We need to stop talking about growing the economy

Why do politicians sell their plans to grow the economy as if that is the solution to all our problems?

Yes, rich countries are generally happier than poor ones, and rich people are generally happier than poor people. But money only buys happiness up to a point.

Angus Deaton and Daniel Kahneman’s respected analysis of the Gallup-Healthways poll data tells us that beyond a certain level of household income, around US$75,000, earning more does not improve people’s day-to-day happiness – called experienced wellbeing – at all.

And, with the exception of very poor nations, it’s far from clear that as per capita GDP grows, collective happiness grows with it.

In the popular 2011 book What’s the Economy For, Anyway?economists John de Graaf and David K. Batker make the case that unlimited economic growth is no longer a good economic goal. It’s not a recipe for happiness, and can actually cause harm.

GDP counts as positive a lot of things that make our lives worse, because it costs money to clean up after them. Disasters and events such as wars, car crashes, oil spills, crime, ill health and relationship breakdowns all help grow the economy.

And the political obsession with growing the economy has stoked a harmful culture of consumerism that is bad for us and the planet.

In a compelling conversation at the 2018 Sydney Writers Festival, Richard Denniss, Chief Economist at The Australia Institute, argued that we need to stop talking about growing the economy, and instead start talking about which bits of the economy we want to grow.

The shape of the economy matters far more to our collective wellbeing than its size.

As a society, we can choose to invest in renewable energy, health and education, public transport and green spaces. Or build coal fired power stations, re-vamped sports stadiums and road links for mining companies.

Both sorts of spending will grow the economy, but with very different impacts.

As individuals, retail spending boosts the economy at Christmas, but, argues Denniss, this kind of economic growth isn’t good.

He draws a useful distinction between consumerism and materialism:

Consumerism is the love of buying things, the act of purchase, the thrill of handing your credit card to someone and getting a present back.

Materialism is the love of the object itself, the thing.

We’ve actually got to learn to love our things; to love stuff, to repair it, to cherish it, to maintain it, to find it a new home when you don’t need it anymore.

I’d argue we need to be a far more materialistic society, which for me is the exact opposite of being a consumer society. Because in consumer society, the idea is that the faster we import stuff and don’t use it and then throw it away and then bury it, the richer we become.

Our national story is that the economy is strong at Christmas time when we’re importing enormous amounts of stuff that nobody wants and then throwing it out.

Changing this story means collectively adopting a different set beliefs about what it means to have a high standard of living that doesn’t involve wasteful patterns of consumption.

Buying fewer presents at Christmas, less bottled water and using re-fillable coffee cups won’t weaken the economy. But it will re-shape it so that we have less of the parts we no longer want and can spend more on parts we do.

Fifty years ago, United States Senator Robert Kennedy tried to persuade people that our narrow obsession with growing the economy is no longer good for us.

I’ll leave you with his words, from a speech given early in his 1968 presidential campaign, just weeks before he was assassinated:

For too long, we have surrendered personal excellence and community values in the mere accumulation of material things.  Our Gross National Product, now, is over $800 billion dollars a year. But that Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them.  It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl.  It counts napalm and nuclear warheads and armored cars for the police to fight the riots in our cities.  It counts Whitman’s rifle and Speck’s knife, and the television programs which glorify violence in order to sell toys to our children.

Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play.  It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials.

It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country.

It measures everything in short, except that which makes life worthwhile.

* This isn’t a sponsored post, but if you buy a book using the link provided, I’ll get a small commission.


Author: Rachel Linton

Psychologist, reader, writer from Sydney, Australia. On this blog I write about ideas from leading thinkers in a relatable way for our time. Enjoy xx

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