Growth Above All

Yesterday, I invoked a phrase borrowed from Jason Epstein in writing about the "unbreakable addiction" of the World Economic Forum to economic growth. Where substances are concerned, one is addicted when the need to get a "fix" of that substance excludes any other need, even those necessary for sustaining life. My metaphorical use of the term "addiction" extrapolates from substances to concepts. The World Economic Forum is basically a pulpit from which those who have been properly ordained (usually based on a metric such as personal net worth) may preach that economic growth will solve all of the world's problems. This may seem a bit anachronistic in the face of data that support the premise that economic growth can be linked to many of the conditions of the climate crisis, but those who are sustained by their wealth and power need not worry about being logically out of step with the rest of the world.

Fortunately, every now and then "the rest of the world" manages to get its hands on a reality check. After reading Al Jazeera's account of our Congressional investigation of Toyota, I realized that all of those defective automobiles may have provided such a reality check. Consider the written statement released by Akio Toyoda prior to facing our Congress. Beyond the usual gestures of contrition were some remarks that are likely to be taken as heretical among the World Economic Forum congregation:

We pursued growth over the speed at which we were able to develop our people and our organisation, and we should sincerely be mindful of that.

Quite frankly, I fear the pace at which we have grown may have been too quick.

That heresy was reinforced by the testimony given yesterday by Jim Lentz, who is in charge of Toyota's United States operations:

I think we outgrew our engineering resource. And the most important thing is that we lost sight of the customer.

I suspect that this was the comfort level he found for declaring that the priorities of shareholders, who never wanted anything other than a return on investment, were allowed to exceed those of not only the customers but also all those involved in the production chain of what the customers were buying; and that premise is also the basis for Toyoda's statement.

We might do well to think of the shareholders as the belly of a corporate body, rather along the lines of the parable related by Menenius Agrippa in the first act of William Shakespeare's Coriolanus. While it is true that the belly consumes all (and often seems to have no priority other than to demand more), without its consumption none of the other members of the body would be able to function. The punch line of Shakespeare's parable is that, when the belly completes its digestive duties, all that remains for it is what is ultimately ejected from the large intestine. Shareholders would argue that what is left for them is the increased value of their shares; but that value is nothing more than a necessary fiction of convenience (from Niall Ferguson's optimistic point of view) or a manifestation of "naive extrapolation and collective magical thinking" (in John Kay's pessimistic one). From Shakespeare's point of view, there is more substance in our excreta than in those shares!

Nevertheless, the corporate body of Toyota needs its shareholders as much as the human body of Shakespeare's parable needs its belly. However, in the healthy human body the activities of the belly are regulated by those of the brain. By analogy, that addiction to growth upon which the World Economic Forum sustains itself, is addling the corporate brain in much the same way that substance addiction damages the human brain. Back when our economic crisis was at its worst, a few isolated voices kept trying to ask whether or not the "real economy" would be part of any of the recovery strategies being proposed. When we look at Main Street, rather than Wall Street, we see that such a "real economy" is still being neglected if not entirely ignored. That is because the "growth pushers" are still peddling their stuff on Wall Street; and, until we drive those pushers off the street, the addiction they promote will flourish. The rest of us will be stuck with a belly no longer capable of nourishing the rest of the body while going about its business of consumption and excretion.