Gross Domestic Product Introduction

On Economic Growth As A Concept.

I just read the text “Economic growth: a short history of a controversial idea” by Gareth Dale — and thought that some of its points merit mentioning here, as they relate to the core issue of our film project: the unhealthy obsession of most governments with GDP Growth, and how to end it.

Dale’s text is all about where this idea came from, originally.

The first key point he is making is rejecting Elias Canetti’s “will to grow”, which posits that the desire to (economically) “grow” — in other words, to accumulate “more” — is a human quality that sits inside our DNA. From wanting your child to grow, to wanting your power to grow, to wanting your riches to grow, to wanting your farm to grow, this is just how we are made, we always want more.

But Dale disagrees and says that Canetti is throwing things together that don’t belong together:

Canetti’s ‘will to grow’ doesn’t withstand scrutiny. The diverse behaviours he describes can’t be reduced to a single logic. The ‘will’ behind creating babies is quite unlike the will to accumulate acreage or gold. And the latter is relatively recent. For much of the human story, societies were nomadic or semi-nomadic, and organised in immediate-return systems. Stashes of food were set aside to tide the group over for days or weeks, but long-term storage was impractical. The accumulation of possessions would hamper mobility. The measures that such societies used to reduce the risks of scarcity centred not on accumulating stores of goods but on knowledge of the environment, and interpersonal relationships (borrowing, sharing, and so on).

The next crucial point he is making is about data. It was only possible for humans to “want more” once they were able to properly count what they had. In other words, the development of statistical tools plays a key role for instilling this idea that we could “have more tomorrow” than we have today. This links directly to the discussion we experienced at the OECD Forum in South Korea, about new measurements and their political implications. Dale writes:

The same centuries experienced a revolution in statistics. In the England of 1600, the growth paradigm could scarcely have existed. No one knew the nation’s income, or even its territory or population. By 1700 all these had been calculated, at least in some rough measure, and as new data arrived England’s ‘material progress’ could be charted. Simultaneously, the usage of ‘growth’ had extended from the natural and concrete toward abstract phenomena: the growth of England’s colonies in Virginia and Barbados, the ‘growth of trade,’ and suchlike.

And as the advancement of science and the development of colonialism went hand in hand, the colonialists had a whole host of new quantitative questions to answer:

How profitable is this tract of land, and its denizens? How can they be made more profitable? Answering such questions was enabled by modern accounting techniques, with their sharper definition of such abstractions as profit and capital.

In other word, “growth of the economy” needed a lot of inventions before it could even be thought. And the idea was heavily based on thinking that originated from the development of colonialism. In the new colonies, it seemed even more important than anywhere else to count and “grow” the new properties that were being accumulated.

And what was the result of all that? A very simple story about how people evolved from barbarism to civilisation. Barbarism was the lifestyles of the people that colonialists found wherever their greed took them, civilisation was the way of living and counting and robbing and thinking in property terms that the colonialists brought. Since the invading nations were the “more advanced ones”, that gave them “the right” to control and harrass the others. And economic growth was always part of the story:

Through its marriage to progress and development, in the belief that social advance requires a steady upward ratchet in national income, growth gained its ideological heft.

And this takes us into the twentieth century. The idea of economic growth turned into a global competition and race, for power, influence and promises to the electorate. And in the fight between the political systems of the Cold War, it became the tool for everything:

Growth was firmly established everywhere: in the state-capitalist economies of the ‘Second World,’ the market economies of the West, and the postcolonial world too. It became part of the economic-cultural furniture, and played a decisive part in binding ‘civil society’ into capitalist hegemonic structures — with social democratic parties and trade unions crucial binding agents. It came to be seen as the key metric of national progress and as a magic wand to achieve all sorts of goals: to abolish the danger of returning to depression, to sweeten class antagonisms, to reduce the gap between ‘developed’ and ‘developing’ countries, to carve a path to international recognition, and so on.

And then to me, the most interesting conclusion can be found in the penultimate paragraph:

Growth, although the result of social relations among people, assumes the veneer of objective necessity. The growth paradigm elides the exploitative process of accumulation, portraying it instead as a process in the general interest.

It’s actually an incredible sleight of hand: The accumulation of wealth is redefined as the primary public interest. We are lead to believe that as long as a massive accumulation of capital happens, somehow everyone will be better off. Even though it’s overwhelmingly a narrow group of people benefiting from this type of accumulation. Because ever since the TINA years, so much taxation has been dismantled, bit by bit.

Not too long ago, this whole idea was also referred to as the “Trickle-Down-Effect” — an effect that doesn’t actually work in the real world. Just because the rich get richer doesn’t mean the rest are better off. Quite the contrary. Unless we rethink the way we distribute access to capital and resources: Wellbeing Economies.