Experts debate the concept of economic growth, questioning its sustainability on a finite planet. They discuss alternative metrics like Doughnut Economics, advocating for well-being over traditional growth models. The podcast explores the need for global cooperation in achieving green growth and reducing environmental impact.
GDP fails to capture distribution of income and environmental impact, questioning benefits of growth.
Rethinking the emphasis on GDP growth for societal well-being, equality, and sustainability objectives.
Donut Economics advocates for regenerative and distributive models to prioritize well-being, equality, and sustainability.
Deep dives
Understanding the Value of GDP and Economic Growth
Gross Domestic Product (GDP) measures the monetary value of goods and services produced in an economy, encompassing consumer spending, investments, government expenditure, and exports. Economic growth is gauged by the increase in the monetary value of goods and services sold annually. However, GDP fails to reflect critical aspects like the distribution of income, the value of natural assets, and the impact on the ecosystem, raising questions about the true benefits of growth on a finite planet.
Challenging the Singular Focus on GDP Growth
The traditional emphasis on GDP growth as a metric for economic success is being scrutinized. While historical perceptions linked growth with progress and prosperity, the correlation between GDP rise and overall well-being is now questioned. The limitations of this growth-centric approach are highlighted, prompting discussions on alternative objectives centered around enhancing societal well-being, reducing inequalities, and ensuring environmental sustainability.
Debating the Feasibility of Green Growth
The concept of green growth advocates for enhancing economic output while diminishing environmental impact through sustainable and efficient practices. While some argue for the technical feasibility and benefits of green growth, skeptics, rooted in empirical analysis, question the extent to which growth can truly align with achieving sustainability across various environmental aspects. The discourse delves into the complexities of balancing economic progress with ecological preservation.
Transitioning to Donut Economics for Thriving Communities
Donut Economics presents a holistic framework that challenges the outdated growth paradigm by prioritizing regenerative and distributive economic models. By emphasizing thriving communities, equitable wealth distribution, and ecological renewal, Donut Economics resonates with policymakers and local governments worldwide. The shift towards this transformative approach aims to create resilient societies that focus on well-being, equality, and sustainability.
Seeking Policy Shifts to Prioritize Social and Environmental Well-Being
Proposed policy shifts, akin to the Climate Change Act, aim to embed sustainability targets across environmental and social indicators, surpassing the centrality of GDP growth. By mandating declining targets for environmental impact and societal well-being, policies can guide governments towards achieving resilience, reducing inequalities, and ensuring environmental stewardship. These pragmatic approaches herald a necessary transition towards prioritizing comprehensive societal welfare over singular economic growth metrics.
Britain’s favourite broadcaster David Attenborough once said: “Anyone who thinks you can have infinite growth in a finite environment is either a madman - or an economist.”
But our political leaders don’t seem to agree. Both our major political parties have made growing the economy a key metric for their success in government.
So what is economic growth? How did it become so central to our understanding of the economy? And should we really be striving for infinite growth on a finite planet?
Ayeisha Thomas Smith is joined by Kate Raworth, economist and author of Doughnut Economics, and Michael Jacobs, professor of political economy at the University of Sheffield.
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Music: Under Suspicion by Lee Rosevere, Free Music Archive: https://freemusicarchive.org/music/lee-rosevere/music-for-podcasts-serious/under-suspicion/, used under Creative Commons licence: creativecommons.org/licenses/by-nc/4.0/.
Produced by Katrina Gaffney, Margaret Welsh and James Rush
The New Economics Podcast is brought to you by the New Economics Foundation. Find out more about becoming a NEF supporter at: neweconomics.org/donate/build-a-better-future
New Economics Foundation is a registered charity in England and Wales. Charity No. 1055254
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