Last week the latest round of GDP estimates were released by the Office of National Statistics. They show that the economy returned to growth in the last quarter, thereby ending the double-dip recession.
This was broadly expected and I wasn’t going to write about it, except that I’ve had a couple of comments that I feel I ought to respond to. The gist of them is that as someone who is sceptical about economic growth, I probably quite like recessions and am secretly disappointed that the economy is on the up again. This is a misunderstanding, and a pretty common one. Most of the knee-jerk dismissal of postgrowth economics boils down to this problem. So let me just iron a couple of things out.
Firstly, we have to steward the economy that we have. To be against growth on principle is self-defeating if you have a growth economy. It’s like wanting to plug your petrol powered car into the mains. It doesn’t matter how much you’d prefer an electric car, you’re not going to go anywhere like that.
Because of the way our current economy is constructed, there are serious consequences when growth stalls. People lose their jobs and their homes, services are cut, and politics can get nasty. Recessions can wreck lives and we want to avoid them. When they happen, we want to recover as fast as we can. Unfortunately, a growth economy will always suffer from booms and busts – that’s actually one of the most compelling reasons for creating a more stable economy.
Which brings me to the most important point: a postgrowth economy isn’t just an economy that isn’t growing – it’s an economy that doesn’t require growth. You can’t create a sustainable economy by switching growth off and hoping for the best. It has to be designed, including new forms of finance and new institutions to manage them, action on inequality and debt, new tax systems and much more besides. It’s a proactive, strategic, and long term project. A sustainable economy will take decades to evolve, and will involve every sector of society.
None of this comes free either. Things like renewable energy or a sustainable transport network will take considerable investment. That’s never going to happen if step one is to break the economy as its currently configured.
So no, there’s nothing to celebrate in recession. I may disagree with the overall goal of the economy, but a collapsing economy is worse. The only downside to the recovery might be a sense of complacency that our current economic configuration is working after all, and we’ll have missed the opportunity to fix it. But I suspect that the opportunity has already come and gone.
UPDATE – Here’s postgrowth economist Serge Latouche, who says something similar:
“We know that simply contracting the economy plunges our societies into disarray, increases the rate of unemployment and hastens the demise of the health, social, educational, cultural and environmental projects that provide us with an indispensable minimum quality of life… Just as there is nothing worse than a work-based society in which there is no work, there is nothing worse than a growth-based society in which growth does not materialize. And that social and civilizational regression is precisely what is in store for us if we do not change direction. For all these reasons, de-growth is conceivable only in a de-growth society, or in other words within the framework of a system that is based upon a different logic.”