what is growth

The New Economics Foundation – a think-tank exploring many of the same areas as I do – has just published a paper, and got a plug for it on the today programme (give that pr person a hug!) advocating zero-growth economics. I’ve commented on their blog, because I think this – and conventional economics for that matter – miss the point.

My last post asked the question, “what is money”, and the answer of course informs the answer to this question, because economic growth is measured in money.  If we use something else to measure growth, we will get a different answer. Bhutan recently decided to pursue “gross national happiness” rather than “gross national product”, using an intangible measure of happiness rather than economic growth.

I have two arguments against the zero-growth brigade, which people of my age will realise is nothing new. The concept dates at least to the 1970s and was advocated in a dystopian paper, “the Blueprint for Survival”, published by the Ecologist magazine.  My arguments are firstly, that the zero-growth argument assumes that economic growth is linked – or coupled – to growth in resource consumption, which need not be the case. Historically, it’s true: the two are closely correlated. But it’s not necessarily true. There are plenty of examples of economic activity that don’t use large amounts of finite resources, and these are broadly what I call sustainable activities.  Our economy needs to be refocused towards these sustainable activities away from the resource-intensive activities, and if it does make that shift, then indefinite  growth will be possible. If you accept the zero-growth argument, you accept that refocusing isn’t possible, which strikes me as an admission of defeat.

My second argument is that the struggle for improvement is part of the human condition. We are a creative, innovative species; and growth is essentially the product of that creativity and innovation. If you forbid economic growth, don’t you also forbid innovation? And isn’t that rather a dismal, not to mention illiberal, prospect?

Let me finish by saying why I find the Blueprint for Survival such a dystopian document. It advocated the breakup of our large cities, a dramatic reduction in population and the resettlement of society into a series of small, mainly self-sufficient agrarian communities.  I confess that at the time it appealed to my young hippy self, and I wanted to go and live in the country and till the soil. I accepted the then received wisdom that big cities were terrible, dirty, dangerous, polluting places to live. But high-density urban living is one of the most energy-efficient ways of living; and cities are thriving, creative and tolerant places. Small communities quickly become culturally-isolated and narrowminded, like many suburban and rural communites are today.


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