Why Nations and Firms must Pursue Growth, but, Sustainably and Responsibly ?
How the Growth at all Costs Mantra is Harming Us
Ever since the time of the Enlightenment in the Nineteenth Century, the world has been chasing growth and more growth in all aspects of economic and social as well as political spheres. While it is natural for nations and firms following the capitalist model of development to pursue more growth and more profits, the realization that there are limits to growth since we live on a planet with finite resources and at the same time, the pursuit of growth at all costs is causing irreversible ecological and environmental damage.
Thus, it is high time we stop chasing the growth at all costs mantra and instead, focus on sustainable growth that does not harm the environment and at the same time, does not gobble up the resources without leaving anything for future generations.
Technological Change and Factor Increases in Productivity
Having said that, the supporters of the growth at all costs paradigm scoff at the criticism that we need to rein our growth fetish. They point to the fact that successive waves of technological innovation and invention have proven the doomsayers wrong since each innovation and improvement reduces the reliance on fossil fuels as well as precious resources by producing more with fewer inputs.
Indeed, there is some truth in this line of argument as, since the time of the Industrial Revolution in the Nineteenth Century, each new technology has made our lives better and simpler and at the same time, has resulted in enhancements in productivity.
However, when one talks about productivity, one must also consider the fact that while the Industrial Revolution and the Electronics Revolution did result in increased productivity, we are now at a stage where each new incremental wave of innovation is yielding diminishing increases in productivity thus leading us to a situation where even exponential change in technology does not result in massive gains in wealth and productivity.
Even if the technology does do the trick and raises the bar of productivity and growth, it has also been noticed that the gains from such innovations often accrue to the top of the income pyramid and decline as we progressively move down the pyramid.
Growth, but, for Whom ?
Indeed, any discussion on how our obsession with growth is leading to increases in income inequalities and social inequities has to take into account the fact that since the decade of the 1970s, wealth disparities have increased and while incomes of those at the top have increased, real wages adjusted for inflation and actual income accruing to the middle and lower classes has either remained stagnant or has declined.
This is leading to a toxic situation wherein those who are left out of the growth pie are resorting to electing demagogues and populists such as Donald Trump who promise them the moon but, in reality, continue the status quo of the wealthy benefiting at the expense of others.
While these arguments might sound Marxist or Leftist and to which the capitalist class and their intellectual supporters object, what is undeniable is that we are running out of resources such as oil and gas as well as are harming the environment by pursuing the growth at all costs model.
Indeed, anyone who follows the latest economic and political developments would not fail to notice that there are much strife and conflict between nations over finite resources wherein the so-called resource wars are leading to loss of human lives and causing untold misery to the poor and the underprivileged.
Climate Change as a Terrible Effect of Growth
Another undeniable fact is that our obsession with economic growth and more is better is leading to irreversible climate change and global warming and is also leading to volatile weather patterns and increased turbulence in the Earths atmosphere thereby increasing the likelihood of outlier storms and freak floods and droughts all of which place further strain on the carrying capacity of the planet.
Indeed, some experts believe that we are already past the threshold of controllable climate change and are now in a situation where uncontrollable and irreversible climate change is the norm.
Does Growth Benefit the Poor ?
To all these arguments, the usual counter from the Right is that unless we pursue growth, we would not be helping the poor and lifting Millions out of poverty and hence, while there are downsides to growth, the benefits outweigh the risks and the losses and hence, the situation is no as alarming as it is made out to be.
They point to the fact that globalization has helped countries such as China and India immeasurably and helped Millions in these countries to aspire to Western lifestyles.
However, when one argues thus, the fact remains that the World cannot afford China and India also to mimic the West and increase pollution and ecologically damaging consumption and hence, there needs to be a line drawn somewhere wherein we balance growth with sustainability and responsibility.
We have not Inherited the Earth, but, Have merely Borrowed it from our Children
Thus, the need of the hour is not growth at all costs but, growth which is sustainable and responsible as well as equitable so that we leave something for the coming generations.
After all, we have not inherited the Earth but, have merely borrowed it from our children and hence, we have a certain responsibility towards the future generations. Indeed, Small is Beautiful and Less is More as we race to the future with our eyes closed and unless we wake up to realities of unbridled growth and unfettered Capitalism, we might be faced with a nightmare that is equally frightening and equally horrible in the future. To conclude, less is better and more is to be avoided.
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