Guest post: To Save The Economy, We Have To Break Its One Sacred Rule

Written by Jason Hickel, originally appeared on FastCo on 15/03/16.

Scholars are still trying to figure out why the society on Easter Island collapsed, ending the people famed for their construction of towering stone heads. One interesting theory holds that it had to do with the heads themselves. Somehow, the islanders decided that the giant heads represented power and success, so different groups competed to build as many heads as possible. But because there was only one quarry, to move the stones around the island required felling trees to use as rollers. To feed their lust for heads, they felled the trees so eagerly that, over just a few generations, what was once a tropical forest was reduced to barren scrubland.

The islanders must have realized that their obsession with heads would quickly spell their doom. As the project wore on, they no longer had sufficient wood to build fishing boats or houses, nor trees from which to gather fruits and nuts. They must have seen this disaster unfolding—slowly starving to death and forced to live in caves for shelter—right up until they felled the last palm. It was all because of a myth, but a myth so powerful that, despite knowing its madness, they could not resist it.

Humans are strange creatures. We create our own myths and then we live by them almost as though we didn’t create them at all, as if they were handed down to us by the gods. And this is not just a characteristic of small societies. Our global civilization has its fair share of powerful myths, one of which is remarkably similar to that which destroyed Easter Island. Just as multiplying heads became the sacred rule of Easter Island economics, so there is one sacred rule that underpins our global economic system: namely, that GDP must grow, and must grow at all costs. Why must GDP grow? Because GDP growth is equivalent to human progress.

We tend to take the GDP measure for granted as though it has always existed. Most people don’t know that it was invented only recently. It has a history. During the 1930s, the economists Simon Kuznets and John Maynard Keynes set out to design an economic aggregate that would help policymakers figure out how to escape the Great Depression. Kuznets argued for a measure that would help us maximize human well-being and track the progress of human welfare. But when World War II struck, Keynes argued that we should count all money-based activities—even negative ones—so we would know what was available for the war effort.

In the end Keynes won, and his version of GDP came into use. GDP was intended to be a war-time measure, which is why it’s so single-minded—almost violent. It counts money-based activity, but it doesn’t care whether that activity is useful or destructive. If you cut down a forest and sell the timber, GDP goes up; GDP does not count the cost of losing the forest as a habitat, or as a future resource, or as a sinkhole for carbon. What is more, GDP doesn’t count useful activities that are not monetized. If you grow your own food, clean your own house, or take care of your aging parents, GDP says nothing. But if you buy food from Tesco, hire a cleaner, and send your parents to a nursing home, GDP goes up.

Of course, there’s nothing inherently wrong with measuring some things and not others. GDP itself doesn’t have any impact in the real world. GDPgrowth, however, does. As soon as we start focusing on GDP growth, we’re not only promoting the things that GDP measures, we’re promoting the indefinite increase of those things. And that’s exactly what we started to do in the 1960s. GDP was adopted during the Cold War for the sake of adjudicating the grand pissing match between the West and the USSR. Suddenly, politicians on both sides became feverish about promoting GDP growth. GDP growth became a sacred rule. And we remain in thrall to it today.

The imperative for growth is incredibly powerful; probably the most powerful force in our world. When the entire global political establishment puts its force behind this goal, human and natural systems come under enormous, overwhelming pressure.

What does this pressure look like in the real world? In India, it looks like corporate land grabs, which leave peasant farmers dispossessed. In the U.K., it looks like privatization of public services—with corporations eager to exploit untapped markets. In Brazil it looks like deforestation, which is eating the Amazon at a rapid clip. In the U.S. it looks like fracking, backed by a government desperate for cheap energy. Around the world it looks like trade agreements that strip away regulations that protect workers and the environment. And for all of us it looks like longer working hours, expensive housing, depleted soils, polluted cities, wasted oceans, and—above all—climate change.

We normally think of these as separate crises. But they are not: they are all connected. They all proceed from the same deep logic of GDP growth, the collective madness at the heart of our economic system. To fight them as separate issues is to mistake the symptoms for the disease.

People who spend their lives pushing against these destructive trends will tell you how futile it feels. It is futile because our governments don’t care. They don’t care because according to their most important measure of progress, destruction counts as good. Indeed, under the tyranny of GDP growth, the destruction must continue at all costs. The problem here is not that humans are inherently destructive. The problem is that we have created a myth that encourages us to behave in destructive ways, and have given that myth the power of a sacred rule. As Joseph Stiglitz has put it, “What we measure informs what we do. And if we’re measuring the wrong thing, we’re going to do the wrong thing.”

Why does GDP growth retain such a hold on our imagination? Because we assume that when GDP goes up, it makes our lives better: it raises our incomes, it creates more jobs, it means better schools and hospitals and so on. This may have been true in the past. But unfortunately it no longer holds. In the United States GDP has risen steadily over the past half century, yet median incomes have stagnated, the poverty rate has increased, and inequality has grown. The same is true on a global scale: since 1980, global GDP has grown by 380%, but the number of people living in poverty has, according to World Bank numbers of people living on $5 a day, increased by more than 1.1 billion. Why is this? Because past a certain point, GDP growth begins to produce more negative outcomes than positive ones—more “illth” than wealth, as the economist Herman Daly has put it (if “ill” is the opposite of “well,” “illth” is the opposite of “wealth”).

GDP growth might make sense on a planet with endless room and endless resources. But we don’t live on such a planet. In fact, we’re already overshooting our planet’s biocapacity by more than 50% each year. There are no longer any frontiers where accumulation doesn’t directly harm someone else, by, say, degrading the soils, polluting the water, poisoning the air, and exploiting human beings. At this point in our history, GDP growth is creating more misery than it eliminates. And the problem is not just that the growth is inequitably shared, although that it is a major issue; the problem, rather, is aggregate growth itself. In our era of climate change, even sober scientists are pointing out that growth is leading us down a path that that has widespread famine and mass displacement just around the corner.

Yes, some try to reassure us that our economy is gradually “decoupling” from material throughput, and that soon we will have growth without destruction. Butstudy after study has proven that it’s not true. In fact, global consumption of materials has nearly doubled over the past 30 years, and accelerated since 2000.

The rule of GDP growth may seem sacred, but it is not. As quickly as we created it, we can pull it apart. And pull it apart we must—it’s time for the giant stone heads to roll. There are already movements in this direction. A number of states and countries have adopted much more sensible alternatives, like the Genuine Progress Indicator, which seek to promote human and environmental well-being. There are many others we might consider, and it doesn’t much matter which we choose—indeed, each city or country could pick a different measure, or no measure at all. The important thing is that we shake off the tyranny of GDP growth and open up a creative, democratic conversation about what kind of world we want to live in.


Keep connecting dots…

Written by Alnoor Ladha and Martin Kirk, originally posted at The Rules

What do rising sea levels in Bangladesh, the break up of public utilities in Ghana and austerity in the UK have in common?

They’re all symptoms of the same disease: neoliberal capitalism.

This is not the story we’re most often told. Instead, we’re encouraged to see the many economic, political, environmental and societal crises faced by communities around the world as separate. In this story, rising food prices in Kenya, for example, have nothing to do with exploding student debt in America. But this simply isn’t true. They are both inevitable outcomes of the same neoliberal logic that says that life must ultimately serve capital, rather than the other way round.

It’s only when we connect enough dots that we can expose the deep logic and rules that govern the whole global economy. Rules like, “material growth, everywhere, at all costs”; a ridiculous idea on a planet with finite resources. And it’s only when we connect the dots that we can see that the people who have the most power in this system aren’t the most thoughtful, talented or worthy, but merely those who most effectively obey these rules.

Like all stories, the way to undermine its power is to be conscious of it. Understanding and then exposing the deep logic and rules of the global system is one of the most important political acts we can engage in. It’s the beginning of our own de-programming, and it leads us to alternative solutions to these whole-system problems. Alternatives like strong local economies that can bypass debt-based currencies, and food sovereignty approaches that challenge the monoculture model of neoliberal ‘development.’ Alternatives that are already to be found all around us; from the Brixton Pound in Britain, to the Zapatistas in Mexico, to Rojava, the Kurdish free state in northern Syria.

The mainstream media is not set up to see these shifts and so continues to push the old story of “growth at all costs”. It’s up to us to connect the dots. To expose how oppressions around the world are connected. And to recognise that something wonderful and powerful is emerging all around us, outgrowing the cruel limitations of neoliberal capitalism by embracing life in all its glorious, indescribable diversity.

Will you help us connect the dots and build the alternatives before it’s too late?

Here’s how you can help:

Watch and share our short video to keep #ConnectingDots between our global oppressions:

Keep connecting dots

Saying “everything is connected” is pretty popular these days. ‘Intersectionality’ is the latest buzzword.  ‘Systems thinking’ is the discipline du jour.  Everyone, it seems, is trying to make sense of this dawning awareness that the challenges we face do not stand alone. Climate change, for example, is not just about carbon emissions but also economics, race relations, patriarchy and power. There is no line of disconnect, except where we draw it with our minds.

Starting with How

Simply saying that everything is connected doesn’t get you very far, though. The real challenge is to understand how. When it comes to the root causes of inequality and poverty, many of the all-important hows are not only to be found in every national economy, but transcend them all.

Globalisation is a word that’s been in common use for at least thirty years. At this point, It feels old hat; the 90s version of the social justice struggle.

But that sort of easy dismissal surrenders crucial intellectual ground. It removes from view not just basic facts – e.g. global trade is the lifeblood of most national economies – but some critical realities about how the world works.

The first critical reality is that, in the most practical and important sense, there is one global economic system. There are networks of national systems within it, but they are all part of, and increasingly subservient to, a single mother-system.

This is an astonishingly important idea to get our heads around. Instead of starting with, for example, the US or Greek economies and then looking for where it links to the global system, we start with the global, look down at the US and Greek economies and start to connect dots to see how they are similar.

You don’t have to work from this perspective for long to recognise that there is a single set of rules. They may be implemented in different ways or clothed in different language, but they are as true for the US and Greece as they are for China and South Africa.

The second point is that this one system, with its single set of rules, is being governed. There are people who see its wholeness clearly and operate from that perspective. Right now, most of these people, unsurprisingly, sit in organisations that have genuine planetary reach; private corporations, international institutions like the World Bank and the World Economic Forum, and a small number of large NGOs.

This leads to the third truth, which is that the people with the most power in the global economy are those who align with its interests. Which is another way of saying that they effectively promote and implement its rules. This isn’t some conspiracy theory, merely a truth about the nature of complex adaptive systems. The top priority of any system is to survive. Once a network becomes sufficiently complex, it becomes self-organising. From that point on, it will always ‘want’ to survive. One way the global economic system does this is to draw into positions of influence those people who best serve that purpose. A capitalist system, whose Prime Directive is the production of capital, will work constantly to refine and improve its ability to do just that. It will continue until it is stopped by an external force of some kind, or it collapses under its own weight.

Connecting these dots leads us to one very important realisation: even the most powerful people in the world have no choice but to obey the rules as long as they want to be rewarded by the system, with more power or wealth. In other words, unless a politically significant mass of people actively choose otherwise, the rules of the system will govern us, not the other way round.

The system itself will not see human suffering as an imperative to change its rules as long as those rules serve its immediate survival. It has no inherent predictive capacity. It is self-organising but not independently sentient. It can no more ‘feel’ human suffering than it can foresee its own destruction at the hands of climate change. Only us humans, with our predictive capacities, can do that. If the rules are to be changed, we cannot expect the system to auto-correct. We must change them manually.

Growth as Given

There are few rules of the single global economy more fundamental than growth. The mantra that “growth is good” has been repeated so often that it has the feel of common sense. It is almost impossible to think of how economies might work, let alone how inequality and poverty might be reduced, if we aren’t growing the amount of capital there is in the world through ever-increasing production and consumption.

This logic pervades all international debates and plans. Take, for example, the recent “Sustainable Development Goals” (SDGs). They rest on the fundamental assumption that every country, every company, even every human being, must grow their material wealth over time, as a precondition to anything else. This is measured in GDP for countries, and profit for businesses. In other words, they obey the rule that the global economy must grow continually through the perpetual growth of all of its parts.

But what if there is a fatal flaw in this logic? What if this rule is not fit for the purpose of guiding us into the future? What if, instead of being a panacea for all that is good, it is a driver of so much that is bad?

The evidence is clear. Totalitarian growth of all parts of the system has not only led to destabilising the climate by making sure consumption is always increasing, everywhere, but has also created vast amounts of poverty and inequality. This might sound counter-intuitive at first glance – doesn’t more money mean less poverty? But consider this: since 1990, global GDP has increased 271%, and yet both the number of people living on less than $5 a day, and the number of people going hungry has also increased, by 10% and 9% 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.

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. The imperative for every part of the system to constantly grow its material wealth 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 prioritize 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.

It is only by connecting dots that we start to be able to see the true shape of the challenges we face. We all face. Whatever our issue-focus, there are underlying rules and norms that affect every facet of human life. Growth is just one.

At first glance, connecting dots in this way might make the job of radical change feel more difficult. We struggle hard enough to affect change locally, let alone nationally, let alone globally. But something liberating and empowering happens when you start to connect the dots to see what’s going wrong; the same process also allows you to connect the dots between the struggles for making things better. We start to see that what’s driving the destruction of the rainforest in Indonesia is the same basic set of rules that are causing rising food prices in Kenya, and the explosion of student debt in America. We become connected, in very real and actionable ways, by a realization that we are all being screwed by the same basic set of rules.

Most importantly, we start to see new and different solutions. Ideas that previously seemed to only mitigate one problem can start to be seen to mitigate all.

For example, strong local economies with independent currencies and food sovereignty challenge the monoculture model of ‘development’. Gift economies that deny the commodification of life disrupt the system’s rules by their very existence. As we contract new types of relationships, with each other, with our communities, with Nature itself, we will usher in new types of social relations based on a vast range of diverse and mutually-supporting solutions that will render the old paradigm, with its slavish adherence to ideas like perpetual growth, wholly obsolete.

These new models and experiments are already taking place all around us. From the Brixton Pound in Britain, to the Zapatistas in Mexico, to Rojava, the Kurdish free state in northern Syria; a new breed of post-capitalist thinking is taking hold and spreading through networks of conscious citizens. However, the mainstream media is not set up to see these shifts. They are pushing the old story of growth, lifting boats, charity and ‘financial access’. And in their blindness lies our opportunity. The antidote lies in our ability to see how the old system is connected, while recognising the patterns in the diversity and wellspring of wonder and power that is filling the void of the crumbling edifice of growth-based capitalism. The question is, will we connect the dots before it’s too late?