As the world teeters on the brink of financial armageddon (hyperbolic? Moi?) citizens are judging politicians increasingly on whether or not they can deliver growth to national economies. In the UK, for example, the government finds itself under attack after growth figures for the spring were somewhat lower than expected. Voters are, understandably, much more resistant to swingeing public sector cuts if they can’t see progress.
We’ve had a suggestion from Peter Schellink, however, who puts forward the idea that our current obsession with “growth” is misguided. Instead, we should be focusing on other factors, such as innovation and how much our actions contribute to the “wellness of the community”.
Many are sceptical. Former European Commission Director General (DG) for Industry, Riccardo Perissich, had this to say when we interviewed him:
I may be too old, but I think that is a hoax. I don’t believe in it. I think that sustainability comes with technology, technology comes with investment and in order to finance investment you need economic growth.
On the other hand, is it even possible to keep growing year after year without end? Friends of Europe recently hosted an event at which Karl Falkenburg, the Director-General of the Environment, spoke. Mr Falkenburg warned that Europe needed to rethink how it produces goods and services in all sectors of the economy. The Polish Environment Minister, Andrzej Kraszewski, was even more forthright in arguing that growth is fundamentally unsustainable. “Economic growth will lead us to a dead end”, he said.
On the other hand, would rejecting growth also effectively be abandoning those struggling to escape from lives of poverty? The Asian Development Bank’s Asia 2050 study (PDF) predicts that, by 2050, some 3 billion Asians could be lifted out of poverty thanks to booming regional economies. The Arab Spring has demonstrated what happens to countries that can’t deliver economic development to their citizens. Economic growth might not be environmentally sustainable, but is an absence of economic growth socially sustainable?
I believe to an extent that economic growth may not be fully necessary. However, I must say that without economic growth what position would we be in now in this country without development and status above that of the less developed countries. We require economic growth to fuel the ever growing population and in order to not be left behind technologically.
27/07/2017 Dr. Michael Mandel, Chief Economic Strategist at the Progressive Policy Institute, a Washington-based think-tank that promotes innovation and growth in a knowledge-based economy, has responded to this comment.
The matter isn’t if we should grow, but how. It’s been more than 10 years since Mr Rifkin pubblished “The european dream”. I would love a rigorous debate on matters like GIP calculations and growth model.
I would not like to live in a country in which producing dangerous environmental wastes will contribute to a figure of growth.
My impression is that economic growth is a relatively recent obsession and is primarily about raising living standards, which in my opinion were high enough in the 1950’s. In Australia, growth funds ever higher living standards while ensuring that there is no money available for domestic investment. Hence the willingness to sell our national and strategic assets to the Chinese Communist Party. Further, I believe that raising living standards is not the answer to poverty. It simply puts the bar higher still.