Later On

A blog written for those whose interests more or less match mine.

Our Obsession With Growth Must End

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In the NY Times David Marchese interviews the economist Herman Daly on why never-ending growth is absurd and a harmful idea (gift link, no paywall):

Growth is the be-all and end-all of mainstream economic and political thinking. Without a continually rising G.D.P., we’re told, we risk social instability, declining standards of living and pretty much any hope of progress. But what about the counterintuitive possibility that our current pursuit of growth, rabid as it is and causing such great ecological harm, might be incurring more costs than gains? That possibility — that prioritizing growth is ultimately a losing game — is one that the lauded economist Herman Daly has been exploring for more than 50 years. In so doing, he has developed arguments in favor of a steady-state economy, one that forgoes the insatiable and environmentally destructive hunger for growth, recognizes the physical limitations of our planet and instead seeks a sustainable economic and ecological equilibrium. “Growth is an idol of our present system,” says Daly, emeritus professor at the University of Maryland School of Public Policy, a former senior economist for the World Bank and, along with the likes of Greta Thunberg and Edward Snowden, a recipient of the prestigious Right Livelihood Award (often called the “alternative Nobel”). “Every politician is in favor of growth,” Daly, who is 84, continues, “and no one speaks against growth or in favor of steady state or leveling off. But I think it’s an elementary question to ask: Does growth ever become uneconomic?”

There’s an obvious logic to your fundamental argument in favor of a steady-state economy,1

1 One in which the population and the stock of capital no longer grow but, as John Stuart Mill has put it, “the art of living would continue to improve.”

 which is that the economy, like everything else on the planet, is subject to physical limitations and the laws of thermodynamics and as such can’t be expected to grow forever. What’s less obvious is how our society would function in a world where the economic pie stops growing. I’ve seen people like Peter Thiel, for example, say that without growth we would ultimately descend into violence.2

2 Speaking on the Portal podcast in 2019, the billionaire tech investor and libertarian-leaning conservative power broker said, “But I think a world without growth is either going to be a much more violent or a much more deformed world. . . . Without growth, I think it’s very hard to see how you have a good future.”

 To me that suggests a fairly limited and grim view of human possibility. Is your view of human nature and our willingness to peacefully share the pie just more hopeful than his? First, I’m not against growth of wealth. I think it’s better to be richer than to be poorer. The question is, Does growth, as currently practiced and measured, really increase wealth? Is it making us richer in any aggregate sense, or might it be increasing costs faster than benefits and making us poorer? Mainstream economists don’t have any answer to that. The reason they don’t have any answer to that is that they don’t measure costs. They only measure benefits. That’s what G.D.P. is.3

3 More specifically, it’s the monetary value of the final goods and services produced by a nation.

 There’s nothing subtracted from G.D.P. But the libertarian notion is logical. If you’re going to be a libertarian, then you can’t accept limits to growth. But limits to growth are there. I recall that Kenneth Boulding4

4 An economist, longtime professor at the University of Colorado and former president of the American Economic Association. He died in 1993 at age 83.

 said there are two kinds of ethics. There’s a heroic ethic and then there’s an economic ethic. The economic ethic says: Wait a minute, there’s benefits and costs. Let’s weigh the two. We don’t want to charge right over the cliff. Let’s look at the margin. Are we getting better off or worse? The heroic ethic says: Hang the cost! Full speed ahead! Death or victory right now! Forward into growth! I guess that shows a faith that if we create too many problems in the present, the future will learn how to deal with it.

Do you have that faith? [Laughs.] No, I don’t.

Historically we think that economic growth leads to higher standards of living, lower death rates and so on. So don’t we have a moral obligation to pursue it?  . . .

Continue reading. (gift link, no paywall)

Written by Leisureguy

22 July 2022 at 3:42 pm

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