Is Economic Growth a Delusion?
… what if our hope for recovery stands on false assumptions? Economists tend to imagine the economy as taking place between production and consumption. But there is a larger economy of which ours is only a subset. Why then do we only speak about the economy in terms of growth? Because our history reinforces the belief in growth.
Beginning 250 years ago, political economists in Britain, France, and the United States asserted that material progress distinguished modern, commercial societies from all others. They said that the perpetual increase in wealth required only the necessary tools against the hoarding earth. Need more metal? Dig deeper mines. More fish? Use larger nets. The model held that natural capital is infinite. Advocates of economic growth acknowledged a dark side to progress. Almost all of them believed that the transfer of matter from the environment to the economy must never stop. By the 1840s–if not before–leaders in politics, business, and science asserted that growth held society together, keeping it from falling back into barbarism.
The political economists came up with their theories without asking many questions about the stuff of wealth. They appealed to Providence–the sustenance offered by a compassionate God. Their logic worked like this: Since God wanted people to manufacture things and grow rich, God will provide all the necessary raw material. Economic growth remains the heir of this mystical thinking. For while today’s economists never appeal to Providence, they remain believers. They embrace the same spooky faith that the economy grows from quarter to quarter in “normal” years and that the stuff underlying that growth has no earthly limit.
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