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economic justice | environment

Better Growth

We persuaded ourselves permanent economic growth was the answer to all questions.. We should now engage in a growth debate about the nature of this growth, not whether we should renounce on economic growth. Increasing the GDP in the short-term destroys the foundations in the long-term.

By Thomas Fischermann

[This article published in: DIE ZEIT 4/23/2009 is translated from the German on the World Wide Web,  http://images.zeit.de/text/2009/18/01-Wachstum.]

The economy shrivels a little! The forecasting institutes quietly predict economic growth in 2009 will slip a minus four, five or six percent! The fifth-richest nation of the earth can certainly cope when we land at the level of 2006. Things were not looking too good for us then. Let us simply buy smaller cars, refuse buying useless rubbish and drink water from the water mains again.

This is heard more often now. From talk show hosts on television, respected economists and even the President of Germany, "We persuaded ourselves permanent economic growth was the answer to all questions," Horst Kohler (German President and former head of the International Monetary Fund) said recently. That sounded as though we were already beyond the lowlands of more and more.

Let's be honest about this. Ideas of a painless economic shrinking cure are na´ve. Minus growth cannot be organized where everyone bears his fair share and simply receives five percent less. If there were such a way, shrinking would not be so bad. In truth, it is very painful.

The injustices of economic growth have been often criticized. But a shriveling economy is even more unjust. Persons in permanent jobs or with secure assets are hardly affected. Others lose their jobs or their entrepreneurial life work. They face a minus 100 percent of their past life projects, not a minus 5 percent.

The threatening chain reactions, the psychological effects and the wild exaggerations inherent in the economy should not be forgotten. Whether in panic mongering, scare mongering, mass dismissals, stock exchange breakdowns, anxious savings in households or credit negotiations with banks, fear and caution in crisis times are often shamelessly exaggerated, more than euphoria and greed in the boom. People have a very hard time lowering their expectations. They suffer more under a lost euro than they rejoice over a won euro. In times of shriveling, some sociologists say the social peace is in danger.

Thus we need growth - for our own peace, peace in the country and for brutal material reasons. To finance the rising costs of our health systems, we must forego the next gas-guzzler and the plasma television for the children's room. We have to transfer pensions to pensioners. In the long run, this is only possible if we do not economize with fewer and fewer people.

Nevertheless we should now engage in a growth debate about the nature of this growth, not whether we should renounce on economic growth. This crisis leading to such disastrous economic forecasts this week reminds us there are good and less good directions of economic development: useful and less useful products and services, predatory and long-term more acceptable exploitations of society and the environment. No one has invented an economy entirely without harmful environmental consequences. Can the economy and politics negotiate a way amid the crisis to guide this growth on more social, more sustainable and more philanthropic paths?

There are also different standards, for example the happiness of people.

All this sounds vague and hard to grasp. However there is really nothing more impractical than the past method for measuring our prosperity. Economists and politicians stare at the gross domestic product (GDP) in which statisticians add up everything produced and offered in a national economy - as long as it has a price. This is an outrageous working model that creates a huge number of problems.

What about bringing up children and nursing? Raising children and nursing do not raise the GDP even a little. What about damage to the environment? That does not lower the GDP at all. What about more freedom and self-determination for everyone? In most cases, they are probably bad for the GDP. What about increasing social discord and criminality? They have no effect. But wait a minute! When a hooligan throws a brick, the glasscutter is called. Then the GDP grows.

Still we orient our policy in this nonsense. When banks post enormous profits thanks to their creative accounting or financial acrobatics, we gratefully enter that in the books as a part of a rising GDP. We dedicate our education system, our sponsored research and our infrastructure to a higher GDP. The uncontrolled exploitation of the forests, soil-destroying monocultures and the disintegration of societies by overwork and exhaustion increase the GDP in the short-term and destroy the foundations of human life in the long-term. Nevertheless we celebrate countries that are ahead in GDP growth - like serious runners. Behold, China is ten percentage points higher!

Economists have long sought alternative measurements for the economy that emphasize ecology, social necessities and human happiness. These ide3as should be unearthed and transplanted at once. Better kinds of growth should be stressed - before the bad economic news is again eclipsed by the good and no one wants to hear anything about alternatives.


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