Thursday, January 12, 2012

Do we really need economic growth?

There's a fascinating recent article in The New Scientist (£) which mentioned the book The Limits to Growth from 1972 which was updated in 2004. It used a computer model to analyse what would happen if growth continued. Would it eventually come to an end? The model suggested that eventually population growth and over-use of resources would mean it would come to an end. The problem though was that it also suggested that, as with many economic matters, there would be an overshoot so that rather than smoothly tailing off, it may well result in a sharp decline. Whether or not this is all accurate and wherever we may be in that cycle, it does raise the question as to why growth in itself should be a goal? Now, I fully understand why it might be at the moment whilst the country is in a mess and without drastic spending cuts growth might seem the only way forward. But looking beyond the horizon, an end to growth doesn't necessarily mean an end to innovation and entrepreneurial zeal. On the contrary it could mean more competition and efficiency savings as companies chase shares of a static pie. But beyond that, the bigger question is why we need to keep on increasing our consumption? One of the few positives to come from the recession is that it does feel that lots of people are now starting to ask the same question from all political sides of the spectrum and maybe as we move forward, a greater emphasis will be placed on families, communities and the environment in which we live and less on conspicuous consumption and a celebrity driven media.


Nick Holmes said...

Absolutely. You only have to look at China to realise that we can't go on like this.

Tim Kevan said...

Hi Nick, Yes, very good point. Best wishes, Tim