Economics-Our Dangerous Dependence on GDP
Growth
Growth
Economics-Our Dangerous Dependence on GDP Growth
Steady growth in the production and consumption of goods and services
is essential for the welfare of the citizenry in capitalist economics. Full
employment requires that the demand for and consumption of both
goods and services steadily increase.
When new technology results in the ability to produce goods or services
with less labor, new or increased demands must be created in order to
maintain full employment.Our economic system favors all types of
increased consumption, both that which is good for our welfare and that
which in the long run is clearly going to be bad for our welfare.
For an example of this we might take a critical view of the automotive
industry. Technological advances have made it possible to substantially
improve miles per gallon of cars and trucks. But for the manufacturers to
maintain profitability they have promoted fancier cars with more
gadgets. Average fuel efficiency has not improved since 1985 so with
more cars and more miles per year,the auto industry is a major
contributor to global warming.So in a longer view, we need to recognize
that it is impossible to have never-ending material growth. Growth
continued for an infinite period of time on a planet with a definite amount
of natural resources is an obvious impossibility. Growth was desirable, or
at least could be accommodated, in most nations throughout history
when the ratio of humans to land and natural resources was much
smaller. And at times wars and plagues reduced the number of humans
and at times new lands and new sources of raw materials were found.
But in this century we are living on a planet that is already getting
overcrowded.For the sake of future generations we should drastically
reduce our use of fossil fuels. But the Bush administration has refused to
participate in the Kyoto plan because it fears that this reduction in our
use of energy would seriously damage our economy Modern technology
is enabling us to use energy and materials more efficiently and make
savings of materials by recycling. But this progress is overbalanced by
our increasingly consumptive life style. We have the technology to
double the efficiency of our power plants, to obtain much more energy
from renewable sources. and to double or triple the miles per gallon of
our cars, yet in the 1990s our use of fossil fuels increased by 13%.In the
last century there were predictions that our technological progress would
lead to much shorter work weeks. It did not happen because as
consumers our desires for acquiring more goods and services
overbalanced our desire for more leisure. And capitalist advertising
promoted these insatiable desires.Why is in not possible to have an
economic system which will not collapse if we simply stayed at the same
level of material growth? Our economists have offered no solution to this
question. Instead they say our prosperity must have continual
introduction of new products and new models of present ones. All of
which need the use of the energy obtained mostly from the fossil fuels
that emit the carbon dioxide that risks our future. Leading ecologists
have introduced the term sustainable growth for their proposed
economy. This would use renewable resources for energy, replace mining
of ores with total recycling of metals, put our best technology to work to
improve use of energy and materials. But only when there is an
opportunity for increased profits will business interests move in this
direction. So progress would require government intervention and our
business world with the power of its money blocks government action.
Notes
1. “Growth for the sake of growth is the ecology of the cancer cell; it
destroys its hosts.” STATE OF THE WORLD 2002
2. Growth is less productive of human happiness than used to be the
case when marginal income was dedicated mainly to the satisfaction of
absolute human needs, rather than to relative wants. Herman Daly in
STEADY STATE ECONOMICS
3. Until quite recently we operated on the assumption there would
always be new frontiers to conquer, new unspoiled areas to find. The
errors of this kind of thinking becomes quite obvious as we approach the
limits of ecological systems. The Stanley Foundations in
ENVIRONMENTAL PROBLEMS
4. The problem if that the challenge to survival still lies so far in the
future and the inertia of the present order is so great that no voluntary
or planned reorganization to move to a steady state society is remotely
possible – no capitalist nation would put a ceiling on industrial output.
Robert Heilbroner in “Reducing or Redirecting Consumption” article
Steady growth in the production and consumption of goods and services
is essential for the welfare of the citizenry in capitalist economics. Full
employment requires that the demand for and consumption of both
goods and services steadily increase.
When new technology results in the ability to produce goods or services
with less labor, new or increased demands must be created in order to
maintain full employment.Our economic system favors all types of
increased consumption, both that which is good for our welfare and that
which in the long run is clearly going to be bad for our welfare.
For an example of this we might take a critical view of the automotive
industry. Technological advances have made it possible to substantially
improve miles per gallon of cars and trucks. But for the manufacturers to
maintain profitability they have promoted fancier cars with more
gadgets. Average fuel efficiency has not improved since 1985 so with
more cars and more miles per year,the auto industry is a major
contributor to global warming.So in a longer view, we need to recognize
that it is impossible to have never-ending material growth. Growth
continued for an infinite period of time on a planet with a definite amount
of natural resources is an obvious impossibility. Growth was desirable, or
at least could be accommodated, in most nations throughout history
when the ratio of humans to land and natural resources was much
smaller. And at times wars and plagues reduced the number of humans
and at times new lands and new sources of raw materials were found.
But in this century we are living on a planet that is already getting
overcrowded.For the sake of future generations we should drastically
reduce our use of fossil fuels. But the Bush administration has refused to
participate in the Kyoto plan because it fears that this reduction in our
use of energy would seriously damage our economy Modern technology
is enabling us to use energy and materials more efficiently and make
savings of materials by recycling. But this progress is overbalanced by
our increasingly consumptive life style. We have the technology to
double the efficiency of our power plants, to obtain much more energy
from renewable sources. and to double or triple the miles per gallon of
our cars, yet in the 1990s our use of fossil fuels increased by 13%.In the
last century there were predictions that our technological progress would
lead to much shorter work weeks. It did not happen because as
consumers our desires for acquiring more goods and services
overbalanced our desire for more leisure. And capitalist advertising
promoted these insatiable desires.Why is in not possible to have an
economic system which will not collapse if we simply stayed at the same
level of material growth? Our economists have offered no solution to this
question. Instead they say our prosperity must have continual
introduction of new products and new models of present ones. All of
which need the use of the energy obtained mostly from the fossil fuels
that emit the carbon dioxide that risks our future. Leading ecologists
have introduced the term sustainable growth for their proposed
economy. This would use renewable resources for energy, replace mining
of ores with total recycling of metals, put our best technology to work to
improve use of energy and materials. But only when there is an
opportunity for increased profits will business interests move in this
direction. So progress would require government intervention and our
business world with the power of its money blocks government action.
Notes
1. “Growth for the sake of growth is the ecology of the cancer cell; it
destroys its hosts.” STATE OF THE WORLD 2002
2. Growth is less productive of human happiness than used to be the
case when marginal income was dedicated mainly to the satisfaction of
absolute human needs, rather than to relative wants. Herman Daly in
STEADY STATE ECONOMICS
3. Until quite recently we operated on the assumption there would
always be new frontiers to conquer, new unspoiled areas to find. The
errors of this kind of thinking becomes quite obvious as we approach the
limits of ecological systems. The Stanley Foundations in
ENVIRONMENTAL PROBLEMS
4. The problem if that the challenge to survival still lies so far in the
future and the inertia of the present order is so great that no voluntary
or planned reorganization to move to a steady state society is remotely
possible – no capitalist nation would put a ceiling on industrial output.
Robert Heilbroner in “Reducing or Redirecting Consumption” article