Falacies about economic growth

Graeme Maxton, Guardian

Growth does not create jobs: The way the current economic system is designed, it does the opposite. The constant drive to increase productivity, which is what economic growth really is, requires manufacturers to steadily reduce input costs. Economic growth destroys jobs. sustainable business. Before the 1980s this didn’t matter much, because many new manufacturing businesses were established to soak up a rising working population. Since then, though, this has not happened – growth has increased the number of people without jobs, certainly in the rich world.

In the last 35 years, the world has experienced the fastest economic growth in human history. Yet, according to the Organization for Economic Co-operation and Development, unemployment went up.

Economic growth does not reduce inequality: Because the system is designed to reward those who already have money and assets, the free market economic model takes wealth from the poor and gives it to the rich. This is especially true since 2008 as government and consumer debts in the rich world have risen and average incomes have stagnated or fallen. The gap between the rich and poor is bigger today than in 1914. The gap between rich countries and poor ones is also much greater. The coming wave of new technology will make these problems worse. A study on the future of employment at Oxford University predicts that almost half of all jobs are at threat from robotisation in the next 20 years. Many of these are highly skilled jobs, such as those done by pilots, doctors, accountants and lawyers. The jobs that will be left are those that require a great deal of personal attention or artistic input – in other words, those that are generally poorly paid.

Boosting growth is not the way to solve environmental problems - Economic growth is the cause of them. It requires a constant increase in the flow of raw materials extracted from the planet to be turned into goods, services and waste. The more we grow, certainly using current economic thinking, the more resources we need to use and the more pollution we create. Rather then pursuing economic growth then, we should tackle our problems head on. We should develop policies to ensure that everyone has enough money to live on, because it leads to healthier and more stable societies. We should plan to reduce the gap between rich and poor, and we need to stop prevaricating when it comes to the environment and actually do something.