The Growth Doctrine

On an Alternative World Economic Order

By Fabian Scheidler

[This contribution to the 2003 Attac study on an Alternative World Econmic Order is translated from the German on the World Wide Web, www.attac.de/debatte/wachstum_i.php.]

Growth is the central goal of all efforts in national economic policy and worldwide economic policy. According to the dominant ideology, the liberalization of trade creates worldwide economic growth. Sooner or later growth creates increased prosperity for everyone. Conversely in this perspective, poverty is the result of trifling or inadequate growth. This way of looking at things fades out crucial aspects of reality.

1. The increase of money streams as measured in the gross domestic product is described as “economic growth”. Only what is grasped in cash values is included in these calculations. Essential areas existentially necessary in every society are not considered:

· natural resources taken free of charge
· all economic activities not reduced to cash values like housekeeping, bringing up children, subsistence economy, family and neighborly assistance
· the quality of living conditions and working conditions as well as social and cultural unity.

2. In the gross domestic product, all transactions described in cash values are counted positively whether they are socially useful or harmful activities. Every car accident shows favorably in the books just like the over-fishing of fish stocks or the consumption of fossil fuels damaging the atmosphere.

The gross domestic product and the growth ideology based on it are blind for the destructive aspects of our economic mode. This blindness can lead to a society becoming poorer and poorer in real economic assets and quality of life despite continuing growth. Alternative prosperity indicators that include factors like resource supplies, health care, distributive justice etc. along with money streams show that the average quality of life has fallen with continuous growth since the middle of the 1970s. Quality of life rose parallel to the gross domestic product in the rebuilding phase of the post-war era. Thus an increased gross domestic product can cohere with a higher quality of life or capsize into its opposite.

Moreover a real growth in prosperity in one part of the world is often gained at the expense of other continents. Since colonial times, the growth of the industrialized North rested on asymmetrical economic relations allowing extraction of cheap resources from the South. At the same time global environmental burdens like CO2 emissions are caused mainly by the rich countries. The populations of poor regions are usually the most afflicted by the consequences.

Growth is also emphasized in IMF, World Bank and WTO strategies to combat poverty. The economic and social devastations of blind growth are largely ignored: soil degradation, clearing of forests, disappearance of species, change in climate, lowering of the water table, environmental poisons etc. The economic basis of countless households – particularly those two billion people who live directly from access to nature – is destroyed along with the natural foundations of life.

A just future-friendly world economic order presupposes the exodus from an idea of progress and development. A growth forgetful of nature reduces the life chances of people in the South and future generations in industrialized countries with their excessive consumption of resources. In less industrialized countries, the growth of certain econmic sectors can help discover the way out of poverty. The resource base and the social conditions of this growth are decisive.