Punditocracy Discovers Zero Growth

I read a book a couple of years back called The Post_American Century by Fouad Zakaria. I searched in vain for any indication of the slightest awareness of climate and sustainability issues, and the need for a post-growth economics. Not a peep.

So it’s with some surprise that I read (h/t Luigi) Zakaria’s efforts to investigate post-growth economics here in an interview with Zachary Karabell and Umair Haque.

ZACHARY KARABELL, AUTHOR, “THE LEADING INDICATORS”: And the thing about U.S. growth is, I think, there’s been an uncoupling between what those numbers tell you and what the actual effects are systemically. So, to think about a factory that opens in 1970, it employs 5,000 people, it puts out a certain number of cars or a certain number of stuff and it adds to GDP growth. Today yes, there may be a slight manufacturing revival in the United States. But that same factory is going to have 500 people and it may add more to output, but it will add less to jobs. So, we’ve created this number that optically we think is a proxy for everything and increasingly it’s a proxy for only one particular thing, which is output as defined as stuff that we have produced.

UMAIR HAQUE, AUTHOR, “BETTERMENT: ECONOMICS FOR HUMANS”: Yeah. I think that, you know, GDP does have some value to it. But I also think that it may have – it may be at the point where it’s outliving its usefulness. Because as Zachary points it out, GDP just measures the volume of stuff. It doesn’t look at the quality of our lives, which is presumably what we want from any – to benefit us in real terms, not just to deliver us more stuff. And the real question for us is what do we want out of an economy and how do we begin measuring it? Because when we talk about growth, I think that many people often think that growth is a God-given thing and it refers to some kind of natural phenomena in the world. But it doesn’t. Growth is a manmade creation.

ZAKARIA: Exactly.

Still nothing about actual limits, but it’s refreshing to see the class of people who are considered “serious” in DC at least reconsidering growth as the metric of success.

I see hints of the questions:

What, in fact, is the thing that is growing?

Do we really want it to grow forever?

But I don’t see them asking if it’s even possible.

Comments:

  1. Apols, may be repeating myself, but this from Jorg Friedrichs' The Future is Not What it Used to Be short-circuited the problem a bit for me by asking, rather than "what is the thing that's growing?", instead, "if we assume that the thing that's growing entails x% of physical stuff, what does that imply?" The answers are pretty stark - for me, particularly the second paragraph properly stomped on any remaining notions I had about `decoupling'.

    For the sake of the argument, assume that world economic output continues to grow by 3 percent per annum. This implies that global GDP will double within twenty-three years, and quadruple within forty-six years. It also implies that, a century from now and other things being equal resources consumed and pollutants emitted will have increased by a factor of more than sixteen. It is easy to see that such enormous growth would not be sustainable. The obvious objection is that resources consumed and pollutants emitted can be reduced by efficiency gains and other forms of technological progress. So let us assume, again for the sake of the argument, that resource intensity and thus pollution can be reduced by a fairly ambitious 50 percent. Even so, under the above scenario, a century from now the world economy would consume eight times as many resources and emit eight times as many pollutants as today.

    To continue the thought experiment, let us demand that the world economy should grow for a century by 3 percent per annum, but without any increase of resource consumption and pollutant emissions. By how much would it be necessary to abate the resource and emission intensity of the world economy (resources consumed and pollutants emitted per unit of GDP)? The answer: by a staggering 94.8 percent. To reconcile a century of 3 percent growth with the more ambitious goal of reducing resource consumption and pollutant emissions, the abatement of resource and emissions intensity would have to be even more drastic.

  2. That's a fun article but I'm confused how the economist could have concluded economic growth was possible with steady GDP. Economic growth == growth in real GDP, they're synonymous. Can't help but think the writer didn't remember that correctly. I'm also puzzled by things like "if energy became arbitrarily cheap, someone could buy all of it": huh? It's a remembered conversation with caveats, but I'm a bit skeptical of the recall. Still, interesting - hadn't heard the thing about reaching boiling point before...


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