Economic growth; lie number two…

How do we know that we are in recessiondouble dip or triple dip as it may be? What mysterious yardsticks are used in the Bank of England to make them reach for the strings on which we all dangle?


Above all, it is this one; Economic Growth.

Economic growth usually refers to the growth in value of GDP (gross domestic product).

The total output of the country – the value of all the food produced, all the pharmaceuticals manufactured, cars assembled and services rendered – forms GDP.

GDP also takes into account the effect of imports and foreign investment.

If GDP is bigger this year than last year, then the UK is experiencing ‘economic growth’.

But inflation will also have driven up prices since last year, and thus GDP. To assess whether the economy is actually growing, the rate of inflation has to be subtracted from the nominal rate of growth to get the real rate of growth.

Lets be clear about this- economic growth happens when the overall value of what have, what we make, what we own, gets bigger. Our system is set up to be always dissatisfied with what we have, with what we are. No growth is regarded as stagnation, shrinking is recession, and recession is to be avoided at all costs- particularly at the cost of those who have the least.

We can only have economic growth if we continue living the kind of lifestyles that we are living now- if we continue spending money on the next gadget, another car, the latest trend in exotic food, the newest cut of skirt and suit. We can only have economic growth if we exhibit enough collective desire for new bathrooms, conservatories, paved driveways.

Increasingly we can only have economic growth if we can persuade other people to be just like us– to want the things that we want, the food that we eat, the mobile phones that we have glued to our ears. And so was born the globalisation of markets; the ubiquitousness of product. The penetration of our ways of being into every far corner of the earth.

Is this a problem?

Well, perhaps we need to distinguish between different periods of economic growth. In the UK we went from being an agrarian economy, whose countryside could only support a certain population number to being a place of canals, coal mines, factories and population explosion- all in the space of around 100 years. During this time our economy was growing exponentially- rather like that of China now. Victorian Britain was a place of huge inequality and the accumulation of vast wealth by the few on the backs of the labour of many. Like China now.

Of course to achieve this continued economic growth, Britain also needed an export market and control of sources of cheap natural resources-  for this we colonised and enslaved half the world.

More recently our economic growth has slowed- we achieve figures of one, two, three percent, and call it success. This ‘success’ is nothing to do with society changing, but everything to do with a desire to stay the same. Our growth is conditional on the pursuit of technological innovation by those who would sell us more product- rendering those we already have as obsolete.

Economists have a word for our willingness to spend- to slap down the cash rather than salting it away- they call it confidence. A healthy economy is full of confident consumers. Or, as Wikipedia put it;

Schumpeterian growth is an economic theory named after the 20th century Austrian economist Joseph Schumpeter. Unlike other economic growth theories, his approach explains growth by innovation as a process of creative destruction, which captures the dual nature of technological progress: in terms of creation, entrepreneurs introduce new products or processes in the hope that they will enjoy temporary monopoly-like profits as they capture markets. In doing so, they make old technologies or products obsolete: this is the destruction[disambiguation needed] referred to by Schumpeter, that could also be referred to as the annulment of previous technologies which makes them obsolete, and “which destroys the rents generated by previous innovations” (Aghion 855).


Now, back to the LIE that are at the centre of all this. We are told that for our economy, even our society, to survive and prosper, we have to have sustained economic growth. The spectre of the Great Depression hangs over us- lives ruined, people starving in the streets. Economic growth is a holy cow that we have to keep feeding.

Everywhere we hear people asking questions of this cow however;

  • Is it sustainable? Can we really just keep producing more and more? Are we not burning up our resources at an alarming rate? Are we not slowly poisoning our planet with it all?
  • Is it fair? Can we really continue to live in a world where our lifestyles are dependent on the raw materials and cheap labour of others who are half way across the world?
  • Is it working? Given the instability in the system, can we really trust it to maintain our lifestyles? Is it not all just coming unraveled anyway?
  • Is it not just terribly wasteful? Do we really need all this stuff? Is there not a simpler way to live?
  • Is it making us happy, fulfilled, complete?

The relationships between economic growth and equality within society is one that has been the cause of much argument- think about the Marxist analysis, or of recent arguments that suggest that stable economic growth always leads to greater equality.

The argument has taken a new turn recently however- this from here;

Labour is drawing on research by the New Democrat Network (NDN) central to the Obama re-election campaign to shape its own election thinking.

The research was described by the Obama campaign as its North Star. It tracked three trends in the US economy between 1992 and 2009, showing how two – higher growth and higher productivity – had not been matched by a rise in living standards for the majority…

Douglas Alexander, the shadow foreign secretary and a close student of US politics, told the Guardian: “Back in 1992 the famous dictum of Bill Clinton’s adviser James Carville was: ‘It’s the economy, stupid.’ It contained the implicit assumption that economic growth ensured rising living standards.

“Today that no longer can be taken for granted, as this important research by NDN and the Resolution Foundation shows. I’ve worked closely with the NDN in recent years and that collaboration confirms to me this is one of the defining challenges for today’s progressives on both sides of the Atlantic.”

Similarly, work in Britain maps how growth before 2008 did not guarantee a rise in living standards, and how the bottom half of society suffered. UK wage stagnation is more recent than in the US – theirs started in the 1970s, the UK’s in the early 2000s.

And that is just within our own society. No mention of this sort of thing;


So, what is the alternative? Can our society, our economy, really kick our addiction to economic growth as the primary measure of our worth?

What might replace it?

Can commerce ever be based on a fair exchange of skills based on need (although surely there is always room too for celebration, for art, for pleasure.)

Can we learn to live in ways that are sustainable- that only cost the earth what it can afford to give to us?

If the answer to these questions are ‘yes’ (and I deeply hope that they are) then might these not result in negative economic growth?

Because in the Kingdom that Jesus talked about, things often get turned upside down and inside out- the last become first and the least of these become the keys to the Kingdom.

The Kingdom of God is not interested in statistics, in abstract measurement- it is rooted in the here and now- the shit and blood and spit of being ME, and my individual relationship with you. Everything else just gets in the way.

Measuring the well being of society…

Interesting discussion at the end of the ‘T0day Programme’ on Radio 4 this morning about how we might measure the progress and value added to members of society. You can listen to the clip here.

It describes how Nobel prize winning economist Joseph Stiglitz has been asked to report to French President Sarkozy- and has pointed in the direction of sustainability and well being (happiness.)

joseph stiglitz

In the wake of the collapse of economic systems around the world, this is a common theme- old macro economic measures like Gross Domestic Product seem to have let us down. Measuring our prosperity and ability to acquire goods and services does not give us a reliable way to measure the worth of society- or the degree to which those of us within it live satisfied and fulfilled lives.

I think that we people of faith are called to be fully aware that this life we are given is precious, and to celebrate all that is good and beautiful within it. We Christians live as disciples of Jesus, whose had a whole different set of priorities…

We live in a time when something vital about the human experience has been somehow distanced from us by an empire whose culture (and very economic survival) is driven by a chasing after STUFF- ever more and more stuff to fill in the void.

We are none of us immune form the powers of the empire we live within. I just bought a new camera. It is a posh SLR that will take images that are much sharper, much richer. But I have a camera already that takes a lot of the photos on this blog. Cameras are TOOLS, and to have a better tool is no crime. But will it make me happier- or life deeper and more meaningful? Of course not. But the empire- this would try to convince me otherwise- and for a while, I even believe that it will too.

The radio 4 piece makes a point about happiness- which has been a theme on this blog before (See here for example.) My day job as a mental health manager brings me constantly into contact with issues of happiness and mental wellbeing. We are in the middle of planning a redesigned mental health service for Argyll, and one of the key government documents we relate to is this one- ‘Towards a mentally flourishing Scotland.‘ It makes interesting reading from a spiritual point of view- digging into how we might create opportunities for people to find satisfaction and build community as a prescription for health- both mental and physical.

I am just reading this book- Rob Bell’s ‘Jesus wants to save Christians.’

jesus wants to save christians

The book is a journey through the Bible, retelling the story of our human journey. Bell talks about the earliest stories from Genesis- the first family of Adam, Eve and their children Cain and Abel. And of how Cain and Abel argue over land and the acquisition of STUFF- marking the descent of humanity from simple subsistence towards more complex economic systems based around the possession of land, and the means to produce more than what is immediately needed in order to sell and barter for other goods.

You could say that this was the rise of humanity, and also potentially the seed of our destruction.

We moved from dependence and vulnerability- to independence and risk aversion.

We moved from community- to individualism and self reliance.

We moved from the need to follow the seasons and live within the natural environment- to the need for central heating, air conditioning, and ever more energy to sustain it.

We moved from a nomadic existence – to being anchored below the weight of what we own.

We moved from a need for God- to the need to manage God to make him fit the lives we now follow.

Could this be the prescription for fulfillment and happiness?




Connection to the earth that made us.

Living simply as pilgrims.

Living spiritually, in search of God.

What might society be like then?