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Date: 2022-07-02 Page is: DBtxt001.php txt00009460

The Matter of Growth

Can the world get richer for ever? ... Many in the world are getting richer, yet there are still billions of people living in poverty

TPB ... 150316 ... Jae ... an interesting piece, but really nothing that has not been said before a thousand times.

It seems to me that the challenge is to actually do something that changes the trajectory of enviro-socio-economic performance in a meaningful way. Lots of talk. not much walk!

People touch on the issue of metrics ... but then nothing changes. In this article, reference is made to Ashish Thakkar having one view and Vandana Shiva having a different view. If the metrics were sensible, they could both be right and get on with doing what needs to be done. Then Gillian Tett, the US managing editor of the Financial Times is referenced as thinking that economists have too narrow a view of growth ... we know that ... but there it ends. What is going to get done to change the mindset. Much of this has been talked about for decades, but nothing gets done to change anything.

In my view there are two reasons for this sad state of affairs: (1) there is a community of people with considerable power and influence who are very comfortable with the status quo ... and in general these people make the rules and decide what gets done; and (2) the community of people that understand the need for change are uncomfortable with the use of metrics, and are not embracing the idea that for systemic change to occur there has to be a change in the way things are measured ... you change the way you play the game when you change the way the game is scored.

I cannot do much about (1) ... but the matter of upgrading the metrics is something I intend to work on as long as I possible can. Getting meaningful metrics about quality of life and the stress on the environment should be as normal as getting metrics about corporate profits and stock prices ... and lest we forget, GDP growth!

Peter B ...
Peter Burgess

Can the world get richer for ever? IMAGE shoppers and slum dweller

Many in the world are getting richer, yet there are still billions of people living in poverty

Since the dawn of the industrial age, the world has been steadily getting wealthier, despite setbacks such as the Great Depression and the more recent global financial crisis.

We make more, sell more and consume more than ever before.

Yet, according to the United Nations, nearly three billion people still live on less than $2.50 (£1.70) per day.

So, how can we raise living standards for those who still live in poverty? The answer, according to most governments, is rapid economic growth.

Growth is seen as a panacea for a great many ills. It creates jobs, erodes debts and raises living standards. For politicians, it also generates votes. It is almost universally seen as a Good Thing.

Journalists are complicit in this. We frequently describe rapid growth as 'robust'. Slower growth is 'anaemic' and an economy in recession is often portrayed as 'sick' or 'ailing'.

'Boiling the oceans'

Yet there's a problem here. We live on a finite planet, but growth is exponential. So an annual increase in gross domestic product (GDP) of 3% might not sound like much - but it means an economy will double in size every 23 years.


Continued growth could cause long-term damage to the planet

So does this matter? According to Tom Murphy, professor of physics at the University of California San Diego, it definitely does, as economic growth goes hand in hand with increasing energy consumption.

'From a physical point of view, if we grew at 3% a year, in about 400 years' time we would actually be boiling the oceans - not because of global warming and CO2, but just because of the heat that is a natural by-product of the energy that we use,' he says.

These physical constraints, Prof Murphy says, will start to have an impact - for example, by creating cycles of boom and bust - and will make long-term growth impossible.

Accessible energy

This view is not entirely new. In fact, the English cleric and scholar Thomas Malthus made a similar point back in the 18th Century. His concern was not energy use but population growth.

He believed that the population would grow as living standards rose, and that eventually food supplies would run out. That hasn't happened so far. In fact, we have simply become much better at producing food.

So could we do something similar with energy?

IMAGE sunflower, solar panels, windfarm

Could renewable energy help negate the impact on the environment of economic growth? 'There's potential to get renewable sources of power that don't produce carbon emissions, that are cheap and easily accessible,' says economist and environmental campaigner Yoram Bauman. 'The goal is to get the cost of renewable power below the cost of, say, coal.'

Certainly there's little sign of anxiety within the financial industry.

'Historically, people have demonstrated a remarkable ability to deliver economic development and growth, often in the face of appalling manmade and environmental catastrophes,' says Joe Seifert, a former investment banker and now the chief investment officer for Indian fund Essar Capital.

'Resource scarcity in areas such as energy and water is a possible constraint, but there are vast natural resources that are untapped and human ingenuity has in the past overcome many such constraints.'

The right growth

On the face of it, that should be good news for many developing countries, who rely on growth to create jobs and boost living standards.

But growth alone is not good enough, says Ashish Thakkar, founder and chief executive of the Africa-based Mara Group. It needs to be the right kind of growth.

'Growth should not be about speculation and making a quick buck,' he says. 'It's seen as helping to lift people out of poverty, but we mustn't lose that mindset. It should not be about simply creaming away natural resources.'

IMAGE happy people on beach

A 'rich' life?

He thinks growth can still have huge benefits for developing countries.

But the well-known - and frequently controversial - Indian environmental activist Vandana Shiva has a very different view.

She believes that current measures of growth place too much emphasis on potentially harmful activities, such as logging or mining, and do not value natural wealth.

'Every story of growth is a story of environmental footprint that was encountered, of social dislocation,' she says. 'Growth is only measured in terms of commodification. It doesn't measure the life you're living, the nutrition you're eating, the quality of your life.'

'Work for hands and heart'

A Richer World

The world is getting wealthier - but with rising inequality, the BBC is investigating the winners and losers of this richer world in 2015.

She thinks we need to redefine what we mean by wealth and accept that economic growth often comes with a hefty price tag.

'Being rich means living a full life, living a life of meaning,' she says. 'Having work for your hands and your mind and your heart. Having a wide circle of compassion to give. On that there is no limit.'

One person who might have some sympathy for that view is Gillian Tett, the US managing editor of the Financial Times. But she is also a graduate in social anthropology, the study of peoples and how they relate to one another.

She believes the vision of growth put forward by orthodox economists is too narrow.

'People don't think about their lives in terms of numbers in a bank or in terms of numbers and spreadsheets. They look at their total sense of wellbeing and prosperity. Maybe that's the kind of thing we should be focusing on much more these days,' she says.

So perhaps, if we want to get richer forever, we should go back to the drawing board, and start to rethink what being rich actually means.

By Theo Leggett ... Business correspondent, BBC News
13 March 2015 Last updated at 18:00 ET Share this pagePrint
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