Feb 25 2013
The World Economic Forum held its annual meeting in Davos, Switzerland last month. The official theme was “Resilient Dynamism,” a catchphrase that makes about as much sense as the futureless economic policies trotted out at the meeting. At least the attendees had something to ponder at cocktail hour. The mission of the forum, on paper at least, is “improving the state of the world.” And there is clear room for improvement: trillions of dollars of public debt, billions of people living in poverty, escalating unemployment, and a distinct possibility of runaway climate change.
The popular solution to these problems is sustained economic growth. In fact, the first item of the Davos meeting’s global agenda was “how to get the global economy back on to a path of stable growth and higher employment” The thinking is that if we could just get people to produce and consume more stuff, then we could also pay off the debt, create jobs, eradicate poverty, and maybe even have some money left over to clean up the environment.
It’s tempting to believe this economic fairy tale. But if growth is the cure to all of our ills, why are we in such a bind after sixty years of it? Even though the U.S. economy has more than tripled in size since 1950, surveys indicate that people have not become any happier. Inequality has risen sharply in recent years, and jobs are far from secure. At the same time, increased economic activity has led to greater resource use, dangerous levels of carbon dioxide in the atmosphere, and declining biodiversity. There is now strong evidence that economic growth has become uneconomic in the sense that it costs more than it’s worth.