It’s time to move beyond growth for growth’s sake

Martin Kirk writes: Economic growth sits at the root of all plans to tackle poverty. The two concepts – growth and poverty reduction – are treated as practically interchangeable. Nowhere is this more apparent than in the new UN Sustainable Development Goals (SDGs), which promise to eradicate poverty ‘in all its forms everywhere’ by 2030. The entire formula for success rests on economic growth; at least 7 per cent per annum in the least developed countries, and higher levels of economic productivity across the board. Goal 8 is entirely dedicated to this objective.

This feels intuitive and logical. If economic growth equals more money, and poverty equals a lack of money, then economic growth equals less poverty. And this is, of course, the prevailing logic for all human development. The idea that if you’re not growing you must be dying is writ large. Every country, every company, every individual must grow their material wealth over time; both the whole and every one of its parts must be on a constant growth curve. Taken together, we might see this as a form of totalitarianism – the totalitarian imperative of growth.

There are two problems with economic growth as a measure of wellbeing. First, the correlation between economic growth and poverty reduction is weak. It’s a reminder that intuition and ‘common sense’ do not always correspond to evidence. Globally, the trends are clear. Since 1990, global gross domestic product (GDP) has increased 271 per cent, and yet both the number of people living on less than $5 a day, and the number of people going hungry (using the Food and Agriculture Organization of the UN’s definition of available calories for the mid‑point between normal and intense activity levels) have also increased, by 10 per cent and 9 per cent respectively. Add to that the wage stagnation across the developed world, and increasing inequality both within and between countries pretty much everywhere, and the shakiness of this basic logic becomes evident. Aggregate economic growth does not translate into less poverty, which is the stated objective of the SDGs.

This is not to suggest that a larger economic pie doesn’t benefit many people; it does. But that is simply not the same as saying that it reduces poverty. We live in a world where 95 per cent of all income from growth goes to the richest 40 per cent, and the concept of trickle-down neoliberal economics has been shown, in the words of Alex Andreou in The Guardian last year, to be ‘the greatest broken promise of our lifetimes’. [Continue reading…]

Print Friendly, PDF & Email
Facebooktwitterrss
Facebooktwittermail