Should governments prioritize economic growth over environmental sustainability?
Raphael T
In ‘conventional’ economics, the priority is economic growth, seen in increased output in goods and services. However, Kuznets – arguably the creator of the modern notion of GDP – highlighted the need to distinguish between the ‘quantity and quality of growth’, but, for all that John Ruskin once said, ‘there is no wealth but life’, advocates of growth argue that it is essential to maximizing social welfare, bolstering public services and, in less-developed nations, tackling poverty. But a promotion of growth that ignores pernicious effects such as climate change and the finite nature of the planet’s resources threatens future generations. The question that underpins this essay suggests that growth and sustainability are polar, but I argue that growth and sustainability are not mutually exclusive but can be put in equilibrium, achieving long-term economic prosperity in both the global south and north. The holy grail: GDP growth Dedicating resources to growth seems the obvious way to alleviate poverty, improve public services and give humanity hope. The importance of growth can be seen empirically in the statistical relationship between unemployment and GDP offered by Okun’s Law (see Figure 1): a 1% decrease in employment correlates with a 2% decrease in GDP, justifying growth as a way to provide financial stability and give
purpose where ‘man is meant to be useful… to be proud’. 1 Furthermore, China, poor before the 1980s reforms, is now labelled the ‘workshop of the world’, lifting 850 million people out of poverty, and is projecting a promising future where 27% of China’s workforce will have a university education by 2030 because of rapid growth rates. 2
Figure 1: Okun’s Law
The new era of growth: technology Technology is increasingly the driver of growth, giving rise to the modern growth paradigm, techno- solutionism (Morozov, 2013). By allowing for unchecked technological growth in free markets, these techno-scientific solutions (EVs, biodegradable plastics) can provide improved material living standards and serve as a catalyst to accelerate renewable energy expansion. The deployment of AI is becoming increasingly embedded into sectors from healthcare to finance to environmental
1 Andreessen Horowitz: The Techno-Optimist Manifesto . (2023, October 16). Retrieved from: https://a16z.com/the-techno-optimist-manifesto/. 2 BBC. (2019, October 1). China anniversary: How the country became the world's 'economic miracle' . BBC News: https://www.bbc.co.uk/news/business-49806247.
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