It's Time to Consign GDP to the Rubbish Bin of History

GDP as a measure of national progress has become a lie. Today growth isn't progress. It's theft. It's a practice of robbing the future to maximize activity today. Heading toward the edge of a cliff is not progress no matter how much faster you're going.

Exceeding your one and only biosphere's ecological capacity is not progress. We've been "growing" ever since the early 70s when we first began exceeding our planet's ecological carrying capacity but only by resorting to conjuring tricks. We've grown our populations by rapidly growing our food production through the use of excessive irrigation plus chemical fertilizers, pesticides and herbicides but, in the process, we've been rapidly degrading our farmland to the point that the UN Food and Agriculture Organization warns we've got no more than 60 harvests left. Where is the progress in that? Future generations will need arable farmland but to meet our demands today we will deny them their future.  Where is the progress in that?

Today's Deutsche Welle looks at our lethal addiction to growth and explores our alternatives.

In 2017, Earth Overshoot Day — the date when humanity spent Earth's resource budget to live sustainably for the year — fell on August 2. In 1987, it landed on December 9. Today, we need 1.7 planets to meet our consumption demands — and that number could rise to two planets by 2030.

Unless we get that growth under control, not only will we be facing an "ecosystem collapse" due to the loss of species and conversion of land for industry and agriculture, we won't be able to stop global warming, according to some economists.

"The Paris commitments are unlikely to be met if we continue with growth of the economy," said Philip Lawn, a senior lecturer in environmental economics at Flinders University in Australia. Solving the climate crisis and continuing with economic business as usual are "incompatible" and "delusional," he added.

Degrowth

In the US and Europe, the idea of "degrowth" — a movement around downsizing production and consumption, and moving the economy away from infinite expansion in a just and equitable way — is gaining traction.

That's partly because of the growing gap between rich and poor. Part of the problem is that we measure society's economic progress and well-being using Gross Domestic Product (GDP), say some economists.

GDP measures the market value of all final goods and services produced in a country but ignores things like high unemployment and negative impacts on the environment that growth may have, such as increased air pollution. (Not everyone agrees with this assessment, of course.)

Economists like Lawn advocate using a measure called the Genuine Progress Indicator (GPI), which takes a variety of indicators into account related to economic, social and environmental progress.

In a number of industrialized countries, GDP has soared, while GPI has stagnated or declined. Take Australia. In the 1950s and 1960s, GPI and GDP largely went up together but since the 1970s, GDP has taken off while GPI declined significantly.

A point comes when growing the material welfare of a country doesn't increase the material welfare of the individual, said Lawn. At this point, growth should stabilize and there should be an emphasis on managing resources, distributing wealth more equitably and improving goods.

"Steady State" or "Full Earth" economics is based on shrinking economic activity until it is a subset of the environment. We have strayed far past our planet's ecological carrying capacity over the past forty years and reality is beginning to catch up with us and it's frightening. There aren't many who want to reduce their perceived standard of living but it's not a matter of choice. We either return to the limits of the biosphere and do it on our own terms or we'll be driven back and that won't be on our terms.

The important part of steady state economics is that, while it restrains consumption and production along with population at roughly sustainable levels, it still accommodates growth - not in GDP but growth in knowledge and quality of life.