Despite the obvious absurdity of taxing our finite planet to infinity, growth remains the exclusive economic goal most officials in power cling to. What can explain their sobering lack of vision?
| This post is part of a reading series on Doughnut Economics by Kate Raworth. To quickly access all chapters, please click here. Disclaimer: This chapter summary is personal work and an invitation to read the book itself for a detailed view of all the author’s ideas. |
“The twentieth century bequeathed to us economies that need to grow, whether or not they make us thrive, and we are now living through the social and ecological fallout of that inheritance. Twenty-first-century economists, especially those in today’s high-income countries, now face a challenge that their predecessors did not have to contemplate: to create economies that make us thrive, whether or not they grow.” This calls, adds the author, for “transforming the financial, political and social structures that have made our economies and societies come to expect, demand and depend upon growth.”
Too Dangerous to Draw
GDP growth has been universally adopted as the de facto goal of economic policy, but “the textbooks never actually depict how it is expected to evolve over the long-term.” The tip of the GDP exponential growth curve is simply left suspended in mid-air, implying that it keeps rising indefinitely. As an example of what this means, let’s take a GDP growth rate of 3 percent on average worldwide.1 This equates to doubling the economic output every 23 years. Taking 2015, for instance, as a year of reference, the size of the economy is then supposed to become 10 times bigger in 2100 and almost 240 times in 2200! As Simon Kuznets, the father of GDP as a measurement tool, pointed out, “Objectives should be explicit: goals for ‘more’ growth should specify more growth of what and for what.”2 Though he was primarily speaking from a technical standpoint for the use of the GDP metric, his advice rings true when considering that we live on a finite planet. Instead of becoming knowledgeable about this required qualitative analysis, unfortunately, most policymakers prefer worshiping growth rather than questioning it.