Words Never Heard from Obama or Romney: “Let’s Rethink Economic Growth”Nov 7th, 2012 | By admin | Category: Economics and GDP
By Suzanne York, www.howmany.org
In the debates and discussions leading up to the 2012 presidential election, there was not a hint that either political party was willing to question and reassess our dependence on endless economic growth in a world of finite resources. That is anathema to our political world.
Our economy is measured and guided by Gross Domestic Product, or GDP, and growth of GDP is considered central to our economic system. GDP is the value of all goods and services produced in any given time period. It is the measurement upon which economists and politicians stake their livelihood. But endless growth of GDP assumes an endless supply of natural resources. It counts the good (e.g. new iPhones, healthcare) and the bad (e.g. oil spills and frankenstorms) and the ugly (e.g. political campaign spending) all as increments to celebrate.
There is increasing concern about the consequences of continued economic growth in a world of shrinking and non-renewable resources, as well as the impact of such growth on quality of life. Currently there are 7 billion people on the planet, projected to rise to between 8 and 10 billion by 2050.
Countries should look beyond GDP as the over-arching gauge of economic success, and adopt more efficient indicators that include human and environmental well-being. In developed countries, efforts should be taken to decrease unsustainable consumption. In developing nations, we need greater efforts to effectively reduce poverty and inequality.
James Gustave Speth, former dean of Yale University’s School of Forestry and Environmental Studies and former administrator of the United Nations Development Programme, is focusing his efforts on rethinking GDP and shifting to a post-growth economy. His most recent book is America the Possible: Manifesto for a New Economy.
Speth writes that “The never-ending drive to growth the overall United States economy has led to a ruthless international search for energy and other resources, failed at generating needed jobs, and rests on a manufactured consumerism that does not meet the deepest human needs.”
Many others have been saying this for some time, including Joseph Stiglitz (economist), David Cameron (UK prime minister), Nicolas Sarkozy (former French president), and Amartya Sen (economist), to name a few.
Within the United Nations, the recognition of new indicators has been building. Recently UN Resolution 65/309 was adopted, based on the concept of Gross National Happiness. It supports “a holistic approach to development,” recognizes the pursuit of happiness as a fundamental human goal and acknowledges that GDP does not adequately reflect happiness and well-being.
At the United Nations Conference on Sustainable Development, also called Rio+20, a standing room only session on Beyond GDP: Measuring the Future We Want, was held at the start of the meeting. Helen Clark, head of the UN Development Programme stated, “Equity, dignity, happiness, sustainability – these are all fundamental to our lives but absent in the GDP. Progress needs to be defined and measured in a way which accounts for the broader picture of human development and its context.”
In addition to these economists and NGO’s, the UK Royal Society, made up of scientists across many disciplines, has been advocating for rethinking economic growth. According to Jules Pretty, member of the Royal Society and professor of environment and society at the University of Essex, “We have to go beyond GDP; and either we can do it voluntarily or we’ll have to do it because pressure on a finite planet will in the end make us.”
The conclusion of the scientists in its report People and the Planet is that currently “there are no well charted ways for 10 billion people to achieve lifestyles like those enjoyed in the Most Developed Countries, because the only known way forward is economic growth, and that will come into collision with the finite earth. Technology can help, but without socio-political change it cannot solve. There is much work to be done.”
There are a variety of ideas on what a post-growth society could look like. Speth notes a number of policies that would improve societal and human well-being and better protect the environment. These include:
- incentives for local and locally owned production and consumption;
- rigorous environmental, health, and consumer protection (such as fees or caps on polluting emissions, true cost pricing);
- shorter workweeks and longer vacations;
- greater economic equality with genuinely progressive taxation of the rich (including a progressive consumption tax).
Society needs to prioritize protecting the planet’s ecosystems and managing its vital natural resources in an equitable manner, with an emphasis on human rights, gender equality, and environmental and social justice.
Pushing policies based on exponential growth and consumption cannot be sustained indefinitely.
Suzanne York is a senior writer with the Institute for Population Studies
photo credit: Truthout.org