Can Our Economy Grow Forever?, 49°

John P. 199°

Over the last twenty years the government where I live (Ireland) has put a lot of emphasis on growing our economy. The economy has grown, but has it benefited the average person? Yes, people have more money, bigger houses and more stuff. However, they also have a lot more stress and I would argue a lower quality of life in some cases.

Twenty years ago I used to walk, or cycle to work. Now, I take a bus or train journey that lasts nearly two hours each way. I work longer hours and have more bills.

With new markets emerging around the world there are also new economies. With all of these economies growing can our economy grow forever?

43 replies

The same is true here in the United States.
Longer hours, longer commutes, nope people need to focus on their time. TIME is being wasted and not being spent with our families and friends.

Written in August 2008

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I read a book on the subject a little while ago.

Growth Fetish is a book about economics and politics by the Australian liberal political theorist Clive Hamilton. Published in 2003[1] it became a best-seller in Australia, an unusual feat for what is normally considered a dry subject.

The book argues that the policies of unfettered capitalism pursued by the west for the last 50 years has largely failed, since the underlying purpose of the creation of wealth is happiness, and Hamilton contends that people in general are no happier now than 50 years ago, despite the huge increase in personal wealth. In fact, he suggests that the reverse is true. He states that the pursuit of growth[disambiguation needed] has become a fetish, in that it is seen as a universal magic cure for all of society's ills. Hamilton also proposes that the pursuit of growth has been at a tremendous cost in terms of the environment, erosion of democracy, and the values of society as a whole. One result is that we, as a society, have become obsessed with materialism and consumerism. Hamilton's catchphrase "People buy things they don't need, with money they don't have, to impress people they don't like" neatly sums up his philosophy on consumerism.

Hamilton proposes that where a society has developed to the point at which the majority of people live reasonably comfortably, the pursuit of growth is pointless and should be curtailed. The surplus wealth could then be diverted into the essential infrastructure and to other nations that have not reached this level of wealth. Hamilton adapted the term Eudemonism to denote a political and economic model that does not depend on ever increasing and ultimately unsustainable levels of growth, but instead (page 212) "promotes the full realisation of human potential through ... proper appreciation of the sources of wellbeing", among which he identifies social relationships, job satisfaction, religious belief for some, and above all a sense of meaning and purpose.

The basic premise is that once we have guaranteed shelter, food, and health care (and need not worry about these any more), then every other "luxury" we add to our lives does NOT in fact make us happier/more satisfied, and in many cases, reduces our happiness.

I find it very ironic, that for all the economic progress made in the US, many do not have guaranteed food, shelter and least of all Health Care.

Written in August 2008

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Charles M. 110°

The biggest problem is the measurement process used by economists. Examples such as GDP are easy to measure, but do they really measure anything useful?

Most of these measurements measure **consumption** and **money flow** rather than production or value. Thus, growth follows from increased consumption.

Consider a subsistence economy where there are two people who each bake themselves a loaf of bread and their chickens lay a dozen eggs. The economy produces 2 loaves of bread and 2 dozen eggs. There is no trade so the GDP is zero.

Now these two people start to specialize: one becomes a baker and bakes two loaves of bread (one for himself and one to sell for $1). The other has chickens that lay 2 dozen eggs (one dozen for himself and another to sell for $1). Same output, but now the GDP is $2.

The same as above, but they sell their produce for $5. Same output, but the GDP increases to $10.

When measurements as broken as GDP are used to drive economic decisions, how the hell are governments going to make sane decisions?

Written in August 2008

2 people think this is a cool reply

C Robb W. 429°

To answer the question directly, no way! Eternal growth in a finite system is an impossibility. We must shift towards local self reliance, local economy built on locally used and sustainably managed resources.

Written in August 2008

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It can't grow indefinitely, because the earth's resources, and capacity to absorb waste, can only get us so far. That's the irony of our current growth-based economic model, that our definition of progress is actually heading us towards extinction.

We need to refocus on development, rather than growth per se. What can we do for a fairer, happier, safer society? That may or may not involve actual economic growth.

Written in August 2008

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John P. 199°

These are all very interesting points. I saw a documentary a few years ago on the BBC about new urbanism:

New Urbanism is an urban design movement which promotes walkable neighborhoods containing a range of housing and job types. It arose in the United States in the early 1980s, and has gradually informed many aspects of real estate development, urban planning, and municipal land-use strategies.

New Urbanism is strongly influenced by urban design standards that were prominent until the rise of the automobile in the mid-20th century; it encompasses principles such as traditional neighborhood design (TND) and transit-oriented development (TOD).[1] It is also closely related to regionalism, environmentalism and the broader concept of smart growth. The movement also includes a more pedestrian-oriented variant known as New Pedestrianism, which has its origins in a 1929 planned community in Radburn, New Jersey.[2]

The organizing body for New Urbanism is the Congress for the New Urbanism, founded in 1993. Its foundational text is the Charter of the New Urbanism, which says:


The idea was to create small sustainable environments. You know. Say I live in an apartment on caple street. I get my bread from the baker across the road and my meat from the butcher down the street. They source their produce locally and so on. I live near to where I work and can walk or cycle there. Less pollution etc. etc.

The reason this has been on my mind recently is that I used to live in a society like that. However, now everything is changing. The ancient forest near my house where people used to hunt and fish has recently been cut down to develop a massive shopping center. We seem to be making all the same mistakes over and over.

My question is. Can we ever go back to the way it was?

Written in August 2008

Charles M. 110°

Yes, an economy can grow forever..., depending on how you measure the economy.

Tangible goods, based on physical resources, might be physically finite but the "value" can be enhanced by manufacturing, branding, advertising etc: 10c of sugar and flavouring becomes a $1 soda; with a whole lot of branding and advertising it becomes a $2 Coke.

Manufactured goods are getting to be less and less of what actually makes up an economy and services are the major growth area.

Services can grow forever either by inventing new ones (web designer, dog psychologist, etc etc) or by increasing the "value" ($5 haircut -> $200 hair design).

The unfortunate part of growth in these areas is that they make more and more layers between us and the natural processes of our planet.

Can you go back? Well yes you can on a personal basis. Start by reducing your consumption, cooking your own food and growing your own veges, Sure you might not be able to do all of these immediately but there is always somewhere where you can make a start.

Written in August 2008

The economy is in a real sense constrained by the limits of the natural world. Currencies can be decoupled by inflation I think, so that we might all feel richer if we received raises year on year. In the end though, we need to spend some of that money on material goods for food and shelter.

The people providing services we pay for similarly need to purchase material goods for their own food and shelter which puts a floor under the prices they in turn charge for their services.

As energy costs go up or material goods become harder to find the price paid for material goods has to rise and the proportion of our income spent on material goods similarly rises.

So maybe not surprisingly I am finding that trying to lower my own footprint on the planet is a very direct way to lessen the impact on higher energy costs on my own pocketbook!

Thinking about the encompassed energy in a thing helps me avoid some products that keep relentlessly rising in price as all down the supply chain the energy costs have to be paid.

Written in August 2008

John P. 199°

"... all down the supply chain the energy costs have to be paid."

Indeed they do. However, aren't we seeing energy companies amass increasingly huge profits?

In everything energy seems to be the key to freedom and independance. What would it be like if individuals had the capacity to produce their own energy?

Written in August 2008

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C Robb W. 429°

I can speak from personal experience on that one John. There is no greater sense of accomplishment and empowerment, pun intended, I have experienced than going off grid, generating my own power. I highly recommend it to anyone. Start small if you have to, go off grid on one circuit, or in one room, build from there. Research it, build it, enjoy it!

Written in August 2008

2 people think this is a cool reply

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