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.

How to feel good about poverty…

It’s been a mad month as I’ve started working with www.therules.org, which, as you can imagine, is a dream come true.

We’ve just launched a campaign based on the idea that #PovertyIsCreated in advance world leaders coming together in New York later this month to formally sign the United Nation’s Sustainable Development Goals (SDGs).

The SDGs will be met with fanfare: celebrity endorsements, photo ops and a general air of celebration. These goals will set the international development agenda for the next 15 years and will affect the lives of millions of people, but what they are proposing is business as usual – grow the global economy and wealth will trickle down to the poorest. We know this won’t work, because between 1990 and 2010 global GDP increased by 217%, but the number of people living in hunger and poverty has actually increased.

The UN has lots of answers for reducing poverty, but it’s not asking the right questions. The UN’s Millennium Development Goals set in 2000 have grown economies, but left 60% of the world’s population living in poverty and contributed to the continued destruction of the planet.

How can we sustain growth when we’d need 4.1 earths for everyone to live like an American? And if growth works, why does all the money end up in the hands of the few? – Even now the 85 richest people in the world have the same amount of money as the poorest three billion and 18 times more money flows out of the global south every year than trickles into it.

We need to start asking the BIG QUESTIONS about poverty, because if we can expose its root causes we can get real answers about how to eradicate it and change the rules for a world that works for all.

With the UN and the SDGs under the media spotlight for the next month, we have a unique opportunity to tell the true story of poverty and how #PovertyIsCreated with videos, articles, tweets and other messages. This is the first step to steering the conversation towards solutions that can truly alter the system to stop creating poverty and change the rules for a world that works for all. We need to make sure our message reaches as far as possible.

Please watch and share our short video to find out the big questions we need answers on, and soon.

Capitalism #ADifferentStory

You’ll know from previous posts that I don’t believe that ‘we can solve global poverty if rich countries give aid to poor countries’. This new campaign and video from The Rules questions that rhetoric too and recognises that, in the current system, “rich countries are rich because they grab land and natural resources and exploit the human labour of poor countries”. It calls for us to tell #ADifferentStory to capitalism, and, like me, believes that we can change things. It’s really worth a watch.

Here’s their intro to the video:

How many of us have a sneaking suspicion that something pretty fundamental is going wrong in the world? We keep hearing about the potentially devastating consequences of climate change but we are pumping more carbon dioxide into the atmosphere every single year. We are forced into economic crisis after economic crisis and the only people who aren’t brought to their knees are those that cause it. In fact, they often just get richer and more powerful while the rest of us work harder and harder for less reward. Politicians all say the same basic thing. No one, it seems, is offering anything that is really different. The whole operating system is somehow wrong, but also somehow inevitable. Nothing can really be changed because this is just how things are.

At least, that’s what we’re told, and how it can feel. But this way of living – our system of modern capitalism – is just a story.  And this story is not the only one there is.  It’s not inherent within us.  It was invented by human beings, and so human beings can change it.

But in order to get there, we first have to face up to some difficult truths.

You can find out more about The Rules and their campaign on their website.

Let me know what you think. What story would you tell?

Video

The Rules….

Might just happen to be my new favourite thing!

I am in the process of finding out more about getting involved with some of their amazing campaigns, but check them out!

http://www.therules.org/en

“Our world has never been more connected or more prosperous than it is today. Yet right now, one in every three of us alive today does not have access to the most basic needs for a decent life – food, education, medical care, a safe environment.

The good news is that for the first time, ordinary citizens like you and I have the power and ability to change the rules that are creating these injustices. Technology and the shift of global power mean that we can now demand our say in decisions that have traditionally been made by elites behind closed doors. But the truth is, these things will only change if we demand it.

That’s why we invite you to join /The Rules. If we work together, the voices of the world’s majority are too loud to be silenced. Change the rules, and we change the world.”