Isn’t Consumption Official Government Policy?

By Russell England

A small town in a mostly rural area of Kentucky promotes itself as one of the best small towns in America and a wonderful place to live and work.  The chamber of commerce of a large city in the southeastern US announces plans to spend $20 million in an effort to attract members of the millennial generation to the city.  What do these vastly different municipalities have in common? The obvious answer is that they both want to attract growth, but that is only part of the story.

In both locations the civic leaders are trying to promote economic growth, and in both cases they seem to believe that growth is the key to a brighter future.  Furthermore, since the only indicator of economic health that these leaders are concerned about is gross domestic product, they have come to believe that a bigger economy will be a better one, and by implication, a bigger economy will mean a higher quality of life for all.

It is a near certainty that in either case mentioned above none of those making the decisions to promote growth have put much thought into the long term result of their actions.  The small town takes pride in its smallness, but if its efforts to attract growth are successful, how long can it maintain that charade and what ploy will it use to attract more growth after it is no longer a small town?  And will the large city, which is infamously known for its traffic gridlock and inadequate public transportation system, ever conclude that it has grown large enough?

Yes, governments at all levels in the United States actively promote growth in many ways.  For example, local governments in Georgia and other states give tax breaks and sell land at reduced rates to lure industry and put water, sewer and transportation infrastructure in place well ahead of demand.  States and communities compete against each other for growth, mostly without considering what an optimum population density or economic condition might be. At the federal level, the U.S. Department of Commerce states on its website as its overarching goal: “to help the American economy grow.”  

The city where I live has recently agreed to sell 10.8 acres of city property to a developer for $8.6 million – an amount that is half of what the city paid for the property just a few years ago.  In addition, the developer will get very lucrative tax breaks over a ten year period.  The developer intends to build luxury apartments with the idea of luring rich people to live near downtown, even though the city’s greatest need is for housing that less well to do people can afford. 

The burgeoning national debt has played a strong role in economic growth for decades, but especially the current economic boom.  If a government borrows a lot of money and passes it out to its citizens (be it in the form of cash or lower taxes) it will stimulate a lot of spending, thus making the economy, as measured in gross terms, look very good.  But how is it a good thing for a nation that is already deep in debt to go further in debt just to make politicians look good to a citizenry that is largely ignoring the big picture? And how is it ethical to pass that debt to future generations?

Since economic growth is fueled by consumption of finite natural resources, increasing population and growing debt, governments that actively promote growth represent a huge stumbling block to any efforts to fight climate change.  Fighting climate change requires reducing consumption, especially consumption of fossil fuels that produce carbon and the destruction (consumption) of forests that store carbon. As long as an increase in gross domestic product is the standard measure of economic success there is little hope of reducing resource consumption.  Indeed, I believe that economic growth may well be the largest and most critical issue ever faced by the human race. How can we halt global warming as long as our economic paradigm demands ever-increasing growth and consumption?

Thankfully, not all nations are so focused on growth. New Zealand has introduced its wellbeing budget, based on twelve indicators of general wellbeing, thus acknowledging that economic growth alone is an inadequate measure of a nation’s progress.  A few other countries have made some steps toward a wellbeing approach, but New Zealand’s seems more comprehensive – and worth watching.

It seems apparent to me that ecologists and economists are not effectively communicating with each other.   If there is some cross communication at the academic level it is not filtering down to those officials in state and local governments that are making the decisions about growth.

Russell England

Author, Gross Deceptive Product: An Ecological Perspective on the Economy