Why We Can’t Grow Our Economy Forever

Laura Shin
Posted

4. Change the way we measure progress.

GDP is seen as an indicator of economic progress, but it measures the amount of money that changes hands, not progress, because it goes up when we pay for negative things like medical procedures or imprisoning criminals. Yet it doesn’t account for all positive things. For example, the work of stay-at-home parents doesn’t get counted in GDP—even though it helps society.

The Genuine Progress Indicator, or GPI, is used in states like Maryland, Vermont and Utah. GPI corrects traditional GDP by subtracting out defensive expenditures (e.g. money spent on crime and illness) and adding in estimates for things like household or volunteer work. Over recent years, although GDP has risen, GPI has flatlined. It’s a business school cliché to say we manage what we measure, but changing to GPI could spark other changes.

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Next Steps

Some people say a steady-state economy isn’t necessary because technology will allow us to keep growing despite our finite resources. Technology can give us breathing room but isn’t a solution. In the 1960s, food production was struggling to keep pace with the growing population. We averted the crisis through advances in high-yield, disease-resistant wheat. But we continued growing, and now we face problems again.

Some of these technological solutions are causing their own problems—fertilizer causes water pollution and groundwater is dwindling in a lot of places. So the way I see it, technology can create breathing room, but if we continue growing, we inevitably eat that up and find ourselves in an even tougher spot.

One way to create a sustainable economy is to increase the research and teaching devoted to this concept in universities. The University of Vermont is one of a handful of universities with an ecological economics program and I’d love to see more.

Also, our culture has to change. We’ve got to shift consumer behavior away from materialism and toward things that help us achieve well-being, like focusing on relationships with friends and family and taking part in activities that are meaningful to us. 

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Changes in personal behavior aren’t enough by themselves—we’ve got to develop new economic institutions and policies. These changes will undoubtedly be difficult to implement, but unlike infinite economic growth, at least they’re possible.

If this shift is successful, we’ll have an economy that meets people’s needs without undermining the planet’s life-support systems. One thing’s for certain: The changes will only materialize when we achieve widespread recognition that enough is enough.

Rob Dietz is the coauthor of Enough Is Enough and the editor of the Daly News. He is also the former executive director of the Center for the Advancement of the Steady State Economy. He lives with his family in a cohousing community in Corvallis, Oregon.

 

 

  • Guest

    See “Small is Beautiful” by Schumacher, cf approx. 1970…

  • Jen

    Thank you for this sane response. These ideas are catching on and taking hold. Enough is enough indeed.