Economic growth, we are told, is the only way to improve our lives and to raise millions of people out of poverty. It’s believed that building and consuming more things makes our lives more fulfilling and enjoyable. But this view, although widely held, does not stand up against the evidence. Although the global economy has grown many times over the last few decades, very little of the wealth created has went towards lifting the world’s poorest people out of poverty. And in western countries, whose populations are the supposed beneficiaries of economic growth, depression and anxiety levels have increased massively as a result of stress and longer working hours.
Economic growth does not necessarily lead to increased life satisfaction. Indeed, most working people saw little benefit from economic growth over the past forty years. Since the 1970s, wages in the western world have stagnated as a result of the demise of effective trade unionism. So, while the economy was growing year-on-year, those who were creating the growth in production and wealth received nothing extra for their labour. To fill the gap in demand left by falling wages, working people were encouraged to obtain credit cards in order to buy things which otherwise could not have been sold. Thus, a growing consumer economy is necessarily built on huge amounts of debt, which clearly brings about its own set of personal and social problems.
The wisdom of promoting western consumer-based economies as models of development for the rest of the world is questionable at best. In their 2006 report, Growth Isn’t Working, the New Economics Foundation pointed out the stark unfeasibility of continuing to grow the global economy indefinitely: “For everyone on Earth to live at the current European average level of consumption, we would need more than double the biocapacity actually available – the equivalent of 2.1 planet Earths – to sustain us. If everyone consumed at the US rate, we would require nearly five.” Aside from the ecological impossibility of using growth to tackle poverty, the actual results have left a lot to be desired. The authors of the report also discovered the following:
“Between 1990 and 2001, for every $100 worth of growth in the world’s income per person, just $0.60 found its target and contributed to reducing poverty below the $1-a-day line. To achieve every single $1 of poverty reduction therefore requires $166 of additional global production and consumption, with all its associated environmental impacts.”
Rather than the wealth “trickling down” to the less well off in society, as Margaret Thatcher infamously believed, the tendency in capitalism is for the wealth to trickle in a most definitely upward fashion.
Beyond a certain point in any society’s development, economic growth ceases to contribute to general public well-being. Once people’s basic requirements are fulfilled, such as health care, a good social and family life, purposeful employment and adequate shelter, the urge for material goods diminishes. This is exceptionally demonstrated in Tim Jackson’s Prosperity Without Growth, which points out that people generally value having a productive role in society more than they value material commodities. Following the initial buzz of buying a new iPad or catching up with the new fashion fad, there’s little to suggest that we are any happier when we consume things. Indeed, the most visible facet of growth-based consumerism, advertising, encourages us to be deeply unsatisfied with our lives and with what we own. Life is never good enough unless you go out and purchase the latest crap the capitalist has to offer.
Fred Magdoff and John Bellamy Foster, in their 2010 book, What Every Environmentalist Needs to Know About Capitalism, made an important point when they wrote: “The emphasis on consumption has even brought about a change in everyday use. Instead of talking about the “people”, the “general population”, the “public,” or “humanity,” it is common to use the term consumer.” They continued: “Our humanity is being defined as our connection to commodities instead of to each other and our communities”.
Shopping is central to the workings of capitalism. The powerful need us to buy their junk to keep their system ticking over. That is why, in the days after the 9-11 attacks, US President George Bush urged terrified Americans, who were worried about the prospect of another Al-Qaeda attack, to get out their credit cards and start spending again in a bid to prevent an economic slow down.
Not only does economic growth fail to improve our happiness and wellbeing, it assists in the destruction and cooking of our fragile planet. The fetishisation of growth gets more cult-like by the week. There is no alternative, we are told. Any other system which has been tried out has failed. Capitalism gives people what they want. We must appease the markets. History ended when the Berlin Wall fell in 1989. So goes the mundane mainstream narrative.
The task of this generation is to move the world beyond an economic system which views both people and planet as mere “externalities”. We need to build a system which views these things as more than trivial side issues which warrant only an afterthought. There is nothing to suggest that a non-growth economy, organised in a non-capitalist way, of course, would not prosper. The key is to reorganise the priorities of the economy and to plan production in a way that meets the basic needs of everyone while at the same time not destroying our species’ chances of survival on this planet. Of course, it will require a change in the way we currently live our lives and will present an immense challenge, but it can be done. To continue the way we are going risks disaster.
Kenneth Boulding wonderfully summed up the madness of the current economic paradigm when he quipped: “Anyone who thinks exponential growth can go on forever in a finite world is either a madman or an economist.”