There is no goal in conventional economics, except one by default: indefinite growth. In nature, this is the principle of cancer. To get back to health, it is time to give the economy a more meaningful purpose.
| This post belongs to a reading series of Doughnut Economics by Kate Raworth. For quick access to 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. |
As illustrated by a widely used contemporary textbook, economics is taught as “the study of how society manages its scarce resources.”1 Therefore, the focus is on evaluating and monitoring production conditions. This is technically accurate but does not say anything about the goal of economic activity. It is assumed that, by default, this goal is the mere production of goods and services; that is to say indefinite growth.
Since the 1950s and under the seemingly reasonable assumption that we all prefer more to less, growth has indeed been presented as the panacea for virtually all human ailments. Prosperity is supposed to provide peace through the betterment of the human condition. As Kate Raworth reminds us, moreover, that psychologically speaking “The idea of ever-growing output fits snugly with the widely used metaphor of progress being a movement forwards and upwards.”
However seductive the idea that economic growth equates to human progress might have seemed during generations, today it is increasingly questioned. Confronted with the physical limits and recycling capacities of the planet, the concept of growth needs to be refined by answering which type of growth is referred to, how it is produced, and for what.
Most importantly, these limits remind us that, as humans, we are primarily in search of meaning, not just more stuff. We know that material and financial growth is not in and of itself a measure of happiness, political stability, or even prosperity. And we know as well that there might be ways to thrive as a society without destroying the world around us by erasing biodiversity and fueling climate change. But if the concept of economic growth needs to be refined in order to serve genuine social and economic necessities, why has that not been done earlier? To answer this question, one needs to understand how economic growth became the paradigm of contemporary economics in the first place.
Footnotes
- Principles of Economics, Mankiw, N. Gregory