The Myths of Perpetual Growth

Growthism, Pieism, an obsession with perpetual growth and some wild conspiracy theories were all on show as Liz Truss attempted to prop up her failing government at Conservative conference. Here James Mackenzie unpacks some of the myths about the paradigm of endless growth.

Growth is front and centre in the Tory Party’s ongoing meltdown, and in her speech to conference, the Prime Minister doubled down on the rhetoric around it.

Policies designed to squeeze the poorest while cutting taxes for the richest and allowing uncapped bankers’ bonuses: these are apparently all about boosting growth. You would be forgiven for thinking the growth she means is really just about expanding the already plumpest wallets. But the concept hangs over economic debates like a bad smell.

From time to time the right-most fringe of the Scottish political and media classes like to point out that the First Minister has brought Ministers into government who are opposed to growth. They’re doing it this week, even as the Truss administration strives to drag the whole concept down with it.

The argument from the left isn’t that we should aim for a smaller economy, though. It’s about asking what exactly is being made, what services are provided, for whom, by whom, and to whose benefit.

To give some obvious examples, we live in a society and economy that seems to be designed to undermine people’s mental health, and so they need more treatment, and more time with therapists or psychologists (however inadequate those resources are in this country).

That counts as an increase in economic activity, more growth, but it’s surely not something we want, collectively.

Even a car crash generates more growth than a safer journey: the replacement vehicle is new economic activity, the petrol used by the ambulances likewise, and so on. It doesn’t matter how gruesome it is, it’s all counted as part of our gross (very gross) domestic product.

Conversely, if children and their parents feel safe enough for them to walk to school, that reduces economic activity. But it increases health and happiness, and cuts parents’ bills.

Similarly, although installing insulation counts towards growth, all those energy bill savings over the lifetime of the property are anti-growth. Don’t you want to grow the economy at your own expense?

Bobby Kennedy summarised it best, less than three months before his untimely death, including the car crash example from above. He said:

“That Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities.”

Conversely, he went on, “Gross National Product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country.”

Leaving aside the intangibles at the end of that quote, important as many of them are, there are countless examples of productive activities which we should collectively do more of, all things that would count towards growth.

Radical income redistribution from rich to poor will lead to more spending and consumption, and so it should. Building better cycle paths and public transport infrastructure would boost growth. A surge in community-owned renewables and storage would build genuine wealth. Let’s do these things.

But there are also things which we must cut or stop which only look good through the lens of a sterile accountancy model, seeing only the number at the bottom of some vast spreadsheet.

Drilling and burning more oil undoubtedly adds to GDP, but it is making our planet uninhabitable. Every business flight which could have been a zoom meeting is “economic activity”, but we cannot afford it. So too a deportation flight taking a vulnerable refugee to a country they have no connections with.

This logic pervades our utterly linear economy. Throwing away a can of juice rather than recycling it creates work, drives the extraction of more raw materials, and uses more energy. Chucking an item of clothing because there’s nowhere to recycle it creates work (although so too would recycling it).

Growth – and its sibling concept, the primacy of shareholder value – are outdated ways of looking at the world, unfit frames for looking at modern problems. “Growthism” starts with a deep carelessness about what is being made and sold, who can afford what, and what a good society looks like.

But it’s actually worse than that. An objective of growth alone is not just neutral on value questions. That mindset and economic model is actively hostile to a more equal society and a more habitable planet, because it’s always more profitable to externalise your costs onto society and onto the environment. That’s what Tory Ministers actively seek when they push “pro-growth deregulation”.

As Bobby Kennedy went on to say, gross domestic product “measures everything, in short, except that which makes life worthwhile.” Let’s instead decide, as a society, what makes life worthwhile and start from there.