Category: Economic Growth & Inequality

Comment on < iied.org >’s Growth Fixation posting by Tom Birch:

Just want to add two quick things here:
[1] This short-sighted preoccupation with economic growth, as part of national policy, is actually a fairly recent phenomenon. When GDP measures were initially introduced as a regular feature of national accounting (which was only in the 1940s), they were at first used towards highly specific objectives – admittedly, back then, stimulating employment was frequently one of them. And those were the dark-ages. For an example of what I mean by this, look no further than the words of U.S. Secretary of the Treasury Morgenthau at Bretton Woods (1943): “… [it is an] elementary economic axiom … that prosperity has no fixed limits. It is not a finite substance to be diminished by division.” By the 1950s, economic growth had become an end in its own right.
[2] In addition to the substance of Rachel’s linked article, Japan provides another powerful lesson for those enlightened few [yes, that’s us] that have come to see economic systems as subsystems of the geobiosphere: it is that a significant decrease in GDP energy density can be achieved while maintaining a high GDP. That is, the Japanese managed to markedly decrease their *per-dollar* carbon footprint to one of the lowest in the developed world without actually *lowering* their output. They pulled this off mostly in the decade prior to the commencement of the current recession. It may not be zero-growth, but it’s certainly a start.