Dangerous myth of infinite economic growth exposed

Regular ThinkOrSwim readers will know that your correspondent is not a noted fan of mainstream economics, or most of its practitioners, for that matter. They have, in my view, done untold damage in impeding societal and political understanding of and response to the unfolding ecological emergency. 

Nobody, in my book, has explained this more clearly than Australian economist and economics debunker, Steve Keen. His cracking paper, ‘The appallingly bad neoclassical economics of climate change’ is required reading. 

What caught my eye in preparing the article below for the Business Post in June, was a research paper published by the European Environment Agency challenging the inevitability of, wait for it, economic growth.

ANYONE WHO believes exponential growth can go on forever in a finite world “is either a madman or an economist,” quipped US economist and author, Kenneth Boulding. Even the 19th century father of liberal economics, John Stuart Mill, wrote extensively of the desirability of a ‘stationary state’ as the ideal model for a stable, sustainable society, but his warnings went unheeded in the race for growth.

A rare glimpse into the everyday madness of globalised hyper-consumption emerged this week, with the revelation that Amazon, the giant online retailer, which last year reported €325 billion in sales, routinely destroys millions of unsold items. Such “losses” are a trivial part of its globalised business model.

Practices like this are symptoms of the wider global crisis of chronic overproduction and over-consumption and the rapidly escalating toll it is taking on the wider biosphere.

Global output has grown more than eight-fold since 1950, a period now termed the Great Acceleration. It is no coincidence that in just the last half-century, two thirds of all the wild mammals, fish, birds and reptiles on Earth, products of countless millions of years of evolution, have been lost, along with vast swathes of their natural habitats.

Scientists in recent years coined the term ‘biological annihilation’ to describe the devastating scale and consequences of the wholescale extirpation of the natural world that has marched in lock-step with humanity’s seemingly insatiable hunger for resources.

Notwithstanding its impacts on the natural world, had the fruits of this dramatic economic expansion been shared equitably, hunger and poverty would have been eliminated decades ago, and every person on Earth given access to affordable healthcare and education.

However, despite our vastly larger global economy, according to the World Bank, today more than half the world’s population live on less than €5 a day, while the world’s 2,000-plus billionaires now control more wealth than the 4.6 billion poorest people on the planet.

In tandem with the ongoing biodiversity collapse, the global climatic system is being destabilised by the rapid increase in the amount of heat-trapping greenhouse gases being ejected into the atmosphere. This is mainly as a result of the vast quantities of fossil fuels that have been burned to power this explosive increase in human economic footprint.

According to a newly published briefing paper from the European Environment Agency (EEA) titled ‘Growth without economic growth’, the ongoing loss of biodiversity, climate change, pollution and loss of natural capital “is tightly coupled to economic activities and economic growth…and full decoupling of economic growth and resource consumption may not be possible.”

Human civilisation is, it warns, “currently profoundly unsustainable,” and drastic changes are now essential. The EEA paper breaks with the usual incrementalist approach by noting that absolute reductions in environmental pressures and impacts “would require fundamental transformations to a different type of economy and society, instead of incremental efficiency gains within established production and consumption systems.”

The idea of ‘green growth’, while clearly better than its conventional alternative, still offers no panacea for problems associated with growth itself. The notion of a ‘circular economy’ is gaining traction internationally, but in the case of the EU, only around 12 per cent of the total material throughput in 2019 was being recycled.

The laws of thermodynamics explain why recycling can only ever reclaim a small amount of the primary energy that is used and degraded in extraction, production, distribution, consumption and disposal of resources. In fact, high throughput and low rates of recycling “appear to be conditions for high productivity”.

As anthropologist and author, Joseph A Tainter noted, advanced societies require huge flows of energy and materials to maintain their organisational complexity. We are now being confronted on an almost daily basis by the limits of our planet’s ability to maintain the optimal conditions for life while being polluted and degraded.

Despite this, there is still little sign that the dominant economic philosophy predicated on the assumption of infinite growth is preparing to yield one inch to biophysical reality. Growth, the EEA notes, “is culturally, politically and institutionally ingrained”, and the very legitimacy of most governments, including our own, is judged by their ability to deliver economic growth.

If the deepening impacts of untrammelled growth are taking us to the precipice, what are the realistic alternatives? Various schools, such as the degrowth and post-growth movements, involve efforts to break the apparent link between human well-being and economic growth and to realign humanity towards other, less destructive forms of self-actualisation.

Consumerism is itself an artifice, created by clever marketers to sell ever more products. In 1955, US retail economist, Victor Lebow laid out the template candidly: “our enormously productive economy demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual and our ego satisfaction in consumption. We need things consumed, burned up, worn out, replaced and discarded at an ever-increasing rate.”

In repudiating this atavistic philosophy, the EEA briefing calls instead on our better angels: “while the planet is finite in its biophysical sense, infinite growth in human existential values, such as beauty, love, and kindness, as well as in ethics, may be possible.”

The European heritage, the agency argues, is not just about material consumption. “The fundamental values of the EU are human dignity, freedom, democracy, equality and the rule of law, and they cannot be reduced to or substituted by an increase in GDP.”

Critics might argue that the true European heritage must also acknowledge its roots in violent colonialism and its role today in consuming far more than its fair share of the world’s finite resources, while using its political and economic power to continue to exploit poorer countries in the Global South.

The enduring legacy of the covid pandemic in the era of climate change may yet be a decisive shift of human consciousness and an awareness both of our shared humanity and our acute vulnerability to environmental shocks. Whether this happens in time to avert disaster, or at all, remains in the balance.

  • John Gibbons is an environmental commentator and co-author of the Routledge Handbook of Environmental Journalism

ThinkOrSwim is a blog by journalist John Gibbons focusing on the inter-related crises involving climate change, sustainability, resource depletion, energy and biodiversity loss
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One Response to Dangerous myth of infinite economic growth exposed

  1. David Kiernan says:

    Humans are too stupid to change their ways.

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