Economists are obsessed with growth. Unfortunately, Jim Stanford writes, they define the term much too narrowly -- because they assume that good growth is inextricably linked to profit. Progressives should be fighting this idea. Growth means much more than profit. It really means "work:"
"Growth" has to be correctly defined and measured, and we must always be crystal clear that lifting living, social and environmental standards -- not "growth" for its own sake -- is our goal. In this context, I prefer to discuss "work" rather than "growth," since after all human productive activity ("work," broadly defined) is the only thing that adds value to the natural resources we harvest (hopefully in a sustainable fashion) from the environment. It is obvious that there is plenty of work to be done out there (caring for ourselves, our communities and the environment), and millions of underutilized people with the desire and ability to do it.
There is so much work to do. And that work is important for reasons other than profit:
In terms of its impact on living standards, the effects of growth depend totally on how new GDP is produced and what it is used for. If higher GDP is associated with higher profit margins, which in turn are accumulated in undistributed corporate cash hoards or paid out in fat dividends to well-off investors, then growth may accomplish nothing. And if higher GDP is generated through extensive resource exploitation, sucking more value out of a non-renewable resource base and ignoring the need for conservation and amelioration, then it will certainly be associated with continued environmental degradation.
On the other hand, there are many other ways in which an economy can "grow," and a country's real GDP increase. It could happen, for example, through a major expansion in human services delivery (e.g., child care, elder care, education and culture). Proper programs in these areas would create hundreds of thousands of new jobs, tens of billions of dollars in new incomes, and many billions in revenues for government -- not to mention delivering services that are valuable and life-enhancing in their own regard. GDP might also grow because of huge investments in public capital and physical infrastructure -- things like utilities, affordable housing, education and cultural facilities, and parks.
For nearly fifty years now, the world economy has been operating on a narrow definition of growth.The benefits of that narrowly defined growth have gone mainly to those at the top of the economic pyramid. The powers that be have told us that growth, so defined, is a scientific law -- like Newton's Law of Gravity.
Put simply, that's hogwash. And, in the places most devoted to that narrow conception of growth -- like the U.S. and the UK -- the natives are getting restless.