The growth paradigm: a critique

Issue: 134
Posted: 27 March 12

Gareth Dale

In respect of climate change, the hurricane that tore into New York was the game changer. The floods it unleashed forced the authorities to organise a mass airlift evacuation of much of the city’s population, and to begin planning the relocation of the city’s stock exchange to a less vulnerable site. Beleaguered and suffering, New Yorkers could be forgiven for ignoring the climate change related disasters that were unfolding elsewhere during that same dreadful October, of which the catastrophic flooding in China was surely the worst. The evidence had been mounting for decades, and the causal connection between man-made climate change and “natural” disasters, not to mention declining agricultural yields, desertification and resource wars, could no longer be ignored. As the president said, in an address from the White House:

Truth be told, the problem has been our whole attitude about globalisation. When I say “our”, I really mean in this context the elite… We have all been focused on boosting or maintaining greater economic growth… But we have not prepared sufficiently for the toll that irresponsible growth is having on the environment… We all assume technology will come to the rescue, but so far we have not found the silver bullet and carbon emissions continue to climb.

This imagined presidential address forms part of a document prepared by the United States National Intelligence Council (NIC) in 2008.1 The document sketches various scenarios for the year 2020, including the one just discussed, “October Surprise”. The “surprise” ostensibly refers to an onrush of climate-related disasters in 2020 and to the dramatic shift in consciousness that they catalyse. But arguably the true surprise is that US national security wonks in 2008 were prepared to speculate that growth boosterism on the part of the US elite is endangering the planet’s climate stability. What the report fails to do is ask why the US elite is glued to “growth”. It alludes to a “’growth-first’ mentality”, but that begs more questions than it answers.

The NIC’s account is based upon an understanding that climate change may occur rapidly, thrusting the world “into a new level of vulnerability”. If human activity has been contributing to low-level warming for thousands of years, in the last century this has accelerated. The dumping of greenhouse gases into the atmosphere is causing an inexorable upward drift in average global temperatures. Scientists, the NIC report continues, are “uncertain whether we already have hit a tipping point at which climate change has accelerated” and most of them “believe we will not know whether we have hit a tipping point until it is too late”. Tipping points refer to the danger of climate change crossing thresholds after which positive feedback mechanisms kick in and cannot be reversed. These include the melting of polar and glacial ice; the evaporation of the methane that is locked in tundra permafrost or as hydrates/clathrates under sea beds; the desiccation of soils; the growing severity of forest fires; and the warming of the oceans, which reduces their ability to absorb CO2 and adversely affects phytoplankton (which accounts for roughly half of all photosynthesis on Earth). If triggered, these positive feedbacks would push the climate towards rapid and inexorable change: “runaway warming”. A rise of 2°C above pre-industrial levels is a near-certainty. According to papers published by the Royal Society, if present trends continue a rise of 4°C is a real possibility as early as the 2060s, with huge impacts, mostly negative, on water availability, crop yields, etc.2

Runaway warming has occurred in the past. One example was the “end Permian event” 251 million years ago, which saw the average global temperature rise by at least 6°C, leading to the extermination of over 90 percent of species. Biodiversity does not bounce back after mass extinctions. After the Permian-Triassic extinction 50 million years passed before the diversity of life had fully recovered. A more serious event occurred on our nearest neighbour, Venus. At one time the surface of Venus contained a large volume of water. But it evaporated, in a runaway warming process that caused the carbon in the planet’s crust to be “baked out” into the atmosphere, ultimately generating an atmosphere thick with CO2 and an average surface temperature of over 450°C.3 A not dissimilar fate, NASA scientist Jim Hansen cautions, will befall our own planet if we burn most of its remaining fossil fuel reserves (including much of the “unconventional” kind, such as tar sands).4 Homo sapiens is in many respects a successful species, but sustained success for any species requires a hospitable environment. As Nikolai Bukharin warned, “No system can exist in empty space; it is surrounded by an ‘environment’, on which all its conditions ultimately depend. If human society is not adapted to its environment, it is not meant for this world; all its culture will inevitably pass away; society itself will be reduced to dust”.5

One hopes that Venusian dust is not our destiny, but even the trajectory that we are already on is troubling. The much-publicised predictions of the Intergovernmental Panel on Climate Change (IPCC) are grim enough, but tend to be underestimates. On emissions of greenhouse gases, even the worst case scenario for 2010 that the IPCC had projected only three years previously was exceeded—despite the global recession of that year.6 Similar applies to the rate of ice loss in Greenland. There and in Antarctica ice sheets are disintegrating. The oceans, meanwhile, are absorbing over 20 times the normal volume of CO2, producing rapid acidification. We are witnessing increasingly frequent extreme weather events, decreasing yields of a number of crops, and problems associated with rising sea levels, such as salt contamination of arable land. Human-caused environmental degradation is causing the loss of species at a rate that far outpaces any epoch since the last Great Extinction, which obliterated the dinosaurs. Already by 2100 it is likely that one in ten of the world’s species will no longer be with us.7 If the average temperature rises by 6°C, between 50 and 90 percent of species will die out, as they fail to adapt in step with the changing climate.8

If the global growth rate projected by the World Bank continues unabated world gross domestic product (GDP) will have risen almost tenfold by 2100 and catastrophe is all but assured for humankind and the planet.9 In such a scenario, even if swingeing reductions in emissions intensity (measured as greenhouse gas emissions per dollar of GDP) were implemented, CO2 emissions would be roughly three times higher than at present. By way of comparison: even with an average annual fall in emissions intensity of 1.1 percent in 1999-2009, CO2 emissions from the burning of fossil fuels rose at an average annual rate of 2.4 percent (with global GDP growth averaging 3.5 percent).

At the same time, regions of the world that have experienced low or negative growth have seen appalling suffering. Worldwide, in the 15 years that followed the end of the Cold War some 270 million individuals died prematurely from poverty-related causes. This is larger than the death toll from all the wars, civil wars, genocides and other government repressions of the entire 20th century combined.10 Many of these premature deaths occurred in Sub-Saharan Africa, where per capita incomes fell by 25 percent between 1987 and 2000, according to World Bank figures.11 But OECD countries, too, are afflicted by high levels of unemployment, poverty, hunger and homelessness. In Poland, for example, one in three people suffer “serious material deprivation” and two in three cannot afford an annual holiday away from home.12 These statistics, and the human experiences that they summarise, worsen during economic crisis. As sales decline, capitalists throttle their investment, growth slows and tax revenues fall, prompting governments to cut spending; incomes fall and a vicious circle of contraction ensues. The current crisis serves as a reminder of the indecent consequences of zero or negative growth in a capitalist framework.

Humankind appears to be “in a box”, to borrow Thomas Homer-Dixon’s phrase.

For the 2.7 billion people now living on less than $2 a day, economic growth is essential to satisfying the most basic requirements of human dignity. And in wealthier societies, people need growth to pay off their debts. To sustain this growth they must expend vast amounts of energy. Yet our best energy source—fossil fuel—is the main thing contributing to climate change, and climate change, if unchecked, will halt growth. We can’t live with growth, and we can’t live without it. This contradiction is humankind’s biggest challenge, but as long as conventional wisdom holds that growth can continue forever, it’s a challenge we can’t possibly address.13

In this article I look inside the box, by way of an inquiry into the evolution of that “conventional wisdom”, the growth paradigm.

Origins of the growth paradigm

The growth paradigm, as I use the term, refers to the proposition that economic growth is good, imperative, essentially limitless, and the principal remedy for a litany of social problems. The growth paradigm appears ubiquitous, even natural, but it is uniquely modern. Ancient civilisations such as Mesopotamia or Rome knew commitments to certain types of “growth”. Monarchs expanded their territory and riches, and scholars penned proposals for improving the organisation of agriculture or trade. But even where commercial activity flourished, as in the city-states of Classical Greece, the pursuit of profit for its own sake was regarded as a threat to social order. The god of commerce, Hermes, doubled as the god of theft.

For millennia no sense of “an economy” as something separate from the totality of social relations existed, nor was there a compulsion to growth. “Do we never find in antiquity an inquiry into which form of landed property, etc is the most productive, creates the greatest wealth?” asked Marx rhetorically. Although Cato may have investigated the most productive methods of cultivation and Brutus may have lent his money at the optimum rate of interest, the guiding philosophy was “which mode of property creates the best citizens”.14 The ancients, he wrote elsewhere, “never thought of transforming the surplus-product into capital. Or at least only to a very limited extent.” They used much of it for unproductive expenditure on art, religious works and public works. Still less was
production directed to the development of the productive forces: division of labour, technology, the application of science to production.15

In the pre-capitalist world economic growth was seldom considered a subject of study. A signal exception was the Arabian scholar Ibn Khaldun, whose Prolegomena to his history of the world does provide an analytical description of growth:

When civilisation [population] increases, the available labour again increases. In turn, luxury increases in correspondence with the increasing profit, and the customs and needs of luxury increase. Crafts are created to obtain luxury products. The value realised from them increases, and, as a result, profits are again multiplied in the town. Production thrives even more than before. And so it goes with the second and third increase.16

Therefore, he continues, people’s wealth “increases and their riches grow”.17 Yet if Khaldun’s work is exceptional it also proves the rule. Nowhere in his narrative is the notion of linear economic progress to be found.18 His is strictly a cyclical theory. It centres upon the rise and fall in the fighting spirit of nomad conquerors, but with a political-economic correlate: population and trade growth combine with benevolent rule and low taxation to generate an upward growth curve, following which, after two generations, the dynasty approaches its natural endpoint. “At that time, civilisation has reached the limit of its abundance and growth”.19

In medieval Europe, too, economic interests were generally held to be subordinate to the “real business of life, which was salvation”, and economic activity was but one “aspect of personal conduct upon which, as on other parts of it, the rules of morality are binding”.20 Labour was valued and commercial trade was seen as necessary (albeit potentially “perilous to the soul”), but finance was considered sordid, if not immoral.21 But in mid-second millennium Europe the picture began to change. The reliance of feudal elites upon funds supplied by the “third estate” of merchants and bankers increased, just as Protestantism’s doctrine of “the progressive sanctification of the individual by means of moral improvement” was nourishing a climate “of individualistic religiosity and self-improvement that was congruent with [the emerging] secular values” of material success and money making.22 In the 16th and 17th centuries England witnessed the pursuit of “improvement”, while acquisitiveness—hitherto suffered as an inevitable but regrettable vice—gained respectability. The ideas that accumulation is natural, and that pecuniary gain should not be blocked by legislation, took root.23

In 16th and 17th century Western Europe mercantilism was at its zenith. The concern of mercantilists was not growth in production for use but the increase in products for sale. When trade flourishes, as the English mercantilist Edward Misselden put it, “the income to the crown is augmented, lands and rents are improved, navigation increases and the poor people find work. If trade declines, all these decline with it”.24 The expansion of exports became a state-supported imperative, and the thirst for money, on the part of monarchs, gentry and burghers, became a secular religion. Nevertheless, mercantilists were not under the spell of the growth paradigm. Their principal goal was not economic growth per se but the enrichment of the state. They conceived of wealth essentially in zero-sum distributional terms, not in respect of its creation. Acquisition was what mattered, not production or consumption. For the French mercantilist Antoine de Montchrétien, for example, the assumption was that god had provided plenty, in the shape of nature, people and their aptitude for work.25 Although good government was necessary to marshal and husband these productive resources, and the expansion of trade was to be encouraged, this did not amount to the modern growth imperative.

With increasing commodification, quantification—reducing everything to numbers—became an increasingly salient feature of capitalist society. In parallel with the expansion of markets and the legitimation of acquisitive behaviour ideas of time and space underwent a revolutionary change. In the pre-capitalist world time and space were bound into the individual’s location in the natural and social landscape. Most economic activity—agrarian labour—followed daily and seasonal solar cycles, and work was barely distinguished from non-work. In the 17th and 18th centuries these traditional ways of seeing began to dissolve. The mechanical clock universalised time. No longer hooked to the locally-experienced rhythms of the sun and seasons, time came to be measured in fixed ticks, which could be synchronised across the world, turning the individual’s apprehension of time into part of a standardised global experience. Time began to appear as an abstract continuum: uniform, linear and measurable. But the diffusion of the mechanical clock, as Moishe Postone has argued, must itself be understood “with reference to a sociocultural process” that it, in turn, reinforced.26 Postone is referring to the discovery and reification of productivity, for it requires labour that can be “disciplined and coordinated in a regularised fashion”.27 The objectification of time accompanied the segregation of work from the rest of human experience, such that the labour demanded of workers could be imposed and measured.28 In this respect, the conception of time as quantifiable and abstract originated alongside the spread of “the commodity-determined form of social relations”.29 In capitalism, as István Mészáros puts the point, “everything becomes profitably commensurable and manageable for a determinate period of time”; capital “subsumes everything, including living human labour, under abstract quantitative determinations”.30

Self-sustaining growth and “National Prosperity”

The next step change in the growth paradigm occurred in Georgian Britain, where the rise of capitalism was generating multiple transformations. The industrial revolution dramatically raised labour productivity—along with the rate of use of fossil energy and other natural resources. Simultaneously with the promise of material abundance that industrialisation heralded, the expansion of trade combined with the loosening of the pre-capitalist status order in 18th century Britain—particularly London—to spark a revolution in consumption, and what Nicholas Xenos calls “the invention of scarcity”.31 The spread of market relations and the destabilisation of traditional social arrangements injected fluidity into the status order, bringing about a partial separation of “birth” and “wealth”. Whereas previously an individual’s position in the status hierarchy was ascribed, it now became more adjustable and more dependent upon consumption. The lives of upper and middle class citizens of towns such as London came to revolve around “high-volume standardised consumption driven by the social imperatives of fashion”.32 Marketing developed, aimed at stimulating desires for new goods and experiences. According to Xenos, the new social landscape of fashion-driven competitive consumption, together with the availability of new luxuries and exotic products, and advanced marketing methods, gave birth to an ideological earthquake: scarcity came to be regarded as fundamental to the human condition.33 And although neglected in his account, the same period witnessed a sea change from a world of custom and common land to one based on absolute private property. In the countryside ordinary people were being “literally excluded by fences enclosing the common lands that had sustained them for centuries”.34 They were living the new scarcity that was being produced around them.

Linked to the flourishing of competitive consumption was a redefinition of human needs and desire. Against older traditions that associated luxury with excess and greed, writers such as David Hume and Adam Smith reconceived need and desire as “conceptually indistinguishable”, deeming it impossible “to separate, morally or conceptually, needs and luxuries”. 35 Needs were no longer regarded as natural, but as historical, and hence potentially insatiable. Desire was seen to stimulate demand, and in turn trade and the creation of wealth, further exciting the proliferation of desires. In parallel with this virtuous circle ran another, more potent one, according to which trade encourages the development of the division of labour, enabling specialisation that yields productivity gains and market expansion. This was the engine of self-sustaining growth that Smith theorised in his Wealth of Nations, the first major treatise that took economic growth as its subject.

For Smith, economic growth is self-reinforcing, and it is good. In this, he was followed by David Ricardo and by Thomas Malthus. Ricardo, in Marx’s words, championed bourgeois production insofar as it signified “the most unrestricted development of the social productive forces, unconcerned for the fate of those who participate in production, be they capitalists or workers”. Malthus, by contrast, championed the consuming rich while denigrating the producing poor. His view of working people placed extraordinary emphasis upon their supposed indolence and none whatsoever on their productivity or creativity. He wished to see “the freest possible development of capitalist production, however only insofar as the condition of this development is the poverty of its main basis, the working classes”.36

Malthus’s theses on working class indolence and the inevitability of poverty were challenged by Robert Owen among others. Owen was the first thinker to combine “growth optimism” with a critique of capitalism and the principle of individual gain. Growth, he noted, had accelerated rapidly, due to the introduction of machines. But whereas other utopian socialists embraced large-scale industrial expansion as promising the “unlimited unfolding of the productive forces of human labour”, for him machinery was a mixed blessing: while augmenting human productive powers it also stimulated production to grow more rapidly than the revenues with which the new goods could be purchased.37 The markets of the world, he believed, “are created solely by the remuneration allowed for the industry of the working classes, and those markets are more or less extended and profitable in proportion as these classes are well or ill remunerated for their labour”. However, the existing arrangements of society “will not permit the labourer to be remunerated for his industry”. In consequence, Owen concluded, “all markets fail”.38

Smith, Malthus and Owen were writing at a time when rapid economic growth was beginning to become the historical norm, and for the new discipline of political economy, growth was a core concern. Already in 1824, less than half a century after the appearance of The Wealth of Nations, the Irish socialist William Thompson identified “the indefinite increase of the accumulations of wealth” as the “grand object of political economy”.39 Thompson took Smith, Ricardo and their followers to task for their fixation upon growth. Their “sole object” was to bring about social arrangements such that:

the machines, whether living, as cows, men, or horses…or inanimate and propelled by steam or water, should produce in the greatest abundance all articles of food, clothing, shelter, and elegance; and that, on the other hand, means should be devised that an abundance of consumers should be found to use the articles produced, so that every year a continual demand should be kept up for these or similar articles. By what means or by whom the articles were produced, whether by camels, horses, men, slaves or not slaves, whether by hard labour or easy labour, by healthful or life-consuming exertion, signified not… The problem with [the political economists] has been how to raise the greatest produce and to ensure the greatest consumption or efficient demand. No considerations but such as related immediately to wealth or exchangeable value were admitted into the reasonings of these severe economists.40

Thompson did deem indefinite growth as potentially worth pursuing but only if the qualitative needs of producers and consumers were first established as society’s central concern, and a precondition of that was social equality: “It is not the mere possession of wealth, but the right distribution of it, that is important to a community”.41

By the mid-19th century criticisms of political economy for its neglect of the problem of the distribution of wealth were part of the cultural furniture. For example, consider this passage from Charles Dickens’s Hard Times, in which Sissy Jupe, who had been taken in by the Gradgrind family, reports to Louisa Gradgrind on one of her many mistakes in the classroom of Mr M’Choakumchild. This particular error concerns the question of “National Prosperity”:

...”And he said, ‘Now this schoolroom is a nation. And in this nation, there are 50 millions of money. Isn’t this a prosperous nation? Girl number 20 [Sissy Jupe], isn’t this a prosperous nation, and a’n’t you in a thriving state?’”

“What did you say?” asked Louisa.

“Miss Louisa, I said I didn’t know. I thought I couldn’t know whether it was a prosperous nation or not, and whether I was in a thriving state or not, unless I knew who had got the money, and whether any of it was mine. But that had nothing to do with it. It was not in the figures at all,” said Sissy, wiping her eyes.

“That was a great mistake of yours,” observed Louisa.42

The geo-economics of growth

Between the publication of Hard Times and the First World War “prosperous nations” multiplied, as capitalism went global. In the process, geopolitics intertwined with capitalist competition, the characteristic feature of which is that it has no limit. Colonial conquest and war graphically demonstrated the geopolitical implications of economic growth such that by the end of the 19th century it had become impossible “to conceive of a ‘great power’ that was not at the same time a ‘great economy’,” in Eric Hobsbawm’s phrase.43 The expansion of capitalism in Britain underwrote its military successes; its rivals could only keep step by creating conditions for the same, on pain of economic stagnation or military defeat. In countries that were playing catch-up with Britain, the problem was felt with particular urgency, and the liberal homily that economic growth should be left to itself failed to convince. As the American politician Alexander Hamilton argued, it is in the interest of a state “with a view to eventual and permanent economy” that it “prompts and improves…the growth of manufacturing industry”.44 In Germany two generations later Friedrich List made a similar case, albeit with greater emphasis upon the centrality of military power to national-economic growth. Britain, he observed with admiration and envy:

owes her immense colonial possessions to her surpassing manufacturing power. If the other European nations wish to partake of the profitable business of cultivating waste territories and civilising barbarous nations…they must commence with the development of their own internal manufacturing powers, their mercantile marine, and their naval power.45

List’s prospectus was the domination of town over country, of Europe over the world, and of industry over agriculture. A manufacturing and commercial economy is superior to an agrarian one, for only it encourages “the spirit of striving for a steady increase in mental and bodily acquirements”.46 But this would not result from the natural course of market expansion. Rather the state must take a proactive role in two respects. One is to engineer conditions conducive to market formation. The other is the cultivation of the nation’s “productive powers”, in particular the development of its “mental capital”. The two policies are linked, for the purpose of protectionism is to increase the nation’s “productive power” (as opposed to merely the quantity of “exchangeable values in a country”).47 Together these strategies would enable second-tier states such as Germany and the US to punch their way into the British-dominated world market.

List became known for his defence of protectionism but also for his disavowal of individualism and materialism—intellectual ailments that he accused Adam Smith of harbouring, embodied in his labour theory of value.48 For List, the source of value is rather different: “productive power”, which is culturally grounded and nationally bounded—it flows from the techniques, norms and values that are cultivated by judges and lawyers, clerics and teachers, scientists and artists.49 He even proclaims the Christian religion to be a “rich source of productive power”. 50 But List’s denunciation of materialism, Marx argued, smacked of ideology. List was giving voice to the interests of the German bourgeois, whose fundamental wish is “to become rich, to make money” yet who at the same time:

must come to terms with the present idealism of the German public and with his own conscience. Therefore he tries to prove that he does not strive for unrighteous material goods, but for a spiritual essence, for an infinite productive force, instead of bad, finite exchange values.51

This bad faith, Marx adds, also characterised List’s advocacy of protectionism. For this project, designed to serve the industrial bourgeoisie and imperial power projection, was built from the sweat of working people. The German bourgeois “hopes to become rich mainly through ‘protective tariffs’”, but this involves exploiting his “fellow-countrymen”—indeed, exploiting them over the odds, for tariffs impose a tax upon consumers. As a result, the German bourgeois seeks to prove that, “far from hankering after material goods, he wants nothing else but the sacrifice of exchange values, material goods, for a spiritual essence”. Hence the attraction of List’s programme, wrapped as it is in the language of “self-sacrifice, of asceticism, of Christian grandeur of the soul”, and presenting itself as a mission not for grubby material gain or imperial plunder but purely and nobly “for the harmonisation of social production, and for the organisation of society”.

List’s political economy proved highly influential, above all in Germany where his followers formed what became known as the “Historical School” of political economy. Towards the end of the 19th century, against a backcloth of the first “Great Depression”, intensified geopolitical competition and the collective organisation of the working class, elite attention turned to the “condition of the people”. Increasingly, capitalism had to be “sold” to the popular masses—and this was especially true in democracies. (Universal suffrage, Engels pointed out, “compels the ruling classes to court the favour of the workers”.52) In this environment, neo-Listians pioneered a distinctive technique of “marketing” capitalism: they defended the system in general by attacking its most overtly anti-social “variety”—free-market “Manchester capitalism” with its “casino speculation mentality”.53 These ideas found a hearing among social democrats in Germany and Central Europe, and so too did those of Karl Rodbertus, a conservative “state socialist” and friend of the German labour leader Ferdinand Lassalle. Rodbertus is relevant to my argument because he championed “the most powerful and unrestricted expansion of production, of wealth and of the productive forces”.54 To oppose economic growth, he believed, is tantamount to throwing a spanner in the machine of social progress itself. This sort of fervent faith in economic growth had hitherto been the province of bourgeois thinkers, but by the turn of the century it was increasingly prevalent in social democratic circles too.

“Socialism from above” and GDP

The first four decades of the 20th century saw the growth paradigm lurch forward. A marked shift occurred, from a rather vague sense—long prevalent—that government should preside over economic “improvement” and “material progress” to an urgent conviction that promoting growth is a matter of national priority. Factors behind the shift included intensified geopolitical rivalry, and the increasing “muscularity” of states, with their expanded bureaucratic apparatuses, surveillance systems and welfare provision. In some countries the expansion of the suffrage was an additional factor: as a result of pressure from below, but also in the interests of producing healthier and disciplined workers and soldiers, rights were extended and an infrastructure and ideology of “national belonging” were constructed with the aim of incorporating the lower orders as citizens into the body politic. New forms of mass warfare evolved, fought not for the ruling class’s hold on territory but for the “nation”, and with mass citizens’ participation. This culminated in two “World Wars” during which governments mobilised populations behind national military goals and developed corporatist compacts that invited business and trade union leaders into the corridors of power.

The consolidation of the growth paradigm did not bypass the socialist movement. Economic growth, the Caribbean economist and Nobel Laureate Arthur Lewis has pointed out, “played little or no part in the blueprints of socialism which were drawn in the 19th century or earlier; no part in fact in the writings of any leading socialist before the 1920s”. But that decade witnessed an about-turn. In Lewis’s view, the rupture was ignited by forced industrialisation in the Soviet Union in the late 1920s. “Economic growth”, he remarks:

is not elevated to be a topic for serious thought in socialist circles until the era of Stalin, who realised early in his regime that the blueprints he had inherited were not compatible with the economic objectives he sought to attain, and he therefore promptly discarded the blueprints.55

Stalin’s Five Year Plans set ambitious targets in the producer goods and military sectors, with the avowed aim of ratcheting up growth rates. Targets were drawn up with the image of rival Great Powers in view, and the Soviet Union succeeded in industrialising rapidly even as rival economies slumped. For the latter, the Soviet experience symbolised the need to ensure economic growth, as a guarantor of military prowess and as an index of competitive success. For most socialists, successful Soviet economic growth appeared to sanction the possibility of an alternative to capitalism.

Lewis correctly identifies the 1920s as the seminal decade but he exaggerates the significance of Russia. A more lasting impact was provided by that other major movement for “socialism from above”: social democracy. Following success in winning legal status in Western Europe and elsewhere, it sought to marshal its followers behind goals—economic growth, welfare spending and war—that can be pursued within a capitalist framework. The labour bureaucracy promoted an expanding capitalist bakery in the hope that their members and voters might get more crumbs from the cake. The paradigmatic case was Sweden’s Social Democratic Party, which in the inter-war period abandoned the quest for “equal rewards” and economic democracy in favour of aspirations to “economic growth [and] democratised opportunities”, carefully wrapped within a Keynesian compact with the corporate sector.56

In economics, the 1930s was the decade of Keynes and also of national accounting. In 1932 the US Congress commissioned the economist Simon Kuznets to devise a means by which to measure the nation’s output. Gross Domestic Product (GDP) was the result. In essence, GDP presents a survey of economic activity from the perspective of legally-transacted exchange value. It focuses on flows, to the exclusion of assets; it excludes illegal transactions and those in which no money changes hands—housework, DIY and voluntary work. Thus GDP falls if a film star marries her agent and rises if she has second thoughts and buys a revolver to effect the change.57 Being an aggregate figure, GDP is stringently M’Choakumchildlike in its neglect of income distribution. Another shortcoming is that GDP treats the sale of natural resources as income, without making any commensurate subtraction for resource depletion or depreciation.58 It takes no account of “externalities”—the costs that firms impose upon others but for which they are not charged, such as environmental degradation, noise pollution or congestion—except insofar as producing or countering them entails market transactions, and in such cases these appear as additions to GDP. That GDP came to be regarded as a proxy for human well-being can only be explained in terms of power and ideology: in capitalist society the general interest becomes subsumed under the interests of those engaged in market transactions.

Triumph of the growth paradigm

From 1950 to 1973 capitalism experienced its golden age, and in the industrialised world the growth paradigm achieved its complete form. By producing “avalanches of consumer goods” that “progressively raise the standard of life of the masses”, the economist Joseph Schumpeter promised, capitalist growth, if sustained, will surely abolish poverty.59 Steady growth resurrected the belief in progress that had been badly rattled by world wars, depression and the Holocaust. By the mid-1950s these dreadful apparitions, writes Clive Hamilton, were being “supplanted by visions of a new nirvana, of consumer bliss”, and the goal of social action was increasingly formulated in terms of growth, measured in annualised increases in GDP. “This was convenient”, he remarks, in identifying capitalist corporations as “the central agency of progress”.60

Increasing GDP became a key policy objective for states the world over, and governments established targeted growth rates. In East and West alike economic planning was in vogue, accompanied by a ramped-up commitment to economic rationalisation and productivity growth, all lathered in techno-optimism. “Better Living through Chemistry” was a US slogan in the 1950s, mirrored in Soviet Eastern Europe by “Chemistry gives bread, beauty and prosperity!” There was a military angle too, as both Cold War rivals identified growth as the elixir of geopolitical success. John F Kennedy, who had been elected on a campaign promise to hike the growth rate to 5 percent, put it thus: “If we lack a first-rate growing economy, we cannot maintain a first-rate defence”.61

In the US advertising agencies got in on the great growth chase, championing their services as essential for the manufacturing of the new wants that it required. “I see advertising as an educational and activating force capable of producing the changes in demand which we need,” pronounced the head of the J Walter Thompson agency in the early 1950s. “By educating people into higher living standards, it ensures that consumption will rise to a level justified by our production”.62 A similar argument was put, even more candidly, by a marketing consultant in 1955: “Our enormously productive economy demands that we make consumption our way of life, that we convert buying and use of goods into rituals, that we seek our spiritual satisfactions, our ego satisfactions, in consumption… We need things consumed, burned up, worn out, replaced, and discarded at an ever increasing pace”.63

In 1958 the growth paradigm reached its acme. In that year the Republican plutocrats Nelson and Laurence Rockefeller recruited Henry Kissinger to prepare a report on “The Challenge of the Future”. Heading a panel comprised of economists associated with large corporations and major universities, Kissinger produced a book, The Key Importance of Growth to Achieve National Goals, which identified growth as the solution to the continual pressure of competing claims on national income (the arms race, public infrastructure, education, etc). Growth, it argued, not only brings “dignity, freedom, and purpose” but promises to expand “the opportunities for individual fulfilment, multiply the incentives for enterprise, enable us to improve our educational system, permit us to increase our protection against economic hardship, make possible rising standards of national health and open new vistas of cultural achievement”.64

Worldwide, growth came to be seen as a proxy for the profitability of national economies and as a magic wand to achieve all sorts of goals: to abolish the danger of returning to depression, to soothe class tensions, to reduce the gap between “developed” and “developing” countries, to carve a path to international recognition, to contain the USSR, to accelerate “the transition to socialism”, and so on. The greater the growth, it was universally supposed, the smaller the economic, social and political challenges, the weaker the geopolitical threats and the more secure the regime. Growth became an integral part of social life throughout the world and played a decisive part in binding “civil society” into capitalist hegemonic structures.

In Europe the crucial binding agents were the trade unions and labour parties, and the growth paradigm became a fixed star in the social-democratic firmament. As Stephen Purdey describes, Keynesianism and social democracy came to be seen as a “grand bargain that rested on a shared expectation that regulated national economies within a liberal world market would enable economic growth, the fruits of which would be shared reasonably among the deserving sectors of the populace—not least, thanks to the welfare state”.65

In Britain, for example, the secretary of state for war in the Attlee administration, John Strachey, declared that governments must aim to turn our “marvellous productive resources to the task of steadily, and to an indefinite extent, raising the standard of life of the whole population of the world”.66 Now that we had entered the age of abundance, social democrats no longer needed to trouble themselves with questions of social class and inequality, for, as Strachey’s comrade Tony Crosland confidently predicted, “the level of material welfare will soon be such that marginal changes in the allocation of resources will make little difference to anyone’s contentment”.67

Growth scepticism

Today, after several decades of slower growth in Japan and the West culminating in an almighty crisis, there is less talk of marvellous abundance yet the growth fetish continues to cast its spell. Judging by their rhetoric, policymakers have little else on their minds. The statement released after the meeting of G20 leaders in Toronto in June 2010 “mentioned the word ‘growth’ 29 times in nine pages. Mr Obama says his economic policy is all about ‘laying the foundations for long-term growth’. Japan’s government unveiled a ten-year ‘new growth strategy’.”68

Britain is no exception. David Cameron used his inaugural speech as prime minister to lay out a “strategy for economic growth”, confronting a Labour Party front bench whose declared aim was to “build the high-growth economy of the future”.69 TUC leader Brendan Barber joined the chorus, hailing growth as the solution to the economic crisis (and appealing to trade unionists “to work with employers to promote it”),70 while his senior policy advisor identified “turbocharged growth” as the “entire basis of our ‘Plan B’ alternative” to the coalition’s spending cuts.71

Yet if the faith in growth is as ubiquitous as ever, the last few decades have also seen doubts spread. One source of growth scepticism emerged in the 1970s over concerns at rising pollution and diminishing supplies of non-renewable resources. The same decade saw the birth of “ecological economics” as well as a plethora of moral critiques of industrial civilisation. It was also the decade in which policymakers and scholars were first alerted to global warming. “A continuous and excessive rise in unabsorbed atmospheric carbon dioxide in the atmosphere”, United Nations General Secretary U Thant warned in 1970, “could have a catastrophic warming effect, melting the polar ice, changing the marine environment and creating flooding on a global scale”.72

Recognition of the effects of climate change began to transform the debate on growth. For the most powerful argument for growth justifies it in terms of freedom. It has been put with particular elegance by Arthur Lewis. The advantage of economic growth:

is not that wealth increases happiness, but that it increases the range of human choice… What distinguishes men from pigs is that men have greater control over their environment; not that they are more happy. And on this test, economic growth is greatly to be desired. The case for economic growth is that it gives man greater control over his environment, and thereby increases his freedom.73

The argument justified in terms of freedom is getting less convincing with each passing season. Certainly, growth gives human beings the potential for greater control over our environment, and greater actual control over certain aspects of it. But partial control can create blowback, and enhanced control of some part of the system can undermine our ability to shape the whole. By way of illustration, whereas some would suggest humanity’s “conscious control” over our environment is exhibited in our ability to “tame rivers”,74 this, as Fred Pearce shows in When the Rivers Run Dry, often involves the exercise of short-term, localised and merely instrumental control that eschews any real consideration for the long term, or for the entire course of the river, let alone other affected ecosystems. The successful “taming” of a river may generate all manner of problems downstream—geographically or temporally. Specific cases such as this may erode but do not destroy Lewis’s argument. Climate change, however, is on an altogether different scale. A momentous example of humanity learning the laws of nature but failing to apply them judiciously, it attests to economic growth actually decreasing humanity’s ability to control the natural environment, as the planet careers towards feedback-fuelled runaway warming.

Alongside environmental concerns, a second source of growth scepticism has been the perceived disconnect between economic growth and social well-being. Yardsticks such as the UN Human Development Index (HDI) and the Genuine Progress Indicator (GPI) have been developed to estimate well-being, as alternatives to GDP. Such indices are inherently inexact because, almost by definition, key aspects of the quality of life can’t be measured.75 Nonetheless, their findings are significant and chime with abundant anecdotal evidence. For example, if measured by GPI, well-being improved continuously in the US and Britain from 1950 until 1976, but has declined ever since—in contrast to steadily-rising GDP.76 Doctors, judges and barristers, whose earnings have more than doubled in real terms since 1978, may find that implausible, but those in occupations such as forklift truck driving, packing and bottling, and baking, in which incomes have fallen over the same period, will not.77 In hindsight, the Sex Pistols’ 1977 chorus of “No Future” seems less like a nihilistic rant than a scientific prediction, for whereas “Britain” has become steadily “wealthier” ever since, with GDP nearly doubling, living standards for millions have stagnated or declined.

The relationship between GDP per head and well-being is limited, and such correlation between them as does exist tends to decline after a certain point—as a rule of thumb, when per capita GDP exceeds $15,000. Material wealth can be an important determinant of living conditions and the quality of life, but the relationship is contingent. Amartya Sen points out that in 20th century Britain the decades of slow GDP growth were those in which life expectancy increased especially rapidly (1910s, 1940s). This attests to “changes in the extent of social sharing during the war decades, and the sharp increases in public support for social services (including nutritional support and healthcare) that went with this”.78 Others have shown that although life expectancy tends to correlate with GDP per head, this is due to the impact of GDP on the incomes of the poor and on public expenditure (notably healthcare). Once these variables are included on their own in the statistical exercise, little extra explanation is obtained by including GDP as an additional causal influence.79

The most impressive recent contribution to this field of inquiry is Richard Wilkinson’s and Kate Pickett’s best-seller, The Spirit Level. Its principal thesis is simple: as national income increases beyond a certain level it ceases to translate into improvements in health or happiness. Instead the critical variable is the degree of equality. Deploying an impressive body of evidence The Spirit Level demonstrates that income inequality varies inversely with levels of trust, life expectancy, children’s educational performance and social mobility, and directly with rates of homicide, imprisonment, mental illness, alcohol addiction, infant mortality, obesity and length of working hours, not to mention spending on advertising. The level of these social ills is much higher in unequal societies than in more equal ones. The authors suggest that by exacerbating the importance attributed to one’s ranking in the status hierarchy, greater inequality heightens our anxieties about how other people rank us. We come to see social position as a more important feature of our identity—those at the top feel insecure; those at the bottom feel devalued and demeaned. The resulting perceptions of competition and threat, and feelings of inferiority, create individuals who are less empathetic and more aggressive. Inequality, in short, breeds all manner of social ills.

The Spirit Level efficiently rebuts both of the other major arguments in favour of (rich-nation) economic growth, namely that it provides the means by which radically to reduce poverty, and that rising GDP is an indispensable precondition of human flourishing. With respect to the rich countries these arguments, it shows convincingly, must be severely qualified. Although few countries today combine a satisfactory quality of life (defined as above
0.8 on the HDI scale) with an ecological footprint that is globally sustainable, one or two do so, and several others come within a whisker, demonstrating that such a balance can be achieved—and if carbon-reducing technologies are made widely available it is well within the means of human endeavour worldwide. It is worth recalling that average world GDP, at $6,000 per head, is now greater than the average for the West in 1950.80 “It is fortunate”, Wilkinson and Pickett conclude, that “just when the human species discovers that the environment cannot absorb further increases in emissions, we also learn that further economic growth in the developed world no longer improves health, happiness or well-being”.81

Explaining the growth paradigm

Among those who offer explanations for the growth paradigm, two arguments are commonly encountered. Some, including Wilkinson and Pickett, maintain that status competition, expressed in consumer choices, is its underlying cause.82 They identify a “hedonic treadmill”, an interminable race to buy goods in order to (im)prove our status vis-à-vis colleagues and neighbours who are preserving theirs by continually seeking out new consumption opportunities. Billions of envious consumers stomping the treadmill turn the cogs of growth. Explaining growth by reference to consumer behaviour has been commonplace ever since Adam Smith. Human beings in his account, in their attempt to gratify their “love of distinction”, are prone to fall for a deception, namely that the accoutrements of wealth represent something genuinely grand, and “it is this deception which rouses and keeps in continual motion the industry of mankind”.83 On this basis he concluded that consumption is “the sole purpose of all production”.84 But as Marx pointed out, this rests on a confusion. “In capitalist production what matters is not the immediate use value but the exchange value, and, in particular, the expansion of surplus value. This is [its] driving motive, and it is a pretty conception that—in order to reason away the contradictions of capitalist production—depicts it as production aiming at the direct satisfaction of [consumers]”.85 I discuss Marx’s alternative account below.

The second major argument foregrounds beliefs and mentalities. An important recent account of the growth paradigm is Stephen Purdey’s Economic Growth, the Environment and International Relations. The growth paradigm, Purdey proposes, arose primarily as an ideological commitment. Its origins lie in political diktat: it was “ordered into being” by the “commanding authorities”. 86 It later assumed the form of “a belief in progress that, over the centuries, evolved into a ubiquitous political commitment to economic growth”. Because it was not driven principally by changes in the sphere of socio-economic relations, Purdey maintains, it “inverts completely the Marxian conception of base-superstructure”.87

Yet Purdey’s text abounds with evidence that slots perfectly smoothly into just such a Marxian conception, one that identifies capital accumulation as the root of both the material logic and the ideology of growth. First, Purdey shows the growth paradigm has developed alongside the capitalist mode of production, and identifies several “features of capitalism that contribute to the commitment to growth”, including its tendency “to lock in its own competitive criteria to the exclusion of other socio-economic systems”, and its “ability to induce a convergence of economic policies among states despite variations in their cultures”. Second, he points out that the “structure of capitalism” generates “a kind of path-dependency which tends to lock in the pursuit of short-term material interests”, while “the competitive nature of international trade and mobile capital constrains actors to endorse growth by making it too costly not to play by the rules of the game”. Systemic pressures of this nature “provide compelling reasons for the political preference for economic growth”. Finally, in exploring the question of why “the general interests of capitalists have come to be seen as congruent with the common good of society”, Purdey’s answer is that the satisfaction of their interests is a necessary condition “for the satisfaction of all other interests within the system”: without profit, investment ceases and jobs are axed.88

Of what, then, would a Marxist account of the growth paradigm consist? It could reasonably begin, following Marx, with the two properties of the commodity: it is exchanged and used. Exchange values exist as use values, and use values cannot create themselves out of thin air—production and distribution take place in space and time, through the organisation in a division of labour of people, physical resources and energy. Capitalism, in Marx’s account, is a system with a dual core set of relations: competitive and exploitative accumulation. The heart of the accumulation process is the continuous extraction of surplus labour using ever new methods, a process fuelled by the competitive relations among capitals. The coordination of their activities occurs “behind their backs”, through market exchange. It is based upon interdependence—the mutual need of independent producers for each other’s products—and it is coercive, with competition forcing producers to conform to prevailing prices or risk leaving their commodities unsold. Accumulation is of exchange value but has real-world effects; a capital’s survival and success depend upon increasing the productivity of the workforce and the size of its market. This tends to expand the scale of production. As Marx describes:

We thus see how the means of production are constantly enlarged, revolutionised, how division of labour necessarily draws after it greater division of labour, the employment of machinery greater employment of machinery, work upon a large scale work upon a still greater scale. This is the law that continually throws capitalist production out of its old ruts and compels capital to strain ever more the productive forces of labour for the very reason that it has already strained them—the law that grants it no respite, and constantly shouts in its ear: March! March!89

In its juridical aspect, capitalism is based upon “absolute property”. Because exchange depends upon the products of labour being bought and sold, ownership must be, in principle, absolute. The system of generalised commodity relations and the separation of wage labourers from the means of production are bound up with a “social division of property” that sanctions the exclusive ownership of much of the world’s natural resources in the hands of capitalists. They are compelled to direct them to the goal of capital accumulation, regardless of environmental “externalities”. Indeed, far from exemplifying market “failure”, externalities are in fact “efficient methods of pursuing the true goal of the capitalist economic system: profit and capital accumulation”.90

But the growth imperative is driven by states too. In addition to providing the legal and political framework for issuing currency and administering markets, states erect infrastructure and manage the production and circulation of labour power.91 They subsidise exports and fund R&D. All such functions depend upon creaming a surplus from the “economy”, via taxation, which gives states an intimate interest in the value accruing to their subjects’ (as well as their own) property. Thus states take responsibility for supervising the framework of commodity production and circulation—and for promoting growth. They are, in Colin Barker’s phrase, as “subordinated to the imperatives of the competitive accumulation of capital as any trader, factory owner or proletarian”.92 The growth imperative is transmitted to states at domestic and international levels, for they are dependent upon domestic capital accumulation and pitted in competition against rivals. While a business that fails to prioritise growth is punished by “markets” and banks, a state that does the same is punished by bond markets and international institutions such as the World Bank and the International Monetary Fund.

Taken together, these arguments suggest that capitalism is locked into a growth drive that is undermining its conditions of existence. Capitalism is, in James Anderson’s pithy phrase, “uniquely dynamic in producing ecological problems and uniquely unsuited to solving them”.93 But is there any wiggle room? In a recent book Max Koch makes the case that the political management of environmental issues such as climate change does not simply reflect the “logic of capital” but is constructed politically.94 The global ecological crisis does not primarily emanate from the mode of production but is an “institutional crisis of the appropriation of nature by society”. The institutions Koch targets are those that support the contemporary “’finance-driven’ accumulation regime” and which undermine the state’s role as administrator of public goods.95 A “new growth period” is perfectly conceivable, with GDP growth decoupled from greenhouse gas emissions.96 This would, he maintains, require a new geopolitical regime, with the “establishment of international institutions (not unlike the Bretton Woods institutions after the Second World War) powerful enough to limit and steer capital valorisation in accordance with ecological laws”.97

Koch’s argument is well made but is not without flaws. One is that he fails to trace in sufficient detail the links between the mode of production, capitalism, and its specific institutional arrangements. Related to this is his underestimation of the power of vested interests. The historical record brims with examples of civilisations that have succumbed to ecological collapse, and in each case the entrenched interests of elites form a colossal obstacle to progressive change. The concentration of power at the top of class societies, as Ronald Wright has put it in his survey of pre-capitalist ecological catastrophes, “gives the elite a vested interest in the status quo; they continue to prosper in darkening times long after the environment and general populace begin to suffer”.98 In our era the same applies. At the most general level the vested interests include the capitalist class as a whole, with particular culprits being fossil fuel and energy-intensive corporations—the owners of fixed capital that would be devalued in a transition to a low-carbon economy. Koch does not sufficiently consider how these interests can be challenged, and neglects questions of political agency. He does not elaborate a politics of ecological transition, presenting it instead in blueprint form—a template for a desirable institutional transformation. In short, he doesn’t get to grips with the question of what form, concretely, the transition to his anticipated social democratic eco-capitalism would take.

At the other end of the (Marxist) spectrum are those who emphasise that capitalism’s laws permit very little room for manoeuvre. Minqi Li, for example, offers a mathematical proof of “the Unsustainability of Capitalism”.99 Li’s “proof” is largely convincing in its own terms but can be criticised for its absoluteness. Here, the question of timescale is central. If capitalism is ecologically unsustainable in the long run, could not a short-term global “New Deal” contribute to a sharp reduction in greenhouse gas emissions? This scenario may be unlikely but is surely not impossible. Capitalist institutional regimes have undergone sharp transformations in the past, and the vested interests mentioned above are formidable but not omnipotent.

Whether or not capitalism prevails, the requisite tasks are clear. We have roughly two decades, in Jonathan Neale’s estimation, “to take the action that will probably avoid the horrors of runaway climate change”. This will require “between 100 million and 200 million new jobs, globally…to build wind turbines, insulate houses, build railway lines [etc]”. And that, Neale adds, “means ‘growth’”. The millions of newly employed workers’ wages “will count as increases in GDP… Everything depends on whether we can grow in this way for 20 years, within the limits of the Earth’s carrying capacity.” To this end, Neale argues, we must build a climate movement that argues for “decent living standards, jobs and growth of a very particular kind”.100

In all practical respects—outlined in detail in his One Million Climate Jobs pamphlet—Neale’s agenda for a climate-friendly restructuring of Britain’s economy is convincing and comprehensive.101 He outlines the tremendous scope that exists for improving the quality of life for millions—and, on the world scale, billions—while at the same time radically reducing greenhouse gas emissions. But his formulations on growth and sacrifice should be qualified. On the whole, I share his antipathy to “sacrifice” (and its cousin, “scarcity”). This is the language of neo-Malthusians, as well as neoclassical economists, all of whom conceive of the human relationship to nature principally in terms of consumption, with scarcity figuring as the gap between the insatiable human propensity to consume and the limited productive potential at the disposal of capital. In policy terms, they advocate an austerity agenda that lands light bruises on the rich, but heavy blows on the poor.102 By contrast, Marxists prioritise social labour in their theoretical account of humanity’s interaction with nature and also, in practical terms, as the principal means for mitigating climate chaos. For them, the fundamental problem lies in capitalism’s “inability to allocate resources where they are most needed, and in its propensity to concentrate resources in the hands of those least likely to need or derive much satisfaction from them. In other words, the fact that resources are scarce relative to conceivable human wants is much less significant than the way capitalist societies waste and misuse available resources”.103

Nonetheless, certain sacrifices are needed: for instance on the part of frequent flyers, SUV owners, or eaters of beef. These would disproportionately, but not exclusively, affect the wealthy. As to Neale’s “fight for growth”, to avoid ambiguity it could more fruitfully be couched in determinate, qualitative terms: the need is not for “growth” but for climate jobs, street by street refurbishment of buildings, additional bus routes and tram lines, solar panels, public healthcare, and so on. In the Global South the list could be extended to include electricity supply for the 1.6 billion people who lack it, an end to back-breaking work, and the installation of sanitation and water systems.

By way of further illustration, consider a pressing “economic” problem: hunger. Is the solution “growth”? No. There is enough food to go round; it simply requires distribution according to need rather than “effective demand”. Even were the world’s population to expand to 9 billion, researchers at the University of Minnesota have shown, sustainable agriculture could meet the needs of all. The strategy they propose is to pursue sustainable food production on five fronts: closing yield gaps on underperforming lands, using agricultural inputs (water, nutrients and chemicals) more strategically, altering diets such that croplands are dedicated to direct human food production, reducing food waste, and halting farmland expansion in the tropics.104 Again these policies are best framed as determinate, qualitative processes, not as “growth”.

Food for the hungry and malnourished, jobs for the workless, improved public transport, cleaner cities and a more equitable and healthier society: for most people, excepting those who consider presenting Top Gear to be the pinnacle of human achievement, these accomplishments would more than compensate for the aforementioned sacrifices. Many of them would expand the output of some goods (eg electricity), but that does not make them a manifestation of “growth”. That concept has functioned for decades, even centuries, as a metonym of capital accumulation. The ideological moss it has gathered along the way cannot be brushed off. It would be better tossed aside.

Economic growth as ideology

I’ve argued above that the growth paradigm is anchored in social relations. It is intrinsic in a society based on commodity production, for in such a society the drive to accumulate capital is imperative and ubiquitous. It cannot be explained in terms of misdirected views and false priorities alone, and therefore the transformation of humanity’s relationship with its environment requires more than a change of mentality. Yet growth does also perform a vital ideological role. It ranks alongside nationalism as a means of ideological mystification, of the presentation of particular interests as the general interest, and of incorporating the producing classes within the capitalist hegemonic project. While much attention has been devoted to the ideological effects and functioning of nationalism, however, the ideological role of growth has been neglected. There is a need for ideology critique: to uncover contradictions in the dominant ideology, to lay bare their connections within society’s mode of production and to comprehend their obfuscatory workings. Although space does not permit a substantial discussion of this, some basic points can be made.

To begin with, growth serves as an idealised refiguration of capitalist social relations; it serves to naturalise and justify the prevailing social order. Even its vocabulary is in this respect revealing. Discussion of the economic by way of biological analogy implies continuity (gradual change), and unity (it is the “social whole” that grows). When represented through the discourse of growth, the interests of capital come to be identified with the common good, because the profitability of capital—given the monopolisation of the means of production by the capitalist class—appears as a necessary condition for the satisfaction of all other interests. Without profitable enterprises there will be no investment, no employment, no taxation, and no money for workers to pursue their goals. When growth accelerates, therefore, the changes ramify throughout society:

There is a chorus of cheers. Consumers look to growth because it means more goods and services available in markets; workers see growing job opportunities and rising incomes; public agencies receive more money from increased sales and income tax revenue to pay for police, schools, and roads; nonprofits receive more donations and grants from rising incomes; bank loans are repaid; and, most importantly, investors’ profits are realised.105

Conversely, when growth turns to contraction, trepidation is felt by all. “Workers experience layoffs and default on their bank loans; falling profits and share prices deplete the value of pension funds; bankruptcies soar along with government budget deficits and budget cuts”.106 If profits cannot be made, capital refuses to employ additional workers and fiercely resists wage rises; the public are therefore motivated to support political parties and actors that promise to increase growth, in the hope of achieving higher remuneration—the material compensation for labour and symbol of social recognition.

In this way the growth paradigm—the idea that continuous economic growth is society’s central and overriding goal—provides ideological cover for what is the true goal of capitalist production: the self-expansion of capital. Capitalists and their cadre would prefer their interests not to be seen in these terms. “As a system of competition,” Mike Kidron and Elana Gluckstein observe, “capitalism depends on the growth of capital; as a class system it depends on obscuring the sources of that growth”.107 The ideology of growth is central to this deception. It obfuscates the exploitative process of accumulation, presenting it instead as something of general interest—growth. Economic growth is even defined in terms that identify it with the common good—Wikipedia and Fox News, for instance, define it as the “increasing capacity of the economy to satisfy citizens’ wants for goods and services”.108 In these ways the growth fetish functions as commodity fetishism at one remove. Economic growth, although the result of social relations between people, assumes the appearance of an objective necessity and imperative injunction. It is assumed to be essential, the lifeblood of our society. It comes to stand for what our society is and does. Its end, the end of capitalism, would appear as the end of humanity—an apocalyptic Menschheitsdämmerung, in Elmar Altvater’s resonant phrase.109

Growth in an era of crisis

The current crisis of global capitalism has reshaped debates on the environment and on growth, not least in regions—notably Europe—in which it is persisting or even deepening. With respect to the argument in this article, the effect is twofold. On the one hand, the crisis focuses attention upon the socio-economic system, and linking debates on ecology to critiques of neoliberalism and/or capitalism becomes more straightforward. Towards the far left of the political spectrum this is quite apparent, but versions of the same tendency, albeit in very diluted form, can be found in mainstream political life. A recent example is the warning given by the EU’s “Climate Commissioner” that unless “a more intelligent growth model” is adopted, involving a shift from GDP to broader measures of well-being, the world will face future severe crises.110 On the other hand, at a time of crisis the clamour for growth gets louder. OECD states, having presided for decades over the privatisation of profits, then intervened to nationalise private sector debt and are now obliged to repay the interest—for which growth is seen as the solution.

Mired in debt, corporations require it more urgently than ever. “Growth, growth, growth… That’s what we want and need,” was the refrain of Richard Fuld, CEO at Lehman Brothers, when challenged over his bank’s outlandish leverage ratio.111 Squeezed by falling demand, businesses large and small lobby governments for tax cuts, “deregulation” and a growth chase—from which, unsurprisingly, the environment is the first to suffer. In 2011 Britain’s coalition government presented a draft planning policy framework that announced that at the centre of any and every planning decision must be its contribution to economic growth.112 Meanwhile, Canada withdrew from the Kyoto treaty, due to the rapid growth of its oil sands industry.113 In the US the Obama administration backtracked on plans to tighten the regulation of air pollution and was central to ensuring that no deal to continue the Kyoto Protocol was signed—whether at Copenhagen (2009), Cancun (2010) or Durban (2011).

Most voices on the left argue that growth should be promoted and that government investment is pivotal to this. As GDP grows, so the argument goes, the public and private debt burden will fall, much as it did after the Second World War, and living standards will rise. After all, “GDP equals growth equals living standards,” as Nicola Smith, head of the Economic and Social Affairs Department at the TUC, put it to me.114 But alongside a measure of good sense, this manifesto contains large dollops of delusion. For one thing, the equation of GDP growth with rising living standards no longer has much purchase, at least not for the bulk of the population. (Growth does not “trickle down”.) For another, although GDP and the quality of life for working people across the world did tend to improve in the 1950s and 1960s, conditions are now rather different. Back then massive wartime capital destruction restored, and the “permanent arms economy” lessened the downward pressure on, profit rates. Rapid growth was the result. It is difficult to envisage a recapitulation of those conditions today.

How, then, should the political left relate to growth? If growth brings jobs to unemployed people it is a cause for celebration; if it increases greenhouse gas emissions we shudder at the implications. But the call for growth as such is in reality a demand for growth insofar as it is permitted by the existing mode of production. Demands appropriate to the left are specific and qualitative: the defence of jobs, of workers’ living conditions and their organisational strength and confidence, the redistribution of wealth and a “just transition”. Britain is wealthy. In 2009, when mired in deep recession, the combined wealth of its 1,000 richest citizens grew by £77 billion—a sum that puts the current austerity package into perspective, and which could fund “climate jobs” on a majestic scale. Capital in large volume needs to pour into the sort of climate change mitigation projects that are laid out in Zero Carbon Britain 2030, in George Monbiot’s Heat, and in Jonathan Neale’s Stop Global Warming and One Million Climate Jobs.115 One suspects that it would have to be steered or forced, for serious climate change mitigation will require a qualitatively greater degree of planning, regulation and sharing than the current social order permits. This is an agenda that speaks to socialist demands: for a society in which not capital but need determines what is produced and how, in which not profit but the quality of life is the defining purpose of social labour, and in which the planet’s resources and the natural environment are handled with care.


Notes

1: National Intelligence Council, 2008.

2: New, 2011.

3: The disappearance of Venus’s water was also facilitated by its lack of a magnetic field (which would protect it from the solar wind) and by its greater proximity to the sun.

4: Hansen, 2009.

5: Bukharin, 1921.

6: Guardian, 2011. The increase in fossil fuel CO2 emissions in 2010 is estimated at
5.9 percent.

7: Maclean and Wilson, 2011.

8: Williams, 2010, p173.

9: British readers will find little comfort in the fact that, of local voices who deny this, the most prominent are Nigel Lawson and a Daily Mail columnist, followed by the science writer Matt Ridley, who in his alternate job as chair of Northern Rock failed to see the obvious warning signs before its collapse. A fourth is a contributor to a periodical that began life as an organ of the “Revolutionary Communist Party” and which seeks to give a radical veneer to the championing of big business. His defence of economic growth passes under the faux-subversive title of Ferraris For All.

10: Thomas Pogge, summarised in Panayotakis, 2010, pp76-77.

11: Figure quoted in McNally, 2011, p221.

12: Dale and Hardy, 2011.

13: Homer-Dixon, 2011.

14: Marx, 1857. He adds the qualification: “Wealth appears as an end in itself only among the few commercial peoples who live in the pores of the ancient world, like the Jews in medieval society.”

15: Marx, 1863.

16: Quoted in Weiss, 1995, p31.

17: Quoted in Oweiss, 1988, p119.

18: Alrefai and Brun, 1994.

19: Quoted in Weiss, 1995, p33. Emphasis added.

20: Tawney, 1938, p43.

21: Tawney, 1938, p45.

22: Abercrombie and others, cited in Purdey, 2010, p67.

23: Mirowski, 1985, p161.

24: Rubin, 1979, p37.

25: Maucourant, nd.

26: Postone, 1993, p203.

27: Postone, 1993, p210.

28: Thompson, 1967; Mirowski, 1985, pp161-162.

29: Postone, 1993, p202.

30: Meszaros, 2008, p280.

31: Xenos, 1989, p7.

32: Xenos, 1989, p19.

33: Xenos, paraphrased in Panayotakis, 2010, p45.

34: Boal, 2010.

35: Lasch, 1991, p52.

36: Marx, 1863.

37: Luxemburg, 2003, p165.

38: Owen, 1817, pp252-253.

39: Thompson, 1824, pviii. As a friend of Jeremy Bentham, quantification’s greatest champion, Thompson’s position is not without irony.

40: Thompson, 1824, pvi.

41: Thompson, 1824, ppviii-ix.

42: Dickens, 2008, p84.

43: Hobsbawm, 1987, p317.

44: Hamilton, 1791.

45: List, 1885, p270.

46: List, 2006, p96.

47: List, quoted in Selwyn, 2009, p160.

48: List, 2006, p27.

49: List, 2006, p26.

50: List, 2006, p29.

51: Marx, 1845, p265.

52: Engels, 1868.

53: Gustav Schmoller, quoted in Peukert, 2001, p99.

54: Luxemburg, 2003, p225.

55: Lewis, 1971, p3.

56: Esping-Andersen, 1992, pp37-38, 43.

57: Adapted from Kidron and Gluckstein, 1974. In the mainstream version, a bachelor marries his housekeeper.

58: Ayres, 1997, p197.

59: Schumpeter, 1954, pp66-68.

60: Hamilton, 2003, pp100-101.

61: Arndt, 1978, p56.

62: Quoted in Gorz, 1989, p120.

63: Quoted in Williams, 2010, p129.

64: Cracks in the Consensus, nd; Purdey, 2010, p80.

65: Purdey, 2010, p105.

66: Arndt, 1978, p37.

67: Crosland, 2006, p405.

68: Economist, 2010, p28.

69: www.general-election-2010.co.uk/labour-party-manifesto-2010-general-election/labour-party-manifesto-2010-building-the-high-growth-economy-of-the-future

70: Barber, 2010.

71: Richard Exell speaking at “Jobs Without Growth?” seminar, TUC Headquarters, London, 25 July 2011.

72: Grober, 2010, p231.

73: Arndt, 1978, p71.

74: Reiner Grundmann, quoted in Callinicos, 1995, p158.

75: Freeman, 1992, p220.

76: Hamilton, 2003, p59.

77: Lansley, 2011.

78: Sen, 1999, pp50-55. Emphasis added.

79: Sen, 1999, p44.

80: Freeman, nd.

81: Wilkinson and Pickett, 2009, p215.

82: Wilkinson and Pickett, 2009, pp222-224. Wall, nd.

83: Smith, 2009, pp212-214.

84: Smith, 1993, p376.

85: Marx, quoted in Keen, 2001.

86: Purdey, 2010, p98. Here Purdey is misquoting Robert Heilbroner, whose theme is not growth but the labour transfer involved in early state-directed industrialisation-Heilbroner, 1970, p85.

87: Purdey, 2010, pp68, 88.

88: Purdey, 2010, pp36-37, 55.

89: Marx, 1847. Emphasis added.

90: Panayotakis, 2010, p109.

91: See Barker, 1998.

92: Barker, 1998, p48.

93: Anderson and Goodman, 2010.

94: Koch, 2011, pp38-39.

95: Koch, 2011, pp44, 87.

96: Koch, 2011, p122.

97: Koch, 2011, p186.

98: Wright, 2004, pp108-109. For a historical materialist account of the dynamics of civilisations’ rise and fall, see Harman, 2008.

99: His proof is phrased in terms of Paul Ehrlich’s I = P x A x T equation, where I is total environmental impact, P is population, A is “affluence” (per capita GDP) and T is “technology” (environmental impact per unit of output). Sustainability requires I to fall, but under capitalism, Li maintains, P x A tends to rise indefinitely, in which case T must fall indefinitely such that I per unit of GDP approaches zero-an impossible result-Li, 2008, p144 onwards. While the argument is coherent, its reliance on the “IPAT” formula is questionable.

100: Neale, 2010, pp52, 58, 36.

101: Campaign against Climate Change, 2009, p36. See also Monbiot, 2006, and Centre for Alternative Technology, 2010.

102: An example is the British government’s exceedingly inegalitarian and woefully inadequate “green deal”. See Monbiot, 2012.

103: Panayotakis, 2010, p77.

104: University of Minnesota, 2011.

105: Magnuson, 2007.

106: Magnuson, 2007.

107: Kidron and Gluckstein, 1974.

108: Wikipedia; Fox Business.

109: Altvater, 2005, p27.

110: Guardian, 2012.

111: Quoted in McNally, 2010, p107.

112: UK Government, 2011.

113: Simon, 2011.

114: Nicola Smith, in conversation, Compass conference, Unison headquarters, London, October 2011.

115: Centre for Alternative Technology, 2010.


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