used today, rather than the Gross Domestic Product. Formally speaking, the GDP measures the value of goods and services produced within a nation’s borders, while the GNP measures the value of goods and services produced by a nation’s citizens, whether they live within the national borders or not. There are crucial and important differences between these two measures when it comes to their use as indicators of national progress. Some ‘economic miracles’ of the last decade (Ireland and Portugal, for example) look a lot less miraculous when the GNP is used in place of the GDP.The reference to Whitman’s rifle and Speck’s knife alludes to the weapons of two infamous serial killers who terrorized America in the summer of 1966. In fact, it places the origins of this section of the speech at an earlier point in time than the Kansas visit – a suspicion confirmed by Walinsky, who remembers it first being used at an event in Salt Lake City, Utah, in 1966. There’s no formal record of that first outing.11 11. Historical data on GDP and growth rates can be found in the World Bank’s World Development Indicators Databank, online at: https://databank.worldbank.org/source/world-development-indicators.
12 12. Critique of growth: d’Alisa et al. 2014; Jackson 2017; Kallis et al. 2020; Raworth 2017; Trebeck and Williams 2019; Victor 2019.
13 13. On JFK, Carson and Douglas see: https://www.audubon.org/magazine/may-june-2012/rachel-carson-and-jfk-environmental-tag-team.
14 14. See Introduction to Galbraith 1958, p. xi.
15 15. Schlesinger 1956, p. 10.
16 16. EU: https://ec.europa.eu/environment/beyond_gdp/background_en.html. OECD: https://www.oecd.org/statistics/measuring-economic-social-progress/. World Economic Forum: https://www.weforum.org/agenda/2020/01/gdp-alternatives-growth-change-economic-development/. Lunatics etc.: see Jackson 2017, p. 21. Prime Ministers: https://www.gov.uk/government/speeches/pm-speech-on-wellbeing.
17 17. For an overview, see Corlet Walker and Jackson 2019. See also: Kubiszewski et al. 2013; https://treasury.govt.nz/information-and-services/nz-economy/higher-living-standards/our-living-standards-framework.
18 18. Stiglitz: https://www.theguardian.com/commentisfree/2019/nov/24/metrics-gdp-economic-performance-social-progress.
19 19. Daly 1968. For a discussion of the paper – and the circumstances of publication – see Victor 2021, Chapter 4.
20 20. Daly’s work was also influenced by his doctoral supervisor, the Romanian-born mathematician Nicholas Georgescu-Roegen, who at that point was preoccupied with the fundamentally ‘entropic’ nature of the economy as a thermodynamic system. More of that in Chapter 5.
21 21. Ecological economics: Common and Stagl 2005; Costanza 1991; Daly and Cobb 1989; Daly and Farley 2011; Martinez-Alier 1991. See also the journal Ecological Economics: https://www.journals.elsevier.com/ecological-economics. Steady state: Daly 1974, pp. 15–16; see also Daly 1977; 2014.
22 22. Mill 1848, p. 593.
23 23. Kennedy’s shooting, see Newfield 1969, pp. 289–304. See also: http://jfk.hood.edu/Collection/Weisberg%20Subject%20Index%20Files/K%20Disk/Kennedy%20Robert%20F%20Assassination%20Clips/Item%20054.pdf.
2 Who Killed Capitalism?
‘As a capitalist, I believe it’s time to say out loud what we all know to be true: Capitalism, as we know it, is dead.’
Marc Benioff, 20191
‘Shamed, dishonoured, wading in blood and dripping with filth, thus capitalist society stands.’
Rosa Luxemburg, 19152
In a curious incident, during the run-up to the 2016 Brexit Referendum in the UK, a British academic was trying to persuade a public meeting of the dangers awaiting the country if it cast itself adrift from membership of the European Union. The impact on the GDP would dwarf any savings the UK might make from its budget contributions to the EU, the expert told the crowd. ‘That’s your bloody GDP!’ shouted a woman in the audience. ‘It’s not ours!’3
Behind this angry remark lay a host of uncomfortable truths. That almost a decade after the financial crisis, economic growth had failed to return to its pre-crisis trend. That successive years of austerity had made the lives of the poorest harsher. That faith in the expertise of economists and politicians had been severely eroded along the way. That statistics had become weaponized in the interests of elite minorities. That, in a ‘post-truth’ era, numbers themselves no longer held sway as immutable facts.4
But above all, the anger betrayed an undeniable sense of loss: a loss of faith in the myth of growth. The continual expansion of the economy – growth in the GDP – had been synonymous with the idea of social progress for as long as anyone could remember. But that cosy idea no longer reflected the reality of everyday life for ordinary people in one of the most advanced economies of the world. Beyond the fury of the crowd lay the discernible rumbling of a cultural myth beginning to fall apart.
Strangely, that loss of faith wasn’t just confined to those left behind by the economic system. It has appeared in the most unlikely places. Sometimes at the heart of the establishment. A walk-on part for the postgrowth society was not the only evidence that things were changing in Davos. One of the world’s largest banks chose the 2020 World Economic Forum to hold a week-long series of discussions under the title ‘Is Growth an Illusion?’5
Is growth an illusion?
It had been a bad year (indeed a difficult decade) for Deutsche Bank. Rocked by controversy over its financial dealings with the Trump empire and still recovering from litigation settlements which dated from before the financial crisis, it had posted two consecutive quarters of substantial losses immediately prior to Davos. Its $1.4 trillion assets still placed it as the seventeenth largest bank in the world in 2020. But those assets had fallen dramatically from a pre-crisis peak of $3.6 trillion. Growth was almost literally an illusion for the ailing giant.6
It has been increasingly elusive for the advanced economies as a whole. The 5% growth rates typical of the US economy in 1968 are now long gone. By the start of 2020, even before the pandemic, the average rate of growth across the OECD nations was barely 2%. If we measure the average growth rate per person over these periods – a better indicator of what economists call living standards – the decline is even more obvious.
