Today, the reigning policy orientation holds that the path to greater well-being is to grow and expand the economy. Productivity, profits, the stock market, and consumption: all must go continually up. This growth imperative trumps all else. It is widely believed that growth is always worth the price that must be paid for it—even when it undermines families, jobs, communities, the environment, and our sense of place and continuity.
The Limits of Growth
But an expanding body of evidence is now telling us to think again. Economic growth may be the world’s secular religion, but for much of the world it is a god that is failing—underperforming for billions of the world’s people and, for those in affluent societies, now creating more problems than it is solving. The never-ending drive to grow the overall U.S. economy hollows out communities and the environment; it fuels a ruthless international search for energy and other resources; it fails at generating jobs; and it rests on a manufactured consumerism that is not meeting the deepest human needs. Americans are substituting growth and consumption for dealing with the real issues—for doing things that would truly make us and the country better off. Psychologists have pointed out, for example, that while economic output per person in the United States has risen sharply in recent decades, there has been no increase in life satisfaction and levels of distrust and depression have increased substantially.
We need to reinvent the economy, not merely restore it. The roots of our environmental and social problems are systemic and thus require transformational change. Sustaining people, communities, and nature must henceforth be seen as the core goals of economic activity, not hoped for byproducts of an economy based on market success, growth for its own sake, and modest regulation. That is the paradigm shift we seek.
For the most part, reformers have worked within this current system of political economy, but what is needed is transformative change in the system itself. The case for immediate action on issues like climate change, job creation, and unemployment extension is compelling, but the big environmental and social challenges we face will not yield to problem-solving incrementalism. Progressives have gone down the path of incremental reform for decades. We have learned that it is not enough.
Growing Jobs and Well-Being, Not the Economy
It is time for America to move to a post-growth society where working life, the natural environment, our communities and families, and the public sector are no longer sacrificed for the sake of mere GDP growth; where the illusory promises of ever-more growth no longer provide an excuse for neglecting to deal generously with our country’s compelling social needs; and where true citizen democracy is no longer held hostage to the growth imperative.
Many of the policies that would help grow the kind of society most of us want to live in would actually slow GDP growth. For example, if productivity gains are taken as shorter worktime, personal incomes and overall economic growth can stabilize while quality of life increases. Juliet Schor points out that workers in Europe put in about 300 fewer hours each year than Americans.
Other policies that would point us in the right direction:
- greater labor protections, job security, and benefits, including generous parental leaves;
- guarantees to part-time workers and combining unemployment insurance with part-time work during recessions;
- restrictions on advertising;
- a new design for the twenty-first-century corporation, one that embraces rechartering, new ownership patterns, and stakeholder primacy rather than shareholder primacy;
- incentives for local and locally-owned production and consumption;
- strong social and environmental provisions in trade agreements;
- rigorous environmental, health and consumer protection, including full incorporation of environmental and social costs in prices—for example through mandated caps or taxes on emissions and extractions;
- greater economic and social equality, with genuinely progressive taxation of the rich (including a progressive consumption tax) and greater income support for the poor;
- heavy spending on neglected public services;
- and initiatives to address population growth at home and abroad.
Taken together, these policies would undoubtedly slow GDP growth, but well-being and quality of life would improve, and that’s what matters.
Of course, it is clear that even in a post-growth America, many things do indeed need to grow: the availability of good jobs; the incomes of the poor and working Americans; access to health care and the efficiency of its delivery; education, research and training; security against the risks of illness, job loss, old age and disability; investment in public infrastructure and in environmental protection; the deployment of climate-friendly and other green technologies; the restoration of ecosystems and local communities; non-military government spending at the expense of military spending; international assistance for sustainable, people-centered development for the half of humanity that lives in poverty.
The Work-Sharing Boom: Exit Ramp to a New Economy?
To cope with the recession, some companies are cutting hours instead of employees. Will the trend have long-term effects?
Jobs and meaningful work top this list because they are so important and unemployment is so devastating. The availability of jobs, the well-being of people, and the health of communities should not be forced to await the day when overall economic growth might deliver them. It is time to shed the view that government mainly provides safety nets and occasional Keynesian stimuli. We must insist that government have an affirmative responsibility to ensure that those seeking decent paying jobs find them. The surest, and also the most cost-effective, way to that end is direct government spending—investments and incentives targeted at creating jobs in areas where there is high social benefit. Creating new jobs in areas of democratically determined priority is certainly better than trying to create jobs by pump priming aggregate economic growth, especially in an era when increases in GDP and productivity often don’t produce jobs.
Beyond policy change, another hopeful path into a sustainable and just future is to seed the landscape with innovative models. One of the most remarkable and yet under-noticed things going on in the United States today is the proliferation of innovative models of “local living” economies, sustainable communities and transition towns, and for-benefit businesses which prioritize community and environment over profit and growth. The community-owned Evergreen Cooperative in Cleveland is a wonderful case in point. As Gar Alperovitz and his colleagues have pointed out, state and federal programs can be crafted to support community development and finance corporations, local banks, community land trusts, employee and consumer ownership, local currencies and time dollars, municipal enterprise, and non-profits in business.
We Won’t Miss Growth
Running parallel to these changes in policy must be a change in national values. In particular, it’s time to move beyond our runaway consumerism. There are mounting environmental and social costs of American affluence, extravagance, and wastefulness. Even our larger homes and lots are too small to contain all the stuff we are accumulating. The self-storage industry didn’t exist until the early 1970s, but it has grown so rapidly that its floor space would now cover an area the size of Manhattan and San Francisco combined. We have a disease, affluenza, from which we need a speedy recovery.
The good news is that more and more people sense at some level that there’s a great misdirection of life’s energy. We know we’re slighting the things that truly make life worthwhile. One survey found that 81 percent of Americans think the country is too focused on shopping and spending; 88 percent say American society is too materialistic.
Psychological studies show that materialism is toxic to happiness, that more income and more possessions don’t lead to lasting gains in our sense of well-being or satisfaction with our lives. What does make us happy are warm personal relationships, and giving rather than getting.
Building the strength needed for change requires, first of all, a political fusion among progressives, and that fusion should start with a unified agenda. Such an agenda would embrace a profound commitment to social justice and environmental protection, a sustained challenge to consumerism and commercialism and the lifestyles they offer, a healthy skepticism of growthmania, a democratic redefinition of what society should be striving to grow, a challenge to corporate dominance and a redefinition of the corporation and its goals, and a commitment to an array of pro-democracy reforms in campaign finance, elections, the regulation of lobbying, and much more. A common agenda would also include an ambitious set of new national indicators beyond GDP to inform us of the true quality of life in America. We tend to get what we measure, so we should measure what we want.
If some of the ideas just presented seem politically impracticable today, just wait until tomorrow. Soon it will be clear to more and more people that it’s business as usual that’s the utopian fantasy, while creating something very new and different is the practical, pragmatic way forward.
I doubt that we’ll miss our growth fetish after we say good-bye to it.
James Gustave Speth adapted this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical solutions for a just and sustainable world, from a speech he gave to the E.F. Schumacher Society. Gus is an environmental lawyer, advocate, and author, most recently of The Bridge at the Edge of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability.