150 years ago, things weren’t so clear-cut. Darwin was sailing into choppy waters. The Church of England set rigid boundaries on scientific thought and his thesis was clearly offside – a challenge to the orthodox Biblical view that humans were a separate, unique part of God’s creation and that all life was divinely concocted and unchangeable. The establishment mocked him. There was intense public debate. But Darwin stood his ground and eventually, with the support of Thomas Huxley (aka ‘Darwin’s bulldog’) and others, his radical insights found acceptance.
Darwin’s core idea that all animals and plants evolve and adapt through natural selection is now the bedrock of modern life sciences. He unlocked the door to a new way of understanding the history of life on Earth – although ‘junk science’ theorists, religious fundamentalists and ‘intelligent design’ proponents are still trying to slam it shut.
History of an idea
For most of human history, economic growth was a mere blip. Societies developed slowly, economies were founded on subsistence and growth was minimal. Only the last eight generations of humans have experienced consistent growth (out of an estimated 125,000 generations in total). ‘Historically, steady state is the normal condition; growth is an aberration.’2
The modern idea of growth is a product of the 17th- and 18th-century European Enlightenment that challenged traditional views of religion and humankind’s place in the cosmos. Thinkers like John Locke in England, David Hume in Scotland, Voltaire in France and Thomas Paine in the US mapped out this new intellectual terrain.
This rupture with tradition changed age-old cyclical thinking to sequential thinking, unleashed democratic political movements and ushered in the rule of law. The idea of progress became paramount: the notion that history has a direction, which is the gradual improvement of the human condition. The rise of science and the empirical method merged with improved technologies (the steam engine, gunpowder, the printing press), stimulating early capitalism. Economic growth became synonymous with social progress, development and human improvement. European colonialism then spread the ‘growth equals progress’ idea around the world.
But it wasn’t until the Second World War that our modern understanding of growth began to enter the consciousness of governments and international agencies. According to one scholar, ‘there is hardly a trace of interest in economic growth as a policy objective in the official or professional literature of Western countries before 1950’. Pumping up the war machine proved that growth could be rapid, if necessary, and pointed the way to future expansion. In 1943 the US National Resources Planning Board reported to President Roosevelt: ‘Our expanding economy is likely to surpass the wildest estimates of a few years back and is capable of bringing to all of our people freedom, security and adventure in richer measure than ever before in history.’3 Less than two decades later, the future US President Ronald Reagan summed up this view during his stint as host of a hugely popular 1950s TV drama programme sponsored by General Electric. Every Sunday night a young, rock-jawed Reagan confidently told American viewers: ‘Progress is our most important product.’
In his 1978 book, The Rise and Fall of Economic Growth, HW Arndt adds that a statement by the US Council of Economic Advisors in October 1949 ‘was perhaps the first explicit official pronouncement in favour of economic growth as a policy objective in any Western country’. With the arrival of the ‘Cold War’ in the 1950s and growing tensions between the Soviet Union and the West the notion of growth took on another dimension. Increasing per-capita GDP was trumpeted as a measure of who was winning the battle between two contending economic systems. Within a few decades, growth became the ultimate metric of progress and economic health around the world. As Arndt notes, the case for economic growth was based on the belief that steady, rapid and indefinitely increasing productive capacity was the key to higher living standards, which were both ‘desirable and demanded’ by the citizenry of the world.
This slavish devotion to growth economics still dominates the mindset of governments, mainstream economists and their uncritical boosters in the media, trade unions, big business and academia. All major power groups in society now assume that a growing economy is the sine qua non of social progress. As long as a rising tide lifts all boats, it’s full steam ahead and we can avoid hard choices.
As the former World Bank Chief Economist and ex-president of Harvard University, Lawrence Summers, put it: ‘We cannot and will not accept a “speed limit” on American economic growth. It is the task of economic policy to grow the economy as rapidly, sustainably and inclusively as possible.’4
Adapted from Peter A Victor, Managing without growth, Edward Elgar, 2008.
Darwin’s long battle has disturbing echoes today. Like his detractors in Victorian England, we are also mired in an illusion that blocks our understanding of critical forces at work in the world. But the myth that envelops us – our blind faith in limitless economic growth – is more dangerous and even more deeply rooted.
We have abiding faith that the economy will grow forever, that there are no limits to the wealth we can create from the natural resources of this bountiful planet. Our financial systems are premised on growth; government policies are based on growth; corporate profits, jobs and incomes are hitched to growth.
Growth equals prosperity. The equation has been drummed into us for so long that it has become received wisdom. Growth brings employment, wealth, material and social progress, happiness and stability. Growth is the key to combating poverty. It makes the world a better place.
Indeed, an unwavering belief in progress is the quintessential modern idea. History is linear. Science, technology, democratic governance and liberal humanism greased by native ingenuity, will lead to the improvement of the human species. And economic growth is the vehicle for arriving at that destination.
Loosening bolts in the growth engine
But lately the bolts have begun to loosen in the growth engine. The global environment is under severe stress and has already been irreparably damaged. In 2005 the UN Millennium Ecosystem Assessment, a collaborative work of more than 10,000 scientists, found 60 per cent of ‘ecosystem services’ – things like climate regulation, the water cycle, pollination, global fisheries, natural waste treatment – were degraded or being used unsustainably.
‘Human activity is putting such a heavy strain on the natural functions of the Earth,’ the report warned, ‘that the ability of the planet’s ecosystems to sustain human endeavor can no longer be taken for granted.’
But discounting the environment is only part of the problem – and one that we will explore in depth in a later chapter. There are also a growing number of thinkers who are beginning to challenge the status quo in fundamental ways by asking hard questions.
What if the emperor has no clothes? What if endless economic growth is a chimera that causes more problems that it solves?
Many ecologists believe we have entered an era of ‘uneconomic growth’ where more fevered economic activity actually depresses living standards and levels of happiness. It doesn’t take much of a stretch to see what they mean. We can have a booming economy alongside growing inequality and fewer jobs – i.e. jobless growth. We can have shopping malls full of digital gadgets and showrooms replete with bigger, shinier automobiles – but how much better off are we if we spend three hours a day in traffic jams, worry over bigger debts and have less time for ourselves and our families? The volume and pace of growth tell us nothing about the quality of growth. And shouldn’t that be our main concern?
But before we get too
