The Growth "Imperative"
Economic growth is not simply the piling-up of more stuff. Rather, economic growth is the satisfaction of more human desires.
August 12, 2018
Lindy Davies

Progressive pundits say that we can no longer afford our "addiction" to economic growth. We're told that making more things, more pollution-spewing engines, more factory-farmed meat and milk, will only ruin the planet more quickly. Not only that: they say we buy these things with more and more borrowed money, piling up debts that can never be paid back without even more relentless GROWTH! When our leaders point with satisfaction to an increased GDP, aren't they just endorsing an unsustainable status quo, to wheedle our votes?  How do we get off the vicious merry-go-round?

To make sense of this, we must (as is so often the case) first be clear on the meaning of our terms. What IS economic growth, anyway?

It sounds like economic growth is pernicious: the piling up of more and more STUFF that's too expensive, pollutes the environment and will end up, all too soon, in landfills.

But: what, after all, is the purpose of economic behavior? It's to satisfy human desires. Sometimes, yes, human desires are satisfied by things, fuel-burning machines and such, with all those downsides (what economists call "externalities"). But other times, human desires are satisfied by the beauty of nature, by music, by relaxation and contemplation. And indeed -- as becomes ever more evident -- desires are also satisfied when goods and services are produced WITHOUT degrading and befouling our world.

Economic growth is not simply the piling-up of more stuff. Rather, economic growth is the satisfaction of more human desires.

This insight has surprising ramifications. Let's think of one of many examples: agriculture. In the United States, large-scale industrial farming benefits from subsides of many kinds. In particular, an unbelievably huge amount of corn is grown in the US. Roughly 35% of that corn crop is refined into ethanol and burned in cars. A similar percentage goes to animal feed, and much of the remainder goes into the production of unnaturally cheap high-fructose corn syrup. Very little of that bountiful harvest goes directly to feeding people. This industrial farming uses a great deal of machinery and petroleum-based fertilizer (more oil is consumed in producing ethanol than is saved by adding it to gasoline). In short, the production of corn in the US is a prime example of a system that produces more -- way more -- harmful, polluting STUFF than it does satisfaction.

Or consider a nation, say, in West Africa that produces large amounts of cocoa and rubber for export. Its GDP increases with every ton it exports -- yet its people live in dire poverty. Clearly such an economy is producing more STUFF than satisfaction. And why? Because the people who grow the crops do not own the land. If they did, they could grow the food they want. But they do not, so to survive, they have to grow export crops, for low wages.

True economic growth is a NET increase in human satisfaction. Too often, we're told that economic growth is a process that consolidates resources in the hands of the wealthy, creating damage that everyone has to pay for. That's not growth. It's regression. We need to be very clear about this.

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LINDY DAVIES was Program Director of the Henry George Institute and Editor of the Georgist Journal. He was the author of The Alodia Scrapbook, the fictitious story of how a struggling African nation used Geoism to set itself on the path to prosperity, and of the novel The Sassafras Crossing. He managed a successful campaign to get the Henry George Institute's distance-learning program approved by the National College Credit Recommendation Service. He passed away in 2019, and is lovingly remembered by the many people whose lives he touched.