Should We End Economic Growth?

This idea – that is of course not new – is in some sense as radical and hinges on the same human traits as communism does. It would deprive people of their ambition and as probably some systems would keep their growth focus the latter ones would be superior and squeeze out the new system again. Just as communism was bound to fail due to the competition with capitalist systems. Does this mean we should drop this idea and put it into the utopia corner? To answer this question I want to explain briefly some ideas of Karl Marx, who is often perceived as the founder of communist ideas. Marx described for the most part the economic conditions of severe inequality caused by the extreme capitalism of his time. He also predicted the overthrowing of the system by a possibly violent revolution. He actually was quite vague when it comes the exact form of a new system. What he caused was an enormous fear among the establishment which reacted in order to prevent Marx’s predictions. Marx´s warnings and predictions contributed to the fact that they actually did not come true in some parts of the world (in some they did of course). The capitalist system is quite flexible and managed to incorporate many of the socialist ideas that were proposed by Marx´s fellows.

An economy that is not allowed to expand will be doomed to failure for the same reasons as an economy without any income differences. However, the postulation of such radical changes will hopefully cause what the communist ideas caused: A change in the way capitalism works and the incorporation of more sustainability. We are already in the middle of this process with a shift in the perception of renewable energies and climate issues. Hopefully, the global economies will be flexible enough to undergo the necessary changes. In general, sustainability and environmental issues suffer naturally from a political problem that is often called “free rider problem”. Without a unified global leadership this is extremely difficult to circumvent as some countries profit from others’ efforts in those areas. The current crisis is extremely harmful to that process as protectionism grows and everybody is concerned with their own troubles.

To answer my question finally: It goes against human nature to abandon the concept of growth altogether and will therefore not work. Although the idea seems promising to people rightly concerned about the future of our planet, simply ending economic growth will not fix it. This shall in no way mean that we should neglect global environmental and sustainability issues and go on with business as usual. The world is steering towards a severe environmental crisis and bold action is necessary. However, the proposal to end growth is just not thought through properly and just too radical and will in the end just bring us to the point where we started. And we might not have time to try another big economic experiment to gain that insight.

Image by BinaryApe via Flickr