As Twitter users will know, it is never long after logging on that you come across someone who is wrong on the internet. And yet, for all the obvious wrongness out there, it is harder than you might think to find something that is completely wrong about absolutely everything.
However, the authors of The Tragedy of Growth have pulled off this unlikely feat. The report, published this week by the left-wing research and campaigning organisation Positive Money and backed by Labour’s Clive Lewis MP, the Green Party’s Caroline Lucas MP and former Conservative environment minister Lord Deben, is so perfectly, impressively wrong. It is a slam dunk of wrongness.
“We show that GDP growth, regardless of the form it appears to take, does not enhance life satisfaction, alleviate poverty, or protect the environment,” argue David Barmes and Fran Boait before doing nothing of the sort but nonetheless proposing that the Office for National Statistics stop publishing GDP figures and the Treasury stop targeting GDP growth.
GDP-scepticism falls into two camps: those who think GDP is an inadequate measure of economic activity, and those who think the problem is the economic activity itself, rather than how we measure it. The Tragedy of Growth falls firmly in the latter camp, among the champions of what is known as the “degrowth” agenda.
The argument comes in two parts. First, growth hinders, rather than helps, human well-being. Second, the problems that emerge in the absence of growth are not caused by that lack of growth per se, but by “the basic features of capitalist economies” that create the imperative for growth in the first place. In other words, dealing with growth means abolishing capitalism.
Part one requires some impressively flexible thinking. After bravely including a chart that shows a strong correlation between GDP per capita and self-reported life satisfaction, the authors explain the (fiercely contested) Easterlin paradox and claim there is “no positive relationship between GDP growth and life satisfaction”. But they do not think that is because material improvements don’t make us happy. Instead, they then claim that “growth does not deliver an increase in life satisfaction because it mostly goes to the world’s wealthiest and does not entail greater success in meeting human needs.” In other words, the argument is not that material improvements don’t matter to life satisfaction, but that growth does not deliver those improvements.
A mountain of evidence suggests otherwise. As countries get richer, it isn’t just that poverty rates fall, but all sorts of measures of living standards improve: literacy rates and life expectancy shoot up, infant mortality rates plummet. You might think The Tragedy of Growth would offer an alternative explanation for these longer, healthier and less impoverished lives. Instead, it just ignores them.
Beyond misleading red herrings like the fact that “a majority of the world’s poor are actually concentrated in countries that have experienced strong economic growth in recent decades”, the report’s authors offer next to nothing in response to the billions of lives that stand on the other side of the ledger. They claim that the “concept of poverty… ignores cultural diversity”, whatever that is supposed to mean, and assert that GDP growth in poor countries just reflects a shift from informal to formal economic activity “rather than a reflection of any increase in the provision of new goods and services to the poor”.
It is one thing to say that incontrovertible, widely observed gains in living standards are overstated, or not the result of economic growth, or that they come with an environmental price tag that is too dear. These might be bad arguments, but they at least make some account for the world as it is. The Tragedy of Growth, however, is set in a parallel universe.
The claims only get more incoherent. Having insisted there is no upside to growth, they then concede that there are costs to a lack of growth — but only under capitalism. You see, the problem is “interest-bearing debt” which, “as a key pillar of the capitalist system… is deeply linked to the system’s multiple growth imperatives, and we find no convincing evidence that it could comfortably co-exist with a non-growing economy”. Behind these garbled claims is a well-worn critique of “financialisation” and a failure to acknowledge that capitalist systems are hardly alone in pursuing economic growth. Centrally-planned economies have generally been just as obsessed with increasing output.
To bolster these flimsy arguments, and to sidestep the terrible timing — arguing for an end to growth as millions face unemployment because of a massive contraction in economic activity — Positive Money commissioned some polling to accompany the report. The YouGov survey finds that eight in 10 Brits want the government to prioritise health and well-being over economic growth during the coronavirus crisis and six in 10 would like the government to continue to do so after the crisis is over.
It is hardly a surprise that so many agree. But it does not mean that 80% of us are ready for the degrowth revolution. After all, putting well-being before growth is the approach the British government, and more or less every other national government, is taking to the coronavirus. It is why we do all sorts of things, like spend 10% of GDP on healthcare, for example.
Happily, however, the choice usually isn’t between GDP growth and well-being. The degrowth fringe might choose to ignore the evidence, but it suggests that the two very often go hand in hand. Which is why we would be mad to stop measuring GDP, let alone no longer target it. In fact, if Britain wants to be a healthy, happy country after Covid-19, growth needs to be pursued with more enthusiasm than before the crisis.
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