The steady growth of growth scepticism

gdp global raceExpressing one’s scepticism about economic growth is still taboo in political circles, but that appears to be changing, slowly. We know that GDP doesn’t make a whole lot of sense as a proxy for progress. We intuitively grasp that infinite growth on a finite planet doesn’t square with itself. It’s only a matter of time, surely, before we begin to think more broadly about what we want out of the economy and how we measure success.

This week I came across a long article dismantling the idea of GDP, complete with ironic cartoons about the pointlessness of infinite growth. It wasn’t in The Ecologist, or Red Pepper. It’s in the Financial Times, and you can read it here.

“At the heart of the GDP debate” says the FT’s David Pilling, “is an anxiety that our societies have been somehow hijacked by pursuit of a single data point. No one seriously imagines that simply making an abstract number bigger and bigger can be a worthy goal in its own right. Yet GDP has become such a powerful proxy for what we do hold dear that we find it hard to see past it. Few economists are blind to its many limitations. Most, nevertheless, give the impression of wishing to maximise it at all costs.”

Indeed.

As it explains the uncertainties and inadequacies of GDP, the article is critical of the attention given to the government’s quarterly growth figures, noting how “we invest them with as much meaning as a priest does his liturgies.” Exactly, and the FT is a leader in that chorus of growth-worship.

So thanks for the article, and can you please bear it in mind when reporting the next set of quarterly GDP figures, and give them the amount of attention they deserve.

 

10 Comments on “The steady growth of growth scepticism”

  1. Stefan Thiesen July 8, 2014 at 1:24 pm #

    It strikes me as if a representative of an obscure conservative catholic sect would finally acknowledge that yes, maybe, the Earth might perhaps orbit the sun after all. Not even the main founder of that particular religion, a certain Mr. Smith, envisioned infinite growth. How old is the “cannot be a worthy goal in its own right” argument? I have been writing since me teen days in the 80s that economic activity cannot and must not be an end in itself – and in the one or the other form such a development has been warned against for thousands of years. The simple formula is: the sole purpose of economic activities is to secure and improve the livelihood of human beings. Yet we have ended up in a world where the purpose of human beings more and more became to assure the functioning and growth of “the economy”, which became a single minded apparatus of which we merely are exchangeable components. That has to stop. It is a suicidal route.

  2. David Oldroyd July 8, 2014 at 1:37 pm #

    Thanks again for yet another remarkable link – to get this from the FT seems more like a quantum leap than steady growth!

  3. Imarunner2012 July 8, 2014 at 2:04 pm #

    Jeremy, I’ve nominated you for the “Very Inspiring Blogger” award on my post for today. My blog is mainly about running and many of my followers are runners. Many of us are also concerned with the environment, sustainability and the impact of our sport on the world. Hopefully some of my readers will sign on with you also.
    Andy

    • Stefan Thiesen July 8, 2014 at 2:11 pm #

      Andy – now what exactly might the environmental impact of running be? I think running pretty much is the most environmentally benign sport there there possibly can be.

      • Imarunner2012 July 8, 2014 at 2:31 pm #

        Well, running shoes are made primarily from petroleum products. Tech shirts are synthetic material, though some companies (Atayne) are making shirts from recucled bottles.
        We drive long distances to go to races. We eat gel packs and then drop the packets on the ground. Races use thousands of cups.
        Running is much more resource hungry than most people believe.
        Running is also becoming big business with VC firms buying up some race management companies that manage popular race series.
        Did I get your name wrong?

  4. m. July 8, 2014 at 3:33 pm #

    The book brought to your attention months earlier: A minor matter, downloadable at: m.openairproperties.com … posted in 2013, containing ‘the numbers game’, ‘theoretical economics’, ‘quality of life’, ‘accounting’ mentioned all of the same issues in the FT article.

    Hopefully the article in the FT does better into promoting the bits and pieces that coagulate in ‘a minor matter’, some and more figure as to the flaws and intentional flaws of theoretical economics and accounting procedures in this particular paper.

    It is wonderful that 9 months later these core issues are drizzling into the public arena somehow regretfully by the same heavy users of the standard staple of botched metrics. It must be somehow apparent that there is hedging against abuse starting to perspire by some ‘innocent’ perpetrators of conventional abuse laundering and ironing, in occurrence the headmasters of the FT.

    On top, what if GDP relies heavily on the concept of nation-states, another hoax of theoretical economics and dinosaur of history, pasted over in the article.

  5. Jeremy Williams July 8, 2014 at 3:47 pm #

    Thanks Andy, I appreciate the cameo among your running-related links. I’ve always thought the biggest environmental impact of sport is the transport to and from it. Enthusiasts fly in for special events, and spectators drive in in their cars. Even if the activity itself is fairly benign on a day to day basis, it’s the big global events that do the damage. I did some thinking about sport and sustainability a few years ago. I should dig it out again.

  6. DevonChap July 8, 2014 at 7:47 pm #

    I do think there is a little bit of an over-emphasis of GDP on both sides. GDP is one indicator of economic progress. It has been shown to have a fairly good correlation to other areas of social development but it isn’t perfect.

    Its main use is in helping direct government economic policy. It isn’t perfect – it has been likened to driving a car with blacked out windows and only a rear view mirror to see where you have been since GDP figures take a few months come out and then they get revised later (such as the double dip recession that wasn’t).

    But while GDP is slow it is far more prompt than all the other metrics that have been proposed in its place. Rather than a few months they take years and they are more imprecise. So you would swap your rear view mirror for the wrong end of a telescope. The final paragraph of the FT opinion piece makes that case for me.

    • Jeremy Williams July 9, 2014 at 10:01 am #

      I agree with the economist they quote at the end who argues for a ‘dashboard’ approach. The attempts to create a single alternative metric have been just as inadequate, though that doesn’t seem to stop people from endlessly trying. That’s where the Wellbeing reports that the government devised have been useful, as they present a range of measures, including economic ones.

      • DevonChap July 10, 2014 at 12:00 am #

        Trouble politically with the dashboard approach is that it is complicated with inevitably somethings going up while others go down. The public and media will still want one metrics they can grasp and GDP is the best single metric so it will stay centre stage

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