Do we need economic growth?

I’ve heard many arguments that human society should be moving away from a growth mentality, and towards a sustainability mentality – that we should aim to provide for everyone’s basic needs in a healthy, ecologically and emotionally sustainable way, that we should seek a sustaining cyclical economy, rather than a linear economy that is constantly destroying things to make new things. I’ve heard far fewer arguments that we should start immediately. But how important is growth, really?

Without the specter of economic growth, maybe we’d finally get the giant chess boards science fiction has been promising us for so many decades.

Imagine, for a moment, that the economy began to grow tomorrow, and that by the end of 2015 we had seen sustained economic growth of 3 to 5 percent a year. Would we be better off? Unemployment would probably fall, and alot of the immediate pain of the Great Recession would retreat – both very good things. But I don’t see any reason why this hypothetical growth would be different in nature than the last two periods of growth the United States experienced.

The economic growth of the Bush and Clinton years, so far as I understand it, was fueled in large part by a few tremendous bubbles. The dotcom bubble was based around early enthusiasm for a genuine revolution in how we live our lives, but it has turned out to be a revolution which doesn’t seem to have created much potential for economic growth. If anything, itunes, BitTorrent, Amazon and crowd-sourced journalism have hollowed out once productive industries and replaced them with virtual simulcra.

The housing bubble was compounded by the fact that individuals were using home equity to convert the imaginary value created by an inflated housing market into cash and credit they could use to afford services like education and healthcare which had been getting steadily more and more expensive by the year. (If the Sears Roebuck Company could sell a perfectly good house for 35,000 inflation-adjusted dollars in the 1920s, I don’t see why a house 80 years later should cost so much more? But this is a topic for another day…)

Hedge funds used computerized trading to basically skim money off the top of the economy and collect it in massive offshore bank accounts, without doing anything productive – this and other financial “innovations” made America’s tiny financial elite richer than ever. Meanwhile, incomes stagnated, while the prices of essential services such as housing, healthcare, and eduction soared, slowly pushing down against the middle class.

I don’t mean to minimize the suffering of the great recession, but what good, really, is more of the economic growth that Clinton and Bush gave us? Is it more than an invitation for another collapse in a decade or two? Is it enough to keep the United States from slowly growing poorer and poorer over the coming decades? Is it enough to give the (mostly white) children of the baby boomers the earnings and privileges of their parents? Is it enough to give communities of color the promise of the American dream which the Civil Rights Movement asked for, and the continuing segregation of American Society, and the apartheid criminal justice system of the war on drugs and the prison industrial complex continues to deny? I don’t know, but it just doesn’t seem like it.

I don’t think that economic growth would solve our problems. It might slap on a band aid, and it would certainly help a lot of individuals – the unemployed and underemployed and underpaid – growth isn’t a bad thing. But is it what we need? What would a conversation about the economy look like that wasn’t predicated on the need for growth? That wasn’t predicated on what economists call economic “health?” I suspect our answers to questions about the environment, the military, the budget, taxes, health care, would look very different if we discounted their short and medium term effects on the economy. Is the economy really so important? More important than the health of the planet? More important than values like equality and social justice? Sometimes it feels like we are sacrificing an awful lot on the alter of the economy.

I think what I’m trying to say is: if the wealthiest human society the earth has ever known (which the United States almost certainly is) can’t find a way to make a healthy, happy, equitable, just society, is making the pie bigger really going to help?

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4 Responses to Do we need economic growth?

  1. A very valuable point to introduce to the debate.

  2. Ronald Grey says:

    Dear Sir or Madam:

    You’re right to focus on housing as the cause and consequence of the 2008 financial crisis, unlike Barack Obama, who entered office in 2009 and made health spending his top priority for the economy.

    See: ‘The Right (but Neglected) Issue for Recovery’

    But as the essay, “Economic Development of the Solar System,” implies, we need to move beyond the concept of biosphere sustainability to one of replication beyond Earth for our ultimate survival:

    See also: ‘My View of Earth Day’

    (I apoligize for all the links.)

    Ronald Grey

    • orkinpod says:

      Thanks for the links – your post was fascinating, and I look forward to reading the other two this weekend. I’m very interested in the question of where space travel (and other bold, forward looking, big picture scientific accomplishments) fit into the direction society should be moving. I’m especially interested in the relationship between the kind of space-travel centric, expansive future which I’ve long felt was a crucial next step for humanity, and the focus on the small scale and the local which many environmentalists have embraced (partly in response to global warming, which is a planetary-scale problem!) I think Octavia Butler gets at this question, in a round about way, in her Earthseed novels.

  3. Pingback: When the future comes, what are we all going to do? | Orkinpod

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