Why the Economy Should Stop Growing—And Just Grow Up
Listen to the political candidates as they put forward their economic solutions. You will hear a well-established and rarely challenged narrative. “We must grow the economy to produce jobs so people will have the money to grow their consumption, which will grow more jobs…” Grow. Grow. Grow.
But children and adolescents grow. Adults mature. It is time to reframe the debate to recognize that we have pushed growth in material consumption beyond Earth’s environmental limits. We must now shift our economic priority from growth to maturity—meeting the needs of all within the limits of what Earth can provide.
Global GDP is currently growing 3 to 4 percent annually. Contrary to the promises of politicians and economists, this growth is not eliminating poverty and creating a better life for all. It is instead creating increasingly grotesque and unsustainable imbalances in our relationship to Earth and to each other.
Specifics differ by country, but the U.S. experience characterizes the broader trend. Corporate profits as a percentage of GDP are at a record high. The U.S. middle class is shrinking as most people work longer hours and struggle harder to put food on the table and maintain a roof over their heads. Families are collapsing, and suicide rates are increasing.
The assets of the world’s 62 richest individuals equal those of the poorest half of humanity—3.6 billion people. In the United States, the 2015 bonus pool for 172,400 Wall Street employees was $25 billion—just short of the $28 billion required to give 4.2 million minimum wage restaurant and health care workers a raise to $15 an hour.
Humans now consume at a rate 1.6 times what Earth can provide. Weather becomes more severe and erratic, and critical environmental systems are in decline.
These distortions are a predictable consequence of an economic system designed to extract Earth’s natural wealth for the purpose of maximizing financial returns to those who already have more than they need.
On the plus side, as this system has created the imperative for deep change, it has also positioned us to take the step toward a life-centered planetary civilization. It has:
- Globalized awareness of humans’ interdependence with one another and Earth,
- Produced a system of global communications that allows us to think and act as a global species,
- Highlighted racism, sexism, and other forms of xenophobia as threats to the well-being of all, and
- Turned millennials into a revolutionary political force by denying them the economic opportunities their parents took for granted.
We cannot, however, look to the economic institutions that created the imbalances to now create an economy that meets the essential needs of all in balanced relationship to a living Earth. Global financial markets value life only for its market price. And the legal structures of global corporations centralize power and delink it from the realities of people’s daily lives.
Restoring balance is necessarily the work of living communities, of people who care about one another, the health of their environment, and the future of their children.
The step to maturity depends on rebuilding caring, place-based communities and economies and restoring to them the power that global corporations and financial markets have usurped. Local initiatives toward this end are already underway throughout the world.
“How do we grow the economy?” is an obsolete question. The questions relevant to this moment in history are “How do we navigate the step to a mature economy that meets the needs of all within the limits of a finite living Earth?” How do we rebuild the strength and power of living communities? How do we create a culture of mutual caring and responsibility? How do we assure that the legal rights of people and communities take priority over those of government-created artificial persons called corporations?
Living organisms have learned to self-organize as bioregional communities that create and maintain the conditions essential to a living Earth community. We humans must take the step to maturity as we learn to live as responsible members of that community.
David Korten is co-founder of YES! Media, president of the Living Economies Forum, a member of the Club of Rome, and the author of influential books, including “When Corporations Rule the World” and “Change the Story, Change the Future: A Living Economy for a Living Earth.” His work builds on lessons from the 21 years he and his wife, Fran, lived and worked in Africa, Asia, and Latin America on a quest to end global poverty.