The idea that economic growth is important is a relatively recent one. Prior to the 19th century, it was commonly believed that economies were static; that total output never changed so that one person's gain was always another's loss. Even in the 20th century, it was not until after the Great Depression of the 1930s that economists started taking growth seriously.
Fast forward to today and it looks as if we have become growth-addicted. Political leaders stand or fall on whether they can deliver growth. Companies commonly report on growth at least every three months, knowing that their stock prices depend on it. The assumption now is that growth is always good.
But given the state of the global economy – and of the planet – perhaps now is the time to stop for a moment and ask: do we actually need rapid economic growth, or even any growth at all? After all, growth in Gross Domestic Product (GDP) is growth in output, and that usually comes with growth in inputs such as natural resources.
Post-growth economics
In fact, it is widely argued that in any case the rate of GDP growth is not a particularly good measure of economic health. It doesn't reflect inequality (if only one person in the world gets massively richer and everyone else gets a bit poorer, that could still show up as GDP growth). And to many, GDP means little: a recent study from the UK Office for National Statistics found that fewer than half of people surveyed even knew what GDP was – many confused it with the value of the currency, or with exports.
Set against this are the sustainability-based arguments of the “de-growth” economists, who say that we have reached a point where growth is never good. The argument is summed up by leading de-growth thinker Professor Tim Jackson, who writes “endless growth… can only end up leading to no growth at all. There is no growth on a dead planet.”
Can we do more with less?
Yet there is a third argument – the argument that humans are inventive enough to find new ways of growing their wealth that involve doing more with less. This is the “green growth” argument, and it is the thinking that is leading to the adoption of net-zero targets and environmental standards for business.
So far, green growth is the preferred path for policymakers and businesses. They don't want to abandon growth, not least because de-growth is unlikely to win the hearts of either investors or voters.
But green growth also has a problem. It needs to demonstrate that it achieves results. Right now, that is also a hard argument to make: biodiversity continues to decline, water resources continue to degrade and greenhouse gas emissions continue to rise. Green growth sounds good, but only if it actually delivers.
Putting the planet first
Most great arguments end in either compromise or conflict. Will growth, de-growth and green growth come to terms with each other, with some economic activities evolving towards true sustainability, and others experiencing permanent contraction?
Or will the only growth be in the widening gap between these differing world views? That would be the worst kind of growth, because, as we've heard, it leads to planetary catastrophe.
It remains the job of green growth innovators to prove that growth can lead somewhere a lot better than a dead planet.
Illustration by Davide Bart. Salvemini
