What we need is not constant ‘growth’ or complete ‘degrowth’ but intelligent economic development

In his recent article, John Hills offers some helpful reflections about the political future of the LibDems. As John writes: ‘It is necessary to go beyond individual policies and good ideas, to find our narrative; not just of what we believe, but more tangibly, what we stand for.’ I couldn’t agree more. The most intriguing aspect of John’s piece is his suggestion that while we have recently focused on disillusioned Conservatives, we would be wise to reach out to other political tribes, particularly Green-facing voters. John is right to say that LibDems continue to tell a good story about the environment (see our recent campaigning on the state of the UK’s rivers). He is also right that we should focus on what is distinctive in our offering; a kind of pivot and diverge strategy. But we have to be careful concerning the divergence aspect of the equation.

Take the thorny issue of economic growth. John notes: ‘We should be clear that as Liberals we will promote growing economic opportunity and social mobility.’ This, says John, contrasts markedly with the Green Party’s recurrent focus on degrowth policies. My worry however is that in an effort to stake out political space we may be getting trapped in false binaries. For Liberals the key tasks of politics are humanistic rather than purely economic. The chief goal of Liberalism is to secure the most equitable conditions for the flourishing of human personality, within the confines of a fragile world. In accomplishing this task, it doesn’t seem to me that the choice is between perpetual growth or blanket degrowth. Given that infinite growth is impossible (and pretending that it is possible is doing irreversible damage) this doesn’t seem to be a prudent commitment. We should also acknowledge that politics cannot be conducted purely on the basis of growth. The words of the old Liberal Party’s Report on the Environment (1972) seem apt:

‘Once the basic needs of food and shelter are met, man’s greatest satisfactions are to be found in love, trust and friendship, in beauty, art and music and in learning, none of which are served by the mythology of growth for its own sake’ (p. 3.)

This must surely be right. Even if the dreams of perpetual growth came to pass (they can’t), it would likely leave many fundamental human needs unmet. As Bobby Kennedy observed long ago, there is a great deal that GDP doesn’t measure. We need to decide what we really want, not just pile up riches indiscriminately. If this is broadly the Green view, Liberal Democrats should not be embarrassed to agree with it. But, given the present structure of our economy and our present demographics, a blanket policy of degrowth would make the rapid deindustrialisation policies of the 1980s look benign. Poverty would likely explode, placing considerable stress on the political system, while simultaneously sapping the ability of the state to meet people’s shared material needs. What we need is not constant ‘growth’ or complete ‘degrowth’ but intelligent economic development. In the years ahead, some activities need to intensify (decarbonisation of workplaces and supply chains, the adaption of infrastructure, the recycling and conservation of resources) while other forms of activity must drastically shrink (industries based around carbon extraction, soil and water depletion, and of course burning). Alongside this transition, we must contend with multiple deprivations (ironically stored up in past scrambles for growth) including insecure jobs and bad housing. Overshadowing these is our ageing population. Somehow we must balance a redirection of the economy with a greater degree of social justice. In the short run, a considerable amount of redistribution may be required to make these undertakings converge.

As we leave behind ingrained economic habits, we can begin to recast education, employment and leisure. Artificial intelligence technologies (assuming we have stable means of powering them) may well assist in this reformation of institutions and services. Walking down the streets of a society which has exchanged generalised growth for focused development will probably look and feel very different from the streets of today. There will doubtless be a noticeable lack of short life disposable goods. We may mend considerably more than we spend. There might be less luxury. But it should be our intention that the opportunities for joy, learning and community are considerably strengthened. Both Mill and Keynes hoped for a society of steady sufficiency, a culture that had altogether thrown over the search for ever enlarged material riches and instead sought richer human lives. In such a world, we shall, said Keynes, ‘value ends above means and prefer the good to the useful.’ It remains my view that this tender humanism of present contentment over speculative fantasy can powerfully resonate with Green voters.

* Ben Wood is currently an Academic Support and Skills Tutor at the University of Leeds and a Project Editor at the John Stuart Mill Institute. He is a member of Leeds Liberal Democrats.

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15 Comments

  • Many thanks Ben for your thoughtful and eloquent response here. One of the things I think is really lovely about Lib Dem Voice is the freedom we have to ground opinions on policy or strategy, to philosophy or zoomed out views about the material and spiritual state of the world.

    So here is my own zoomed out take here…

    I don’t believe in perpetual growth, and I certainly don’t believe in degrowth. What I actually believe in is optimisation. For sure, the available resources we have on Earth are finite, but I think human beings have a remarkable capacity to optimise the value of the resources available to us, through continued growth in knowledge and technology. Continued economic growth would a surprising consequence of that, not because perpetual growth is real, but because we are nowhere near at the limits of our ability to optimise uptake of resources.

    So for me a more accurate macro-economic metric we should be promoting is not so much economic growth but economic complexity. Economic complexity is a measure of skills and knowledge in a community. According to https://atlas.cid.harvard.edu/rankings the top five most economically complex countries are Japan, Switzerland, South Korea, Germany, and Singapore. The UK came eighth in 2021, which isn’t too bad, but I worry that we will fall backwards without an outward facing, pro-skills, pro-science, pro-education agenda over the coming decades.

  • Jenny Barnes 22nd Oct '24 - 10:32pm

    Boeing and Airbus have a combined total of 15,000 passenger aircraft on order. Someone is expecting there to be an awful lot of growth for there to be sufficient passengers for that lot. Never mind the fuel demands.

  • David Garlick 23rd Oct '24 - 10:34am

    Agree with this very measured and, in my view, accurate assessment. Unfortunately politics rarely looks further ahead than the next election and the climate catastrophe will make survival the only topic of note.

  • Thank you John and Ben for developing what feels like a very important and refreshing conversation. It is difficult to imagine it happening in the Conservative and Labour parties. Politicians often talk about economic growth as if it were about jam tomorrow and tomorrow never comes! It is good to have human happiness and a richer quality of life for all as priorities for the 21st century but related to principles articulated by Liberal thinkers of yesteryear.

  • Thanks John for your reflections. I think we’re very close in our perspectives on this topic. And thank you Jenny, Geoff and David. I hope this conversation can continue, as I’m convinced. it could lead to some very rich policy shifts.

  • Jenny Barnes 23rd Oct '24 - 1:42pm

    Whatever the economy produces requires energy. One important thing is fertiliser, produced by the haber bosch process – presently using methane as the source of hydrogen to combine with nitrogen from the air to make ammonia and nitrogenous fertiliser. I’ve seen suggestions that on average half the nitrogen in humans alive now comes from fossil fuel generated fertiliser. For “growth” there needs to be an increase in energy used. Which is going to be difficult as fossil fuels are gradually getting more energy expensive to acquire, as are most of the ores (copper, lithium etc) that we need. In the old days you stuck a pipe in the ground in Pennsylvania and millions of barrels of oil came out. Now you need a deep sea platform or a complicated and expensive fracking rig – or a nuclear power station to heat the tar sands. So growth is probably impossible, and we have had very little since about 2008. However, as suggested, we can still do things. A bicycle gets one from place to place very well – a 2.5 tonne SUV is not essential, for example.

  • Great article Ben. I agree we need to stop our obsession with ‘growth’, especially as defined by GDP, or even ‘degrowth’ and focus on what we need to live well without depleting finite resources and/or placing undue pressure on our environment.

    I’m sure most people here know this, but in a world obsessed by GDP we need to keep reminding ourselves that there are a lot of things that make life worth living that do not contribute towards GDP and plenty of things that either make things worse, or are a symptom of something bad, that boost GDP. GDP for GDP’s sake is something the markets demand, but relying on ever increasing GDP to enable society to function is IMO, is not that different to imposing a pyramid scheme on society with today’s generation swindling future generations of their resources.

    The markets get twitchy at any attempt to challenge that norm, not to mention media interests, so I have some sympathy with Labour, but I am concerned at their apparent obsession with boosting GDP at the expense of nurturing the bits of the economy that support ordinary people to live good lives, or even small businesses. Expanding airport capacity, but limiting HS2 etc.

  • Christopher Haigh 23rd Oct '24 - 2:55pm

    If a society has satiated it’s need for goods and services. the only way to get labours mantra of economic growth is by continually creating new and unsustainable wants.

  • Great discussion, to which I would add the following:
    The further shift from goods to services means dropping the snobbery, and an intelligent economy might embrace ‘inefficiency’. New jobs are sneered at, just as new universities are sneered at, and many service jobs such as care work are chronically undervalued. A new job is not automatically ‘high quality’ if it involves spreadsheets, and ‘low quality’ or ‘inefficient’ if it means answering the phone rather than forcing people to use online portals.

    The taxation and benefits system creates artificial growth by forcing both parents to work whilst someone else is paid to look after their children, at the key point in a child’s life when making them feel secure could solve a host of developmental and societal issues down the line. People bringing up children, in whatever family shape, need a break.

    Land reform is the key to the housing problem which drains so many households of money and hope. This issue has been discussed at length elsewhere on LDV.

    Liberals believe in free trade, but it’s not free if it enslaves people born in countries with soft currencies and destroys jobs and livelihoods at home. Even with maximum efficiency in the UK, it will always be cheaper to run call centres in India or make things in China when labour costs are converted to pounds. The answer to that would be to adopt Keynes’ idea of a single world currency mechanism – Bancor – as the means of exchange.

  • Tristan Ward 24th Oct '24 - 9:34pm

    “Liberals believe in free trade, but it’s not free if it ………….. destroys jobs and livelihoods at home”

    Yes it is. The whole point of free trade is that it enables goods and services to be produced in the most efficient (ie cost effective) place and thus makes those goods and service cheaper for consumers which is a good – see the liberal loaf/tory loaf comparison. That may put some producers out of business and make their employees redundant but those goods and services are produced elsewhere. That’s capitalism, and liberals certainly accept capitalism.

    The much bigger problem for liberals is where the reduction in costs of production are achieved by putting them in unacceptable places – on slaves to take an extreme and topical example – or without internalisation of environmental or other significant costs which are in consequence dumped on the commons.

  • John Medway 25th Oct '24 - 5:12pm

    A number of participants in this so far excellent discussion have ruled out de-growth as an option. That is understandable. Degrowth is an intensely unattractive prospect for most people – and especially for politicians struggling to balance delivery of well-being for all, environmental protection, national security, financial stability and their re-election.

    A question in my mind is whether we will be able to avoid de-growth in the sort of world that includes Vladimir Putin, Donald Trump, Nigel Farage and today’s Conservative Party. What will happen if at some point, after a few more years of leisurely action on climate change, we wake up and find that we have passed the point where we can prevent a climate catastrophe solely by an orderly and painless reduction in emissions? Will technology and minor behaviour change be enough to deliver all the emission cuts we need and in time? Will we face up to a possible need for emergency action involving real sacrifices but also, perhaps, a new appreciation of the sort of joys that economic growth alone doesn’t offer? Or will we carry on as before and wait for climate change to devastate our economy, along our civilisation and, later perhaps, even our existence as a species?

  • Peter Chambers 26th Oct '24 - 12:29pm

    @Jenny Barnes
    > Boeing and Airbus have a combined total of 15,000 passenger aircraft on order…

    Very good point. Industry speakers talk of a tripling of traffic by 2050 but also meeting their Net Zero obligations … with no detail of how this is to happen. The do this because margins are low, and only revenue growth can lead to profit growth and dividend growth. Yield management is used to squeeze in every passenger. I am very glad I am no longer required to travel on planes on business. We should also note that the only major technical innovation in decades is winglets. Turbofans were available in the 70s – RB211 – and preceded by turbo-props. Fuel is still JetA1. Speeds and altitudes are about the same. Unified traffic control offers marginal gains at best. Short-haul should be replaced by electric trains where possible, the carbon argument is clear. Half the energy required is for lift, half for drag. Big heavy things flying are energy intensive and always will be.

    When discussing aviation policy a good question to start would be, “do you see aviation activity rising or falling in the future? why?”.

    Some of my relatives work in aviation. It is their livelihood. I do not talk to them about it at family events. Many voters derived their livelihood from aviation. Logically an environmentalist would ask them to give that up.

  • @John, you raise a good point that if we aren’t serious about managing the economy with consideration of our future needs, we’re going to find ourselves in the situation of being forced into much more drastic action with fewer and less palatable choices. A stitch in time and all that.

    My view is that we need to stop thinking of ‘the economy’ as a blob that’s working well for us based on a blunt measure of everything within it. Some goods and services that contribute to GDP genuinely make life better for all of us, with minimal or arguably negative impact on the planet and those around us. Meanwhile, others are much more damaging with no value to anyone, except a few individuals.

    Except for vested interests, very few people still believe in “Trickle Down Economics”, so why are we still accepting that boosting GDP by making the minority rich by causing harm to the majority, including future generations, is something governments should be chasing?

  • @Peter – it’s a familiar conundrum. Family events are a bit different, because sometimes the old ‘don’t discuss religion or politics’ is the right policy, but is deciding to become an airline pilot much different to picking a career as a sales rep for a tobacco company?

    We’re socially conditioned to ooh and ah when someone tells us they are going or have been on holiday, and not doing so comes across as mean or petty. Being well travelled is still something to brag about.

    When you are at a wedding and people casually talk about taking internal flights because the train is so much more expensive, is it really the time to say ‘but I know you can easily afford the train’, especially when you know money is a bit tighter for others present. At best you might muster a comment about the disparity in fuel tax, but you’ll make little headway if you attempt to talk about externalising costs.

  • Jenny Barnes 26th Oct '24 - 10:32pm

    It has become possible to operate 2 engine aircraft on long sectors over water, with the increased MTBF of the latest engines. And 2 engine aircraft ( eg the 787) are significantly more efficient in seat miles per fuel used than the 4 engine 747. But these marginal gains are nowhere near enough to support even our current use of aviation, let alone a big increase using sustainable fuels. Long haul aviation is probably the best way to move people long distances – ocean liners use much more fuel – but it looks like that sort of travel will become a once-in-a-lifetime or less event.

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