ERROR
Main Error Mesage Here
More detailed message would go here to provide context for the user and how to proceed
ERROR
Main Error Mesage Here
More detailed message would go here to provide context for the user and how to proceed
search
Close Nav

Growth Is Still Our Best Hope

back to top
eye on the news

Growth Is Still Our Best Hope

The idea that stopping economic expansion will solve any of our global problems is deeply misguided. November 21, 2022
Economy, finance, and budgets

During a meeting several years ago, as I started to explain to my colleagues how different economic policies could boost growth, a young staffer interrupted me. He announced—quickly, so he could get it all out in one breath—that growth should not be a policy objective anymore, because it destroys the environment. I was stunned—but even more so because many of the younger staffers agreed with him.

But I should have known then that this idea of “degrowth,” like many bad ideas that have taken hold lately, was here to stay. In fact, the idea has been around for a long time already. This latest incarnation began with French social philosopher André Gorz in 1972 and gained some popularity among academics and anti-capitalists. Lately, however, interest in the idea has expanded from activists and idealistic journalists to scientists, academics (including Japanese political theorist Kohei Saito), politicians, and even Steven Chu, a Nobel laureate, professor of physics at Stanford University, and Barack Obama’s energy secretary.

Adherents of the degrowth philosophy believe that economic growth harms the planet, and that stopping it is our best hope to avert environmental catastrophe. London School of Economics anthropologist and degrowth proponent Jason Hickel explained that the philosophy does not aim explicitly to shrink GDP, but it does think that people should consume much less and accepts that GDP will probably fall as a result.

Extreme environmentalists tend to associate themselves with the degrowth movement, but the disposition exists in more mainstream circles for other reasons. Most politicians won’t come out and say that they are against growth. It has been a while since anyone on the left or right (except maybe Liz Truss) has talked about growth as an explicit objective without qualifiers like equity or reshoring manufacturing, both of which sacrifice growth for other aims.

The rhetoric stems from the same flawed assumption animating all de-growthers: that the global economy is zero-sum, or that if one person or country gets wealthier, someone else, or the planet as a whole, is worse off.

It is an intuitively appealing proposition. Everyone from the early mercantilists to Thomas Malthus made the same mistake. But economic reasoning and agricultural and industrial revolutions proved them wrong. Growth can make everyone better off. The reason economists are so obsessed with growth is not because we don’t care about the environment or equity but because we do. Richer countries have higher life expectancy, more leisure time, more female employment, lower infant mortality, and higher quality of life by pretty much every metric. Giving up on growth means dooming lower-income countries never to achieve these things.

Hickel concedes that if we stop growth, we will leave developing countries poor. He envisions them growing until they reach an acceptable level, while rich countries shrink a bit until we all converge at a more sustainable level of consumption. But even if we could equalize wealth and stay put, giving up on growth would leave people today and in the future worse off.

Life seemed good enough to people in the nineteenth century, because living standards were better than they were in the eighteenth century. But it would be unimaginable for us today to live without electricity or antibiotics. It is even hard to imagine going back to the 1980s, when we didn’t have smartphones, gene therapy, or as much air conditioning as we have now. Giving up on growth deprives future generations of the innovations that tomorrow holds for us.

The effort to stop growth misunderstands human nature, which thrives on the motivation to create and improve. Dooming people to stagnation deprives them of curiosity and purpose. An economy that is not growing is politically unstable and more prone to disruption.

Even if you accept the premise that we have only a few decades to achieve zero emissions or that the planet is doomed, growth remains our best hope. De-growthers are correct that endless consumption is not sustainable, but sustainable growth doesn’t come from consumption; it comes from innovation—squeezing out more growth from fewer resources. Innovation is why Malthus was proved wrong, and why a growing population did not mean running out of resources. Growth is our best hope for green technology.

It runs against our basic intuition to see that the economy is not zero-sum. The fact that so many people are open to the degrowth mindset shows how the economics profession has failed to educate the public. Sure, growth isn’t perfect; it can be uneven and cause disruption or environmental degradation. But the alternative is far worse.

Photo: ArtRachen01/iStock

Up Next
audio

The Return of Economic Reality

Risk Talking podcast
Brian Riedl, Allison Schrager November 8, 2022
Economy, finance, and budgets
Saved!
Close