It seems to be almost axiomatic these days to think of economic growth as an unfettered good. But must it always be so? Johann Hari in the April 2010 of The Progressive magazine wrote in a review of a book about John Maynard Keynes, whose influential work has been used to fuel growth, about what that famous economist thought about when we might know that it might be time to call a halt to growth.
But Keynes’s analysis ran deeper still. He didn’t only see the problems unfettered markets caused in his own time; he peered way ahead, to glimpse the problems they would cause at our stage of economic development too. He understood how to ensure economic growth better than anyone, but he thought there would come a time—around about now—when the ceaseless pursuit of economic growth had done its work, and we should abandon it.
Today, the only shared structural goal of our society is to grow, grow, grow—so Keynes’s questions seem, at first, puncturing and bewildering. What is economic growth for? Why do we do it? Keynes said it should have only one goal: to enable human beings to live “wisely, agreeably, and well.” For a time, growth will—provided it is matched by a redistributive state—achieve this. It will make people less hungry, less cold, less ill, and therefore more happy. But he saw that there would come a time when a society had achieved “abundance”—and growth would stop adding to the sum of human happiness.
It was an uncannily accurate prediction. Professor Richard Layard of the London School of Economics has conducted pioneering research that proves once a society has a certain basic level of comfort, chasing more money doesn’t make us any happier. Over the past fifty years, Western societies have become massively wealthier—yet we are no happier. We are all running ever more frantically on the growth treadmill, but we are getting nothing out of it. Sure, we can—if we are lucky—keep a few inches ahead of our fellow citizens, and we can buy more flashy consumer durables we have been convinced by advertising to “need.” But it doesn’t give us joy.
Keynes also foresaw the other, even more crucial, point at which economic growth would hit the end of the runway. There are ecological limits to growth. We can burn and package and consume only so much before the planet becomes a depleted husk. Yet our economic models, again, cannot see environmental costs: Those are mere “externalities” that are always trumped by short-term profit. Carbon emissions might cost us the ecosystem, but they don’t cost corporations cash—so they continue. Keynes saw it coming, albeit in the shadows. In 1933, he wrote: “We destroy the beauty of the countryside because the unappropriated splendors of nature have no economic value. We are capable of shutting off the sun and the stars because they do not pay a dividend.”
The key is to try and ensure that everyone has a basic level of comfort and security, and the current rapidly growing inequality works against that.