Gross domestic problem: a crisis of growth

2016-06-08 22:11

So the first quarter growth numbers of 2016 are in and it’s almost the end of the second quarter.

And, once again, I’m not any less annoyed with these quarterly economic growth rates, projections, snapshots and forecasts. Nowadays, it should be unsurprising to find “undue” hubbub over such horrific quarterly growth figures, as we continue to expect that things can only get better.

Like the economics profession, economic growth as a measure for progress remains dismal, unreservedly relying on the concept of infinite growth and wittingly ignoring the social, cultural and environmental dimensions of society. It only works as long as market opportunities and the market for goods and services continues to grow; new products replace old ones and new loans pay back old debt.

How can we expect to get months upon months of consecutive positive growth? How can we expect banks to give out thousands of rand of new loans each month based on “new growth”? Each month banks give new loans to new and innovative market opportunities and the market for goods and services feeds a culture of conspicuous consumption, reflecting positively an uptick in economic growth. And we watch knowingly how the poor persistently hemorrhages away their money, creating the pretense for wondrous economic growth, but inevitably masking their own financial fragility.

The system is broken.

I hate to sound like an environmentalist prude, but growth domestic product is a lie. A measure that should reflect economic performance has little to do with the social aspects of society and the moral principles of equity, social justice and redistribution. It includes only things with a “price tag” and fails to take into account the informal sectors of an economy, the voluntary activities, the odd jobs and anything that remotely reinforces social cohesion and may in fact help growth. It has flouted environmentalists’ concerns as it takes no account of the depletion of natural resources, nor does it take into account the social injustices and environmental degradation that happens as a result.

Growth today has become a means of economic activity rather than an ends. Synonymous to overconsumption, it has almost completely relied upon consumption as a measure of economic progress, failing to take into account any rapid accumulation of debt. Instead we should introduce policies that improve individual well-being not by “more is better”, but through more non-consumptive means, distributing tax burdens more equitably, sharing work hours better, strengthening cultural and community resilience, and restoring the earth’s ecosystems. We must disabuse ourselves of the notion that prosperity means growth, and “a consumer lifestyle” that depends on growth as a driver of development and the exhaustion of natural resources.

And yet free market economists, who dictate economic policy will always continue to tell us that we need growth.

But whether we like it or not, degrowth is inevitable because we live on a planet with finite resources, and I hope that we’ll start to realize sooner than later that economies and countries cannot continue to grow infinitely.

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