We must stop worshiping the false god of GDP growth.
By Jason Hickel and cross-posted from FastCoExist.com
Scholars are still trying to figure out why the society on Easter Island collapsed, ending the people famed for their construction of towering stone heads. One interesting theory holds that it had to do with the heads themselves. Somehow, the islanders decided that the giant heads represented power and success, so different groups competed to build as many heads as possible. But because there was only one quarry, to move the stones around the island required felling trees to use as rollers. To feed their lust for heads, they felled the trees so eagerly that, over just a few generations, what was once a tropical forest was reduced to barren scrubland.
The islanders must have realized that their obsession with heads would quickly spell their doom. As the project wore on, they no longer had sufficient wood to build fishing boats or houses, nor trees from which to gather fruits and nuts. They must have seen this disaster unfolding—slowly starving to death and forced to live in caves for shelter—right up until they felled the last palm. It was all because of a myth, but a myth so powerful that, despite knowing its madness, they could not resist it.ç
Humans are strange creatures. We create our own myths and then we live by them almost as though we didn’t create them at all, as if they were handed down to us by the gods. And this is not just a characteristic of small societies. Our global civilization has its fair share of powerful myths, one of which is remarkably similar to that which destroyed Easter Island. Just as multiplying heads became the sacred rule of Easter Island economics, so there is one sacred rule that underpins our global economic system: namely, that GDP must grow, and must grow at all costs. Why must GDP grow? Because GDP growth is equivalent to human progress.
We tend to take the GDP measure for granted as though it has always existed. Most people don’t know that it was invented only recently. It has a history. During the 1930s, the economists Simon Kuznets and John Maynard Keynes set out to design an economic aggregate that would help policymakers figure out how to escape the Great Depression. Kuznets argued for a measure that would help us maximize human well-being and track the progress of human welfare. But when World War II struck, Keynes argued that we should count all money-based activities—even negative ones—so we would know what was available for the war effort.
In the end Keynes won, and his version of GDP came into use. GDP was intended to be a war-time measure, which is why it’s so single-minded—almost violent. It counts money-based activity, but it doesn’t care whether that activity is useful or destructive. If you cut down a forest and sell the timber, GDP goes up; GDP does not count the cost of losing the forest as a habitat, or as a future resource, or as a sinkhole for carbon. What is more, GDP doesn’t count useful activities that are not monetized. If you grow your own food, clean your own house, or take care of your aging parents, GDP says nothing. But if you buy food from Tesco, hire a cleaner, and send your parents to a nursing home, GDP goes up…