This article is a response to Janan Ganesh’s piece: ‘Yes, GDP is (almost) everything

In his recent article “Yes, GDP is (almost) everything”, Janan Ganesh argued that despite the rising critiques of economic growth as an obscurer of what we genuinely value in society (nature, happiness, justice, and so on), a rising GDP is still the surest measurement of a morally desirable society, even for all its faults. He says:

“There are two problems with the line that GDP isn’t everything. One is that no sentient being has ever claimed that it is. The other is that GDP is very nearly everything. Immigrants versus nativists, cities versus provinces: the cultural fault lines that marble the body politic of the western world were there before the crash of 2008. The difference was that governments could veil them with cash.”

This article is sober and incisive, and possibly the most direct insight into not only the intellectual culture of growth-based economies, but also a snapshot into their real functioning. Modern heterodox economic movements, ecological, donut, wellbeing, and so on, might balk at this idea, but I would argue that at the basic level, Ganesh is entirely correct in his correlation of social success and GDP growth. Degrowth and other strands of ecological economics (or even Collapsitarians) are indeed correct that endless growth on a finite planet can’t go on forever, but that doesn’t mean our contemporary body politic doesn’t require it.

As the gears of the neoliberal era rust against extreme weather, pandemics, war, looming famine, and the early onsets of peak oil, its delivery of growth is sluggish and ever more pained. As growth plateaus, it is easy to correlate this trend to rising social tensions. Strikes, fuel poverty, even government overthrows in places like Sri Lanka are closely tied to this sluggish GDP. Correspondingly, extremer politics and reactionary erosion of rights are springing up to try quell the unrest, but little is done (if it even could be) to ameliorate the underlying issue: global GDP is stumbling.

Looking at all this, its obvious Ganesh was correct that we needed GDP to ensure the contemporary social contract, and that’s exactly why we need to end it.

Diminishing Returns

As the world is subject to a crushing ecological collapse driven primarily by this growth in its economy, many have convincingly suggested that we must include global ecosystems in the value system of global markets. The economic order, so the logic goes, is an unstoppable juggernaut that has no need to care for that outside it, but what is included within it has an inherent advantage. This has been the logic of ecosystem services, as well as its more modern derivatives such as carbon credits and natural tokenisation. In Indonesia, farmers were paid to preserve their adjacent jungles, and as long as the project continued the forests remained. Yet, when the project funding dried up, not only did they begin deforesting again, but on a more extreme level than farming communities who were never involved with the scheme at all.

This is the quandary of Ganesh’s piece. He outright acknowledges that economic growth doesn’t resolve underlying tensions, but merely drowns it out in the distractions of prosperity. It induces us to let our arbitration abilities atrophy, further justifying the pursuit of growth as the only metric towards social desirability. It is an antibiotic remedy, integral in appropriate dosage, but exacerbating the problems it seeks to solve if overused. Much as economic growth tends to deliver less and less profit as it goes on, the social dividends seem to be depreciating too. The ‘recovery’ after the 2008 financial crash was failing to deliver even before COVID hit. Donald Trump rose to power on a wave of social and economic discontent, and countries like Chile almost collapsed amongst anti-austerity riots.

Human infrastructure (mainly concrete) already outweighs all living biomass on earth, and if this sheer amount of physically embodied GDP was failing to satiate the socio-economic needs of developed nations (let alone the Global South), how much more mass could we need to paper over tensions now?

Fighting the Inevitable

However, where Ganesh is incisive in his correlation of GDP to the social contract of modern nation states, his opinion on the opponents of GDP — from degrowthers to (apparently) David Cameron and Prince Charles — are less cognisant:

“The looming recession will be painful. But it will also drive a certain kind of post-materialist humbug from polite discourse. Growth will be harder to dismiss as a bean counter’s tawdry obsession when there is so little of the stuff to go round.”

Rather, as hard biophysical limits are approached and the stability of systems (from climate to the US-unipolar world) begins to unravel, various voices are cautiously approaching the question of a world without growth. Whether it is Reuters publishing on this ‘economic heresy’ or European governments requesting voluntary water rationing, the discourse on degrowth (outside its dedicated partisans) is only growing.

The end of growth is a physical certainty, and a green, non-extractive growth only a myth; an artefact of statistical errors and economics wishes. The question asked by serious political economy now is not ‘how do we perpetuate growth’, but rather, if it will be degrowth by design, or by disaster.

Teaser photo credit: By Arjun R – Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=58243501