We Have a Growth Problem

We have a growth problem.  And when I say “we" I mean both our population and our system and when I say “our system” I mean Capitalism.  Capitalism is a system predicated on the idea that you’ll get out of it more than you put in.  That’s the entire impetus for the capitalist to invest his capital in labor power and means of production.  He believes that he’ll get out of the system his investment plus more than he put in, i.e. a profit.

Likewise, the bank lends money with the expectation that they’ll get back their investment plus a profit in the form of fees and interest.  So for every dollar we borrow on a credit card or a home loan, for example, we have to earn more money to pay it back.

Growth is also the currency by which companies are judged.  Public companies have to grow in order to increase their share price rather than make a profit and pay dividends.  Start-ups, particularly those that are unprofitable, use growth as their mechanism to get big valuations by showing increase in customers, market share, likes, engagement, etc.

It gets worse, though.  The health of national economies is typically measured in GDP but more specifically the growth of GDP.  The ideal GDP growth rate is classically set at 2-3% per year.  Of course this means that our domestic output has to grow in perpetuity.

Without boring you with quotes, I’ll just say I’m not the first person to think that the idea of infinite growth on a finite planet is kind of a silly idea.  As human populations continue to grow and as economies continue to grow, we have to produce more and more in order to keep up.

This is, in part, why our ecosystems are in the dire straits they’re presently in.  More production needs, more transportation needs, and more agricultural needs all dump more and more carbon into the atmosphere.

Some have argued that the market will solve the growth problem through pricing adjustments.  As resources get scarce the price on commodities will go up causing consumers to purchase fewer goods followed by the production of fewer goods and eventually we’ll slow down using those resources.  Which sounds great save for two things:

First, as purchases of commodities slows due to consumers being priced out of the market, so too will your growth slow, causing the collapse of the very foundation of the economic system itself.  Second, and perhaps more dire, this slowing of resource extraction may come when we’re already too far down the path of climate change.

Eventually we’ll have to come up with another mechanism by which to drive economic development and measurement.  At least one proposal is measuring Gross National Happiness, by which you set up an economic system that will drive the most satisfaction amongst your population.  Perhaps there are yet other, as yet un-proposed metrics we’ll be able to utilize in the future.