The Norwegian magazine “Innsikt” (which means insight rather than insect, btw) has several well thought out articles about the necessity of zero growth. And this picture which completely unravels the thousand words and perpetuates the common stupidity.
Unless you are an economist or have the wisdom of Solomon, you probably have a horribly wrong mental image of zero economic growth. Accustomed to economic growth through a lifetime, most people in the western world cannot imagine life without it. Â The image that comes to mind is economic standstill, a situation where people neither buy nor sell. But that would be zero economic activity, not zero economic growth.
Zero economic growth means simply that you buy roughly the same as last year. Â No more, no less. Â You can still replace your worn-out shoes, just not with a more exclusive brand (unless you cut down on something else). Â You can still trade in your old car for a new, it just has to be in roughly the same price range as the old one was.
Actually, even that is too severe. Â Even in a stagnant economy, the average person will increase their income as they advance in their career, acquiring more skills or taking on more responsibilities, or sometimes just outliving their boss. Â They just won’t get more money year by year just because they breathe. Â In practice, most people in the private sector don’t get that now either. They have to look for better jobs in companies that adapt better. Â This will still be so, but the pressure will be harsher on the companies that don’t adapt and innovate, and they will fail more quickly, shedding their workers back into the market.
Another point worth mentioning (again) is that in a stagnant economy, there will still be scientific and technological progress, it will just not be faster and faster for each year. Well, actually it may well be, due to better computers, but there won’t be more and more funding at least. Â Anyway, this means that new and better products will gradually seep into the market. For instance, while Japan was in the deep freeze of a decade-long recession, the Japanese more or less completely replaced their cameras with new electronic cameras with ever better resolution and storage capacity. Â Even though the economy did not grow, a camera that cost the same as a decade ago was actually a completely new and more versatile instrument. Likewise, computers at the end of the “lost decade” cost less than at the beginning and had vastly more capacity for computation and communication. Â Even the cars were better, at no extra cost, thanks to new inventions and refined technology.
Even with no economic growth, then, our actual standard of living will slowly improve. And for the vast majority of people, their income is already so high that they can easily save up money if they want to. Â But the expectation of ever growing growth (!) has caused people to borrow against the future, often in the form of credit cards and other unsecured credit. This is a bad move except in extreme situations, for when the money comes, you have to pay a part of it to your creditor. So at the future point where you are richer, you are actually poorer, because so much of your money is spent paying interest.
Economic growth, then, creates its own problems. Â It may be a good thing overall (if we can keep it up without destroying the environment, a big if) but it does not automatically improve our lives. Â Or rather, not anymore. Â In the past, poverty was rampant. Â People did not know where their next meal was coming from, and froze in the winter and sweated in the summer. To keep body and soul together, they had to do backbreaking work for most of the daylight hours, six days a week. Â At that time, economic growth was a great blessing. Â People were able to eat their fill and live in comfortable houses.
But at some point, people no longer grew happier. They had what they needed, and the things they now desired could not be bought for money. But they did not realize this, and clever advertising made them believe that they would get love and respect if they bought various random objects. Â Trying to keep up with the Joneses, people bought more and more of what they did not need, hardly even wanted. Â And they forgot other, affordable sources of great happiness. Â It was not in the interest of the rich and powerful to remind them of those, when the money was in maintaining an illusion: That if you only had more money, you could buy happiness.
If we adjust to a life without economic growth, our expectations will be more realistic. We will not have the same temptation to chase the rainbow, because we know it won’t be any closer this time next year. Â Instead, we are free to make the most out of the opportunities we already have.
It is time to find other measures than increased consumption of resources to set goals for our society.