Apologists for poverty


Global GDP per capita - why it needs to grow 
















According to the growth pessimists the party's over. The boom of the late twentieth century was an unsustainable bubble and the current economic slump could well be the last.

But rather than despair, their message is one of hope, for a future of less material wealth but greater human well being. Such growth scepticism isn’t just confined to deep Greens, but is advocated by decision makers such MP Zac Goldsmith who calls for a ‘Constant Economy’ in his book of the same name.

While even hardened sceptics agree that economic growth has delivered immense improvements in the human condition, they claim we have past the point of diminishing returns. For example, improvements in basic human well-being such as literacy and life expectancy begin to saturate at a modest GDP per capita of around $10,000, so why ask or more? Dig a bit deeper though and the picture is somewhat different.

For example, Suriname has a GDP per capita of $9,700, close to the saturation point of improved well-being. Life expectancy is 74 years and literacy is 90%, which isn't far from that of the UK with its GDP per capita of $35,000. But while there is full enrolment in primary education, participation in higher education is less than 10%, compared to almost 50% in the UK. 

Herein lies the problem with growth scepticism. Using metrics such as literacy as indicators of human progress demonstrates a poverty of ambition which equates education with literacy, rather than mass participation in higher education. 

So while some measures of well-being do indeed saturate at modest levels of prosperity, many others such as access to high-speed communication networks and rapid transportation do not. It’s perhaps easy to dismiss broadband as an inconsequential luxury, but it is rapidly becoming a 'fourth utility', access to which provides significant benefits in terms of education, economic development and even delivering political change. 

Viewed in this light it can be argued that zero grow advocates are apologists for poverty rather than true progressives. And as for the political elite, it's all too easy to reframe our current problem from one of stalled growth to the opportunities provided by no growth. Indeed some of the most active proponents of zero growth are those with a locked in advantage, such as MP and heir Zac Goldsmith.

But even if renewed economic grow was desirable, a counter argument is that continuous growth is impossible due to the finite resources of the Earth. This argument sees humans as unthinking consumers. In fact humans are of course prolific innovators who have continually improved the utility which can be embedded in material resources. And it is only through innovation that we can decouple human needs from the environment. 

For example, while the developed nations used countless miles of copper wire to build a fixed communication infrastructure, many developing nations are leap-frogging directly to wireless mobile communications, simultaneously increasing bandwidth while reducing costs and material inputs. This is a socially progressive mass democratisation of communication services and an environmentally progressive dematerialisation of economic growth. Really, what’s not to like? 

But if material resources can be used more efficiently through innovation, surely energy resources are finite, as typified by peak oil? Although fossil fuel use will no doubt peak, the colossal energy density of zero carbon nuclear fuels alone endows us with energy which is for practical purposes unlimited. 

Growth sceptics should consider that while the Earth is finite, unthinking biology evolves wonderfully complex structures using energy from the Sun. Similarly, thinking humans can use innovation and clean energy to re-arrange material resources into more complex and productive forms. This has been the extraordinary success of the human enterprise since we re-arranged nature to our liking through agriculture.

For some however a future of energy austerity is to be welcomed as an escape from modernity. Naomi Klein claims that “farming can once again be a substantial source of employment". Well, this is more Year Zero than zero growth. A return to carbohydrate fuelled human labour may appeal to some as a means of powering down our lives. But it ignores the huge benefits of low cost energy and the massive specialisation of labour. Let’s not forget than nurses nurse and teachers teach, only because someone else is providing their Calories, Joules and other material needs.

To be clear, growth does not mean a garage of sports utility vehicles for every man, woman and child on the planet. But it does mean a future of continuous innovation which can liberate us from constraints which enslaved us in the past. The mechanisation of agriculture liberated us from back breaking labour, rapid transportation freed us from the insularity of village life and the surplus of economic production allowed the growth of valued public services.

Arguing for future innovation driven growth driven does not however give tacit support to growth driven by debt fuelled consumption, capital accumulation through the economics of scarcity or massive social inequality. But rather than debate the merits and demerits of Keynes or Hayek on these matters, we would do well to dust off the words of philosopher John Rawls. 

Rawls asks us to choose the level of inequality in a society into which we are to be randomly positioned. Choosing a highly unequal society would yield a small chance of being king, but a much greater chance of being a slave. A society of equals could be equally poor. Rawl’s choice is therefore inequality which is enough to maximise overall shared prosperity. Neither super-rich nor collective poverty.

Ultimately, the zero growth outlook is simply a limit setting view. Arguing that growth should cease at this entirely arbitrary juncture of history displays a degree of apocalyptic angst. Insisting that we need to regress to a simpler way of life displays a degree of contempt for future generations.

We should aspire not to a future of eternal stagnation, but to an upswing of innovation driven growth which can deliver both shared prosperity and the means to de-couple human needs from the environment.

First published The Herald 24 December 2011