An economy focused solely on growth is environmentally and socially unsustainable

Digging for dollars: an new way to view economic growth. money growing via www.shutterstock.com

Most world leaders seem to believe that economic growth is a panacea for many of society’s problems.

Yet there are many links between our society’s addiction to economic growth, the disturbing ecological crisis, the rapid rise of social inequality and the decline in the quality of democracy.

These issues tend to be explored as disconnected topics and often misinterpreted or manipulated to match given ideological preconceptions and prejudices. The fact is that they are deeply interconnected processes. A large body of data and research has emerged in the last decade to illuminate such connections.

Limited biosphere

Studies in social sciences consistently show that, in rich countries, greater economic growth on its own does very little or nothing at all to enhance social well-being. On the contrary, reducing income inequality is an effective way to resolve social problems such as violence, criminality, imprisonment rates, obesity and mental illness, as well as to improve children’s educational performance, population life expectancy, and social levels of trust and mobility.

Comparative studies have found that societies that are more equal do much better in all the aforementioned areas than more unequal ones, independent of their gross domestic product (GDP). Economist Thomas Piketty, in his recent book Capital in the Twenty-First Century, has assembled extensive data that shows how unchecked capitalism historically tends to increase inequality and undermine democratic practices. The focus of a successful social policy, therefore, should be to reduce inequality, not to grow the GDP for its own sake.

Placing economic growth above all else contributes to environmental degradation and social inequality. Pollution via www.shutterstock.com

Concurrently, recent developments in earth system science are telling us that our frenetic economic activity has already transgressed several ecological planetary boundaries. One could argue that the degradation of our environmental systems will jeopardize socioeconomic stability and worldwide well-being. Some scientists suggest that we are in a new geological epoch, the Anthropocene, in which human activity is transforming the earth system in ways that may compromise human civilization as we know it. Many reports insist that, if current trends continue, humanity will soon face dire and dramatic consequences.

New framing

If we consider all these findings as a whole, a consistent picture emerges: constant economic growth is a biophysical impossibility in a limited biosphere, and the faster the global economy grows, the faster the living systems of the planet collapse. In addition, this growth increases inequality and undermines democracy, multiplying the number of social problems that erode human communities.

In a nutshell, we have created a dysfunctional economic system that, when it works according to its self-imposed mandate of growing the pace of production and consumption, destroys the ecological systems upon which it depends. And when it does not grow, it becomes socially unsustainable. In a game with these rules, there is no way to win!

ecological economics via www shutterstock com

The good news is that breaking the spiral of socio-ecological disaster might be easier than we think. We do not need a technological miracle or a new planet to colonize, but only to change the way we frame things.

Let’s assume that we all agree on some basic facts: first, that the biosphere contains and supports the living systems of the planet; second, that humans are one of the many species embedded in the biosphere and dependent upon its proper functioning; and finally, that an economic system is (or should be) a tool that humans deploy to organize their societies in a functional way.

Based on these commonsense assumptions, the economy is a subsystem of the ecology, not the other way around. Mainstream economics are dysfunctional because they start from the premise that societies and ecosystems must adapt to the market economy. If we begin to organize our priorities according to the biophysical reality rather than the market’s demands, it quickly becomes clear that our dominant economic system is absurd because it destroys the ecosystems that are the source of its wealth.

Alternatives to the fixation on growth

A commonsensical economy should arrange human activity within ecological limits in a way that enhances social well-being. In an alternative and in my view, desirable, economic model, the goal becomes to serve the well-being of communities and ecosystems, not to accumulate capital.

At a global level we cannot afford to grow at all since we need to reduce economic throughput to be sustainable. However, some regions may benefit from economic development, but a different one that tries to decouple economic growth and environmental degradation.

Once we acknowledge the biophysical and social limits of growth, the next step is to embrace ecological economics as the appropriate tool for achieving our new goals. We do not need to start from scratch, for there is already substantial literature on the topic, and numerous activists and researchers, advancing theories and practices on de-growth, post-growth, prosperity without growth, steady-state economics, new economics, economics for the common good, and so on.

They explore and analyze diverse policies explicitly designed to reduce the superfluous consumption of energy and materials while creating more just, livable, and sustainable communities for everyone. Many of these policies have already been put into practice, with results that offer abundant cause for hope. These ideas offer hope for a human future in which global leaders stop prioritizing growth over social and ecological sustainability.