Editor’s Note: The following article, introduced by Jeremy Ohmes, is a contribution by an outstanding student from Loyola University, Chicago, whose voice enriches the ongoing conversation that is Minding Nature.
Can we have a successful economy without continuous economic growth? The current goal of economic growth is focused too much on the concept of gross domestic product (GDP) growth. GDP is defective in that it lacks a value system that differentiates the kinds of output it measures. Thus, an increase in jails due to higher crime rates, an increase in weapons due to political tension, and an increase in pollution due to manufacturing all are counted positively toward GDP growth. Since things produced that certainly do not signify positive changes are counted toward GDP growth, the idea that economic growth is beneficial is astoundingly misleading. It is a common belief that economic growth makes our economy successful, but economic success should be the reflection of the state of society. If unfavorable production is increasing in order for the economy to “grow” yet society’s well-being is decreasing, why is this the sort of growth that people desire? How is this considered growth at all? It certainly is not an accurate depiction of the state of society.
People’s choice to consume is to improve and ensure quality of life. The demands of all consumers that must be met first and foremost are basic needs like food, water, shelter, and health. The market’s purpose is intended to meet the needs of the consumers and at the very least abstain from doing anything that goes against the ability to meet these needs. Yet crop yields are diminishing due to mistreatment of land, fresh water is being polluted by industrial and agricultural processes, and health is declining due to exposure to pollutants in our air, water, food, and products. Global warming is even taking away land and shelter, with the increase in sea levels and intense storms wiping out infrastructure and eroding coastal land.
Additionally, consumers in the developed world have the privilege of looking past basic needs. In the game of economic growth, the idea persists that more consumption is going to make consumers happier. This goal of consuming more puts a demand on more production, which is great for industry in a monetary sense. But it also means more extraction of resources and a piling up of waste. There is only so much an individual can consume and hold onto. Furthermore, companies often design products not to last, and it is almost a guarantee that an average American who consumes something will also be wasting that same product or a replacement of that product. What people fail to see and know is that after a certain point in consumption, levels of happiness are not increasing. In fact, Americans’ happiness level has not increased since the 1950s. Yet economic consumption keeps growing. It is not making American consumers happier; it is inhibiting them from meeting their basic needs, especially in the long run. Moreover, health is declining. Consuming more is doing nothing but creating additional problems. It is not to the consumer's benefit, especially since it is actually subjecting consumers to a poorer quality of life.
Although these problems negatively impact humans, consumers aren’t demanding a change because those causing the problem—the affluent global population—are not yet largely impacted. Thus, the citizens of developed countries do not realize the severity of the problem. As previously stated, a business’s efforts are directed toward meeting the needs and demands of consumers in order to generate a profit. If consumers aren’t changing their demands, businesses won’t change either. However, the problems people face on this path of economic growth are inevitable. If the majority wait to be reactive to a crisis rather than proactive to the situation already at hand, the situation will be much more difficult to take on, and many more people will suffer before it improves.
The answer is not for markets to cease to exist but for growth to stop at the peak point where its costs do not outweigh its benefits. Right now, our economy externalizes a lot of costs, such as environmental damage. Ignoring these externalities is why the economy appears able to keep growing—the market does not reflect those costs. However, if you make those externalities visible, the economy is actually moving on a downward slope where the costs significantly outweigh the benefits.
We need to retreat—to figure out how to go back to our peak and stay there. The success of the economy needs to be completely redefined. We can function sustainably, produce sustainably, and consume sustainably if we make putting a higher value on the health of the environment a priority. Instead of extracting resources and wasting them and the products we make from them, recycling and reusing would be the sustainable alternative. Resources need to be kept in the market, instead of allowing them to fall out and be wasted. Products need to be designed to be as durable as possible. Then, when products have come to an end of their life, they then should be repaired or remanufactured into a new product.
Everything in nature has a limit to its growth. We are foolish to make continuous growth the economic goal because it is scientifically impossible. There is no amount of monetary evidence that can be shown to justify what is happening to the health of humans and to the health of the planet. An average human in developed countries is very detached from nature, but that does not change the fact that humans are a part of nature. Humans came from nature; they depend on the environment. The health of the earth ultimately determines the ability of the economy to function. When one goes to turn on water or lights, those things are available because nature is providing them. Society as a whole needs to take on the responsibility of tracing back where all of the things in their lives come from so it can ensure that the vitality of these resources is guaranteed. The economy and society can function sustainably—in fact, they can thrive. By implementing progressive ideas that promote quality, reuse of materials, and minimum individual consumption, the functioning of systems can persist indefinitely.
. “Economics Professor: We’re No Closer to Happiness than We Were in the 1950s,” Business Insider, April 11, 2015, at http://www.businessinsider.com/economics-professor-were-no-closer-to-happiness-2015-4. Excerpted conversation with Lord Richard Layard from Caring Economics: Conversations on Altruism and Compassion, Between Scientists, Economists, and the Dalai Lama, ed. T. Singer and M. Ricard (London: Picador, 2015).