What kind of growth do we want?

11 May 2016. At the very latest since the Club of Rome’s report 44 years ago, we have lived with an increasing feeling of unease in respect to the foundation that economic growth is based on. Especially in wealthy countries, this unease is strengthened by the fact that, for many, it is unclear whether the lifestyle that accompanies material wealth is beneficial to a successful life, or whether – unlike in countries with material poverty, where economic growth can do much good – it has, in fact, become part of the problem: Growth, measured by a country’s gross national product, is not a good measure for a society’s wellbeing.

Too many important aspects of what is important for society are ignored. Additionally, economic growth is accompanied by shrinkages in areas that are not directly tied to the economy, such as biodiversity. Furthermore, economic growth is based on the availability of energy, whose sustainability we can only speculate on. Many agree that global population growth is too large. At the same time, people fear declining populations in their own societies. Therefore, is growth a question of perspective; is it one of values?

At the same time, we see people reflexively clinging on to the idea of economic growth, especially, in order to cope with the numerous crises. The notion of secular stagnation is a threat: the idea of material growth seems attractive for one’s own life. Moreover, on a social level, the problems of private and government debt, of social security systems etc., are based on a chain-letter logic that becomes increasingly difficult to sustain the lower the growth is. It also appears that civil-society values, such as tolerance, sincerity and trust in democratic processes, have often been damaged in times of economic stagnation and shrinkage, especially of the middle class, both in the past and at present.

How can we handle this tension? Is there an irresolvable conflict between economic growth and sustainability, or respect for larger ethical considerations, such as the preservation of biosystems, and something like life satisfaction? Two theses on that:

1. If we look at many of the problems people want to solve with economic growth, we see that they are essentially distribution problems. This applies not only within a single generation, in terms of income distribution and life opportunities, but also between generations, in terms of funding social security systems, government debt, as well as the effects of our past and present actions on the environment, in which our children will live. Economic growth seemingly solves conflicts of interest by promising every demographic group that it will be among the winners. However, as long as the sources of future and sustainable growth are speculative, it is an imperative of prudence to see distribution questions for what they are, and look for fair social models that are approved, even when they are not based on the promise of future growth.

2. In western societies, a higher gross national product does not automatically translate to longer life expectancy, better health and more life satisfaction anymore. The reasons for this are complex. Certainly, one aspect is that needs for social recognition and status cannot all be met through quantitative growth, because they are relational. Likewise, crucial needs do not fit well into goods-and-market logic. Growth is not only central to capitalist thinking; it has always been central to philosophical and spiritual thinking. However, almost always and independent of the specific tradition, that focus was not on “external” but on “inner” growth, on autonomy. The successful life is seen as one where we make ourselves independent of material needs and thinking in terms of status. From this perspective, growth of the inner self can actually be in conflict with economic growth, if the physiological basic needs are satisfied. Recently, this thesis is finding much recognition in different psychological lines of research. Perhaps it is more modern than we think.

Bild: Photocase / giftgruen