Tuesday, September 22, 2009

The Growth Question

Much of my writing about economic conditions has focused on the dangers of a prevailing commitment that growth is all that matters where economic health is concerned. I have even suggested that this fixation on growth is a primary means by which the existing "economic autarky" can maintain power over "those countries not already 'developed' according to standards set by the industrialized countries." After several years of wondering whether or not I have been alone in questioning the value of growth, I can now thank SPIEGEL ONLINE for letting me know that I have some good company. This has been achieved through an English translation of an extended analysis by Alexander Jung entitled "Can Economies Function without Growth?: The Cult of GDP." Jung has been far more thorough than I ever was; but his invocation of the cult metaphor aligns nicely with my tendency to invoke the toxic Kool-Aid metaphor (whose origins trace back to the Jonestown cult). Jung's analysis also emphasizes the folly of the G20 (the prevailing "economic autarky") ignoring the problem-solving skills of Muhammad Yunus in the interest of keeping their autarky intact.

Let me offer one passage from Jung's article to encourage reading it in its entirety:

The critics of growth now advocate modesty, saying that affluence breeds contempt. Consumption, they argue, clouds our perspective on the important things in life. And it's not just young, left-leaning members of society who feel this way. "Growth is a completely useless concept to describe well-being," says Klaus Wiegandt, 70. For anyone familiar with Wiegandt's past career, this statement is nothing short of astonishing.

Until 1998, Wiegandt was CEO of Metro, a diversified German retail group that included the Kaufhof department store chain and the Saturn and Media Markt consumer electronics retail chains. Before that, he was responsible for the rise of the Rewe supermarket chain, increasing its sales tenfold. Wiegandt set the pace in the industry, based on the principle that growth was essential to survival.

At the time, regional dairies and breweries were disappearing en masse in Germany as retail purchasing became increasingly globalized. Nowadays lamb is imported to Germany from New Zealand, flowers are flown in from Africa and German lumber is shipped to China, where it is made into furniture which is then shipped back to Europe. What is Wiegandt's assessment of these developments today? "It's completely idiotic!" he says indignantly. "Later generations will ask themselves: Who were these people?"

My only misgiving is that Wiegandt may be too optimistic in assuming that there will be later generations to ask that painful question!

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