The meaning of growth

I began by suggesting that the obsession with economic growth has been the principal obstacle to effective global warming policies. The implication is that if the growth obstacle can be removed then the world will act. We have seen that all economic analysis concludes that the growth impediment ranges from small to extremely small; according to the models it is not so much a mountain to climb as a barely noticeable speed bump for the global economy. The Stern report only confirmed what dozens of economic modelling studies had concluded, that the cost of cutting emissions would be tiny. Even Nordhaus's dismal DICE model cannot conjure up the big numbers that would justify claims of economic ruin flowing from rapid emission-cutting. The criticisms of conservatives, whose own figures show the costs of abatement to be a fraction larger than tiny, prompt thoughts of fairies and pinheads.

Yet there is another fact that renders the unwillingness to act almost too baffling. Arguments about the economic impact of greenhouse policies are built on a vital assumption that is never mentioned, the assumption that higher incomes are worth pursuing because they improve people's wellbeing. In rich coun-tries—and the models are always conducted in rich countries and interpreted as applying to rich countries by decision-makers in those countries—there is virtually no relationship between increasing GDP and national wellbeing. Above a certain threshold, more money does not make people happier.66 To argue, as the economists implicitly do, that Americans will be measurably less happy if they have to wait until 2055 instead of 2050 to be twice as rich is absurd. Even the statisticians who compile the figures acknowledge that GDP is not a measure of the nation's wellbeing; it merely measures the value of final goods and services produced in a year. As is well known, GDP takes no account of the contribution of unpaid household work to our wellbeing or of how growth is distributed. An extra $1 billion of GDP adds the same amount to national wellbeing irrespective of whether it ends up in Bill Gates' bank account or the pockets of homeless people. Moreover, GDP often counts 'bads' as 'goods'. A murder adds around $1 million to GDP when account is taken of the damage to all those involved and the costs incurred by the police, the courts and the prison system. Murder is good for the economy. So is environmental destruction. When pressed, even the most orthodox economist will concede that GDP growth bears only an indirect relation to improvements in national wellbeing.

So if cutting emissions would have only a tiny effect on growth, and in rich countries higher growth will have no appreciable effect on our wellbeing, we are compelled to ask whether a reduction in growth really is the obstacle to action on climate change. I think the answer is that the obstacle to taking resolute action is not economic growth as such but the fixation with economic growth, the growth fetish, the unreasoning obsession that arises because growth is believed to have magical powers. When political leaders and commentators say we cannot cut emissions, or must do so only slowly, because of the effects on growth, it is the symbolism of growth rather than growth itself that they are driven to defend. If asked, some politicians will wax lyrical about how GDP does not measure our wit or our compassion, nor the joy of our children's play. Quite so; but it is another thing entirely to ask them to put a stick in the spokes of the growth machine.

So what is the symbolic meaning of growth in affluent countries? Whereas the early economists like John Stuart Mill and John Maynard Keynes believed the value of growth lay in its ability to improve living standards, economic growth has become much more. It is the mark of vitality, the bearer of dynamism, the symbol of life itself. It is what vivifies a nation, gives reality to dreams of prosperity and confers cultural superiority. If humans are naturally optimistic creatures, their hopes have become vested in economic growth. Growth is the vehicle that delivers nations and peoples from backwardness into modernity. A nation whose economy is not growing is seen to be a moribund nation, a 'basket case'. Modernity has become inseparable from high incomes generated by sustained growth; yet the fetishisation of growth is a form of pre-modern totemism. At its core, the preoccupation with growth is a religious urge, but one displaced from the genuinely sacred to the nominally profane. There are few more noble goals than to lift people out of poverty and for this reason the preoccupation of poor countries with growth is defensible. But in China and India the process involves the creation of a vast army of middle-class consumers who quickly become moulded in the image of their counterparts in the West—unreflective materialists whose desires are insatiable.

Any challenge to the pre-eminence of growth is met with howls of outrage and suggestions that the alternative is to regress, to undo all we have achieved, to return to the caves. It is useless to argue that we can have rich lives instead of lives of riches; as I will argue in the next chapter, growth provides the raw material from which we increasingly construct our sense of who we are, and to ask us to pursue goals other than growth is to ask us to repudiate the human being created by three centuries of industrialism, consumerism and modernity.

Chapter 3

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