Library of Congress
Economic growth sits at the root of all plans to tackle poverty. The two concepts – growth and poverty reduction – are treated as practically interchangeable. Nowhere is this more apparent than in the new UN Sustainable Development Goals (SDGs), which promise to eradicate poverty ‘in all its forms everywhere’ by 2030. The entire formula for success rests on economic growth; at least 7 per cent per annum in the least developed countries, and higher levels of economic productivity across the board. Goal 8 is entirely dedicated to this objective.
This feels intuitive and logical. If economic growth equals more money, and poverty equals a lack of money, then economic growth equals less poverty. And this is, of course, the prevailing logic for all human development. The idea that if you’re not growing you must be dying is writ large. Every country, every company, every individual must grow their material wealth over time; both the whole and every one of its parts must be on a constant growth curve. Taken together, we might see this as a form of totalitarianism – the totalitarian imperative of growth.
There are two problems with economic growth as a measure of wellbeing. First, the correlation between economic growth and poverty reduction is weak. It’s a reminder that intuition and ‘common sense’ do not always correspond to evidence. Globally, the trends are clear. Since 1990, global gross domestic product (GDP) has increased 271 per cent, and yet both the number of people living on less than $5 a day, and the number of people going hungry (using the Food and Agriculture Organization of the UN’s definition of available calories for the mid‑point between normal and intense activity levels) have also increased, by 10 per cent and 9 per cent respectively. Add to that the wage stagnation across the developed world, and increasing inequality both within and between countries pretty much everywhere, and the shakiness of this basic logic becomes evident. Aggregate economic growth does not translate into less poverty, which is the stated objective of the SDGs.
This is not to suggest that a larger economic pie doesn’t benefit many people; it does. But that is simply not the same as saying that it reduces poverty. We live in a world where 95 per cent of all income from growth goes to the richest 40 per cent, and the concept of trickle-down neoliberal economics has been shown, in the words of Alex Andreou in The Guardian last year, to be ‘the greatest broken promise of our lifetimes’.
Maybe this would only be ‘problematic’, something that could be fixed by tweaking the growth model while keeping the basic imperative in place, were it not for the second part of the problem. Totalitarian growth is destroying us, in the most real and painful way. The consumption-driven mechanisms we use to achieve it, and the GDP measure we use to define it, have us locked on a path to ruin by actively encouraging us to treat finite natural resources as if they were infinite, and prioritise the growth of the money supply over everything else. Said another way, the perceived moral imperative for economic growth actually contradicts the laws of nature.
The problem is, GDP doesn’t care about the environment or human suffering; they are irrelevant ‘externalities’. In fact, GDP actively rewards destruction of the environment, which by short extensions produces, rather than eliminates, poverty, especially for those already impoverished or at risk of so being. Every forest razed, every armament sold, every industrial pollutant created, even the profits from drugs and prostitution, all register as positive for GDP. And so as we grow, so we destroy. Left unchecked, it can result only in the complete exhaustion of the sources of value, and indeed life, it draws upon. This is the logic of the cancer cell, but at least in medicine we recognise it as the definition of a disease; in politics and economics we call it progress.
It’s been more than four decades since the first comprehensive study of this terrible reality was produced by systems scientists at the Massachusetts Institute of Technology, in The Limits to Growth (1972). And yet, the vast, UN-directed network of governments, international institutions, NGOs and corporations still have not accepted that this core measure of progress in mainstream policy circles today is fundamentally flawed.
The reasons are not hard to fathom. They are the same now as they were when The Limits to Growth was published, and since then its projections have been repeatedly validated. Totalitarian growth is a sacred cow in orthodox economics; both governments and corporations the world over use GDP and its private‑sector corollary, profit, as their prime directive. To challenge this is to challenge power, which is precisely what the SDGs fail to do.
The strategic priority from the outset has been to draw as many actors to the table as possible. A laudable intent, it has generated the most widely consulted-upon set of goals the UN has ever produced. But, in order to achieve this, they have had to make it a comfortable, unchallenging space, which has not only meant that there are no binding targets for anyone but the poorest, but that certain questions have been avoided, almost all of which revolve around growth and consumption.
The result is this: ‘by 2030, build on existing initiatives to develop measurements of progress on sustainable development that complement GDP’. It is hard to imagine a less purposeful statement, or one less commensurate to the challenges of the age. It is, in fact, a masterful act of obfuscation: acknowledge the problem in passing, so that you can kick it into the long grass.
Perhaps more pernicious still, this fatal flaw is being hidden beneath layers of marketing spin. The SDGs are being sold on the almost irresistible claim that their predecessors, the Millennium Development Goals, led to poverty being halved since 1990. This is a false conceit, drawn out of manipulated, misleading data, but it is a very useful one because it provides the underlying logic that the growth model is basically sound, and can be relied upon to eradicate poverty by 2030.
It cannot. Growth for growth’s sake is the poison in the well; the fatal flaw that is leading us over the cliff of environmental and social catastrophe. Given how central this problem is to the future, it amounts to a dereliction of duty by those responsible. It is now up to the world outside the charitable industrial complex to make the urgent case for moving beyond GDP as the measure of human progress.
