Beyond Economic Growth

Does economic growth by its nature include positive development, or vice-versa? I certainly don’t think so. These concepts are not always positively correlated, and it is a mistake to use the terms interchangeably.

Paul Hawken said it best in The Ecology of Commerce:

“A growing economy is getting bigger; a developing economy is getting better.”

It would make logical sense to focus the brunt of our efforts on the development of our economy, but a quick browsing of the Wall Street Journal or a few minutes of watching CNBC proves this is not the case. The GDP apparently is the all-important measuring stick. It’s simple, really. GDP falling = bad, GDP rising = good. Most economic policy is based in some way off of this assumption. Sadly though, it’s an assumption that desperately needs to be challenged.

Just because something is growing does not automatically it is improving. As it is, we ask “Is our economy growing?” and “Are profits rising?”. If we can answer yes to both of these questions, then the economy is generally thought to be moving in the right direction.

But what about the questions that really matter?

• Are people genuinely better off, or happier, now than before (not just materially)?
• Are businesses adding actual value?
• Are we becoming healthier?
• Are our ways sustainable?
• Are the 49ers in the playoff hunt?

These are questions of development, and they unfortunately get less attention than the questions of growth.

I’d like to point out two industries in which growth clearly takes precedence over development.

1.) Energy:

The fossil fuel energy sector grows by degrading the planet and exploiting its resources. Ecosystems are destroyed by expanded drilling and mining. More CO2 is released in the atmosphere as we burn fossil fuels, and we remain ever-addicted to finite, dirty sources of energy. Yet, the economy, as measured by GDP, grows, and supposedly this is good. This is economic “progress”.

On the other hand, energy development might not increase the GDP much, but we would certainly be better off. We could make our transportation more efficient, walking, biking, and utilizing public transportation more than we do (bonus: Americans get more exercise!). We could build more efficient buildings, or better yet, retrofit the buildings we already have to be more efficient. We could foster the development of food networks that provide locally-grown options. In this environment development would take precedence over unconditional growth; any growth that results is a byproduct of achieving true progress.

The alternative energy field represents an area where growth and development are in alignment. Installing wind turbines helps the economy grow and develop at the same time, as we simultaneously reduce our dependence on dirty fuels. This is desirable as well, but we should not expect to solve the energy and climate crises simply on growth alone.

2.) Health Care:

Isn’t it ironic how the “health” care industry grows as people become more and more unhealthy? Sick care would clearly be a more appropriate name.

This is an industry that thrives on treatment, not prevention, because treatment is where the big bucks are. When people are sick (or think they are), we can prescribe them expensive pills and put them through expensive treatments. This boosts the profit of everyone from shareholders of Merck to the physician down the street, and the GDP grows (as health-care costs and insurance premiums skyrocket). This is clearly another instance where growth does not equal progress, yet the nightly news would be giddy over the rising economic figures.

Instead, if we put aside our concerns for the stock prices of the pharmaceutical companies and focused on development, we would be immensely better off. We could actually concentrate on, rather than paying lip-service to, preventative medicine; simple things like eating healthier and exercising. Instead of sending an obese person home from the doctor with a handful of new prescriptions, they would be sent home with an earful about their couch-potato lifestyle and poor eating habits.

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Eventually, we will need a new economic paradigm that isn’t entirely dependent upon infinite growth. This shouldn’t be a surprise, given that our resources are finite in nature. In fact, we’re probably already close to surpassing (if we haven’t already) our planet’s sustainable carrying capacity.

Such a model is hard to fathom right now, as our entire capitalistic structure is supported by future growth prospects, but there are ways us individuals can do our part. Most of them have to do with minimizing our negative impact on the planet, and/or taking better care of ourselves.

• Use less energy.
• Use more human-powered transportation.
• Reduce, reuse, recycle.
• Shop for value and longevity rather than the cheapest price.
• Fully wear things out before discarding.
• Eat locally grown food.
• Scrutinize your wants vs. your needs.
• Exercise consistently and eat healthy.

In the grand scheme of things, some of these actions may seem miniscule. I believe in the extraordinary potential that grassroots movements have though (Ron Paul 08! haha). As more and more people begin to take notice of these vitally important issues, I think we’ll naturally move towards a society that rightfully values development above all else.