Deep Thinking about Deep Recession VI: Questioning “Growth” and “One Big Number”

Relative Size of Nation’s GDP

Globalization. Digitization. Green Consumerism. All of them, as we’ve read in the last few posts, reducing economic growth, as measured by our most popular measures. Driving us deeper and deeper into this deep recession.

What’s the problem? What’s the problem with the current solutions being offered by world governments like the G20 alliance? What’s the problem with stoking the economy, with massive Keynesian spending projects matched by huge debt and enormous deficits? With building the IMF into the overfunded, legitimizing cavalry?

The problem is we’re working with the same flawed system. We’re legitimizing it and patching it with bandaids while we pump it full of borrowed-from-our-future resources. We’re measuring growth in the same flawed ways. We’re reifying expenditures and consumption levels far, far, over their sustainable, or even long-term workable, levels. We’re using GNP and GDP as the One Big Number. One Number to Rule them all. One Number to Bind Them to a system.

There’s a big problem with that. And it requires us to look at the One Big Number and question it. And question it again.

“The world has changed and we must change with it.” Isn’t that what President Obama said in his inauguration speech? Well, I think that real change has to start with changes in what we’re measuring, with how we are keeping score.

Gross National Product and Gross Domestic Product just aren’t doing the job anymore. Maybe we don’t need replace them entirely. But maybe we can supplement them, bring in something different. Or make them more subtle, less universal and totalized. Bring a little postmodern reflexive doubt into the economic realm, for once.

One of the best books I’ve read on this topic is by my York University colleague Peter Victor. Peter’s book is called “Managing Without Growth: Slower by Design, Not Disaster (Advances in Ecological Economics).”

Prof. Victor talks about how we have gotten into this mindframe where “economic” “growth,” measured and defined in certain very rigid ways (what I’m calling the “One Big Number” problem) by those with entrenched interests (One Big Number is easier to Rule With, remember), has become the over-arching policy objective of countries around the world, the way that governments, corporations, teams, and individuals are assessed, and the way that resources become allocated. Economic Growth is actually a fairly new ideology, emerging only about a half century ago, and Peter shows how it has become rooted to the loaded ideology of the notion of ‘progress.’

Peter argues three points convincingly.

  1. First, that economic growth the way we’ve been doing it just isn’t sustainable in the long term. Period.
  2. Secondly, he repeats the established finding that economic growth and income growth doesn’t seem to lead to happiness. There’s an inverted U-relationship. If you’re destitute, increases in income increase happiness, to some point. After that point, happiness tails off. In my observations of people, I’d say this works fairly well on an individual level, too.
  3. Finally, he shows that economic growth doesn’t and probably won’t ever, eliminate poverty. It does, however, increase greenhouse gas emissions, and has lots of related consequences for the natural environment.

His work is related to the work by the Club of Rome, recent updated in The Limits to growth: A report for the Club of Rome’s Project on the Predicament of Mankind, where we see that, eventually, growth stalls out, flattens, declines, and then major disruptions in the biosphere begin to play havoc with human life.

This thinking raises some extremely important questions. These are the kinds of ideological, paradigmatic questions that the recent G20 activism, that the cracks in the global financial accord should draw us towards.

These are “Second Chance” questions to try to get out system on a better path.

These questions show us how accounting (well, at least measurement) is a critical component of making the world a better place. They ask us:

  • What should we be focusing on?
  • What should we be measuring as well as financial growth?
  • How can we develop qualitatively as a society? What would that look like?
  • Can we measure global equality and opportunity, instead of residual measures like GDP?
  • Can we measure human happiness and welfare? Can we maximize it, while minimizing the impact on the environment?
  • Can we measure the health and stability of our communities?
  • What would a carbon-neutral economic measure look like?
  • What would a zero-impact on habitat destruction look like?
  • What would a sustainability measure, or set of measures, look like?
  • What are the contributions of mental health, optimism, joyfulness, and spirituality to these other measures? How would we factor them in?
  • What would business look like in such a world? What would marketing become?

We need thoughtful answers. And we need them soon.