An economist's vision of economic growth -- with less destruction
Sep 6, 2024
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Daniel Susskind, an economist focused on sustainable growth, dives into the limitations of GDP as a measure of success. He argues that while economic growth has improved living standards, it has also harmed the environment and increased inequality. Susskind suggests that we should pursue less destructive forms of growth, balancing prosperity with ecological health. He critiques traditional metrics and emphasizes the importance of alternative measures that reflect social well-being and environmental sustainability. Can growth thrive without destruction? He explores this pressing question.
The pursuit of GDP growth has historically improved living standards and job creation, yet has led to significant environmental degradation and inequality.
A shift towards less destructive growth is proposed to balance economic progress with the crucial need for sustainability and community welfare.
Deep dives
The Current State of the Economy
The discussion highlights the continued growth of the U.S. economy, with recent figures indicating a GDP increase of 3.7% in the second quarter. This performance raises optimism about the potential for even higher growth rates, which many believe are necessary for overall societal well-being. Growth is often viewed as crucial for improving living standards, job creation, and health outcomes within the population. However, this relentless focus on GDP growth also underscores the need for a growth-oriented fiscal policy to avoid polarization and dysfunction within society.
The Historical Context of Economic Growth
The history of economic growth is relatively short, comprising a mere blink in the timeline of human existence. For approximately 300,000 years, economic life was stagnant for most people, with significant growth only starting about 250 years ago during the Industrial Revolution. This sustained economic ascent has fundamentally changed societal structures and expectations, leading to modern-day policies where GDP acts as the principal metric for evaluating a nation’s prosperity. The recent obsession with GDP has only intensified since the 1950s, shaping political and economic discourse across the globe.
The Evolution and Measurement of GDP
The concept of GDP emerged during wartime as governments sought ways to measure economic output efficiently, with Simon Kuznets and John Maynard Keynes playing pivotal roles in its development. Initially, Kuznets was resistant to including military spending in economic evaluations, arguing for a more socially responsible approach. In contrast, Keynes believed that military expenditures should be counted, influencing the prevailing view of GDP as a comprehensive measure of national wealth. This ongoing debate reflects a broader moral conversation about what economic indicators should represent, as these metrics have profound implications for public policy and societal values.
The Dangers of Obsessive Growth
Despite the link between economic growth and improved quality of life, the pursuit of relentless GDP expansion poses significant risks, including environmental degradation and rising inequality. Critics argue that the current measurement of GDP fails to capture essential aspects of societal well-being, neglecting values like community welfare and environmental health. This tension has sparked movements advocating for degrowth, suggesting that a focus on quality of life and sustainability is more crucial than endless growth. Advocates for reform argue for a broader discussion on what constitutes national success, emphasizing citizen engagement in redefining measures that promote a healthier society and ecosystem.
The world’s focus on growth - also known as GDP - has led to higher living standards, longer life and more jobs. But it has also destroyed the climate and created mass inequality.
Economist Daniel Susskind argues that what we need isn’t less growth, but less destructive growth. Is that possible?
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