Today we live in an era of information, statistics, metrics, and measures. In nearly all aspects of life things are quantified by data—sometimes, it seems, to the point that the metric becomes confused with the thing being measured.
The Dominance of the GDP
In economics this preoccupation with data manifests itself in the close scrutiny of the Gross Domestic Product. Is the GDP growing? Is it growing fast enough? What can we do to increase its growth?
It’s an obsession—and an unhealthy one, if we’re concerned with the health of our planet, our nations, and even ourselves.
The GDP is, by its construction, a poor measurement of anything other than the aggregate scale of the economic activity—and only economic activity—within the market. Household work, work for trade and barter, illicit economic activity—all of which are significant in scale—don’t figure into the GDP. The GDP also makes no value judgments on its components. Even if, for example, new construction of homes takes place because a massive hurricane destroyed old ones, or you have to buy a new car because your old one was stolen, it all is counted as part of the GDP.
There are alternative and generally more holistic measures of economic activity and the health of a nation. Some of these have been around for decades, but none have the same status among business leaders, politicians, and policymakers as the GDP.
As a result, increasing GDP, or increasing economic growth, is almost universally treated as the most important goal of economic policy. Even among most otherwise environmentally aware politicians and policymakers, the goodness of perpetual economic growth is an unstated underlying assumption. It may be packaged as so-called green growth, that is economic growth accompanied by less destruction of nature, but it is still called growth.
If we lived on a planet with infinite resources, unlimited growth wouldn’t be a bad thing. But we live on planet and at a time when resource usage, population growth, and economics are colliding. We are all using resources in unsustainable ways. Some is systemic and some is personal choice, but the fact is we're drawing down nature’s capital.
We are at the point where, as renowned ecological economist Herman Daly puts it, more economic activity isn’t creating wealth, but rather illth—a term that dates back to the Victorian era art critic and thinker John Ruskin.
Daly says the robustness of the economy, “Should be counted in net terms—that is to say we should consider not only the accumulated stock of wealth but also that of “illth;” and not only the annual flow of goods but also that of 'bads.' Bads and illth consist of things like nuclear wastes, the dead zone in the Gulf of Mexico, biodiversity loss, climate change from excess carbon in the atmosphere, depleted mines, eroded topsoil, dry wells, exhausting and dangerous labor, congestion, etc.”
The reason more economic growth is simply increasing illth is a question of scale. The scale of economic activity is bumping up against the walls of the ecosphere. Efficiency and waste reduction can be improved, considerably in some areas, but that doesn’t change the underlying fact that our lives are dependent on the natural resources of the planet. This necessarily creates limits to growth.
A Steady-State Economy Is Another Option
How do we reverse such entrenched thinking?
First, we can acknowledge and integrate into our economic thinking and policy the fact that economic activity is a subset of ecological activity.
Second, we can consider economic frameworks that move beyond accepting that growth is always good, like the steady-state economy.
Daly defines a steady-state economy as, “An economy with constant stocks of people and artifacts, maintained at some desired, sufficient level by low rates of maintenance ‘throughput,’ that is, by the lowest feasible flows of matter and energy from the first stage of production to the last stage of consumption.”
The Center for the Advancement of the Steady State Economy, a Virginia-based think tank, writes, “Sustainable scale is the key characteristic of a steady state economy. Sustainability is achieved when the human economy fits within the capacity provided by Earth’s ecosystems. This is why getting the scale of the economy right (technically the point at which the marginal costs of growth equal the marginal benefits) is the highest priority for a steady state economy.”
How do we achieve this balance? That is the hard question, one that requires values judgments across a wide range of human activity, including judgments about equitable distribution and access to resources, and what gets produced by whom and for whom, accurately measuring the true costs of products, (including environmental damage), and regulation. The answers to these questions will be different from place to place and will change over time.
Ultimately, what is required is the personal and political will to change, to transform our relationship with the world from one of exclusion and separation, where humans are separate from other life, to one of inclusion and unity, where we live within the boundaries set by nature.
© 2015 Omega Institute for Holistic Studies