O U T O F T H E S W A M P of destruction left by World War II came the concept of gross domestic product, or GDP. Its pursuit has defined global economic strategy for over sixty years. But what has this achieved?
Literally millions of people have been freed from the shackles of poverty, with enormous benefits for humanity: healthcare has improved, literacy rates have increased and infant mortality has plummeted. We have even managed – on several occasions – to send men and women to the moon! There are, however, a huge number of people dissatisfied with the reigning model of progress. How could this be?
Inequality is greater today than at any point in human history. A study by the United Nations found that the richest 1% of people own more wealth than the poorest 95% combined. In addition, the huge material throughput required to maintain growth-based economies is starting to have consequences of its own: natural resources are becoming scarce and environmental sinks overloaded (indeed, anthropogenic climate change may well prove to be the greatest challenge our species ever face).
We are essentially confronted with a paradox: on the one hand we must stimulate growth in order to reduce poverty and maintain economic stability, whilst on the other hand we must constrain growth in order to avoid crossing dangerous ecological limits. Could this be the ultimate Catch-22? Or, is it possible, as I believe, to reinvent growth in a way that is both environmentally sustainable and socially equitable?
To reinvent growth in order for it to respect the principle of environmental sustainability, we would need to reduce the ecological burden of growth to within acceptable limits. This could be achieved through two measures: firstly, more environmentally sustainable technologies, such as low (or even zero) carbon energy sources, should be adopted on a global scale; secondly, natural resources, such as fisheries and forests, must be harvested in a way that maintains long-term ecosystem viability.
To reinvent growth in order for it to be socially equitable, the wealth gap between rich and poor countries must be dramatically reduced. This does not necessarily mean the incomes of people living in Europe or North America must decline; it only requires the incomes of those people living in Sub-Saharan Africa and South-America to increase at a faster rate. Large-scale investments in agriculture, healthcare, education, infrastructure and sustainable technologies across the developing world (alongside a more equitable system of global trade) are essential if this is to be achieved.
Since World War II, the pursuit of GDP growth has achieved huge gains in human welfare: we must now reinvent the way in which we grow to tackle the most pressing economic, environmental and social issues of the 21st Century. Although significant, the investments required to achieve this ambitious goal are manageable. The real challenge lies in achieving the necessary degree of cooperation between governments, businesses, civil society and academics to bring about change. This would not be the first time that such large-scale collaboration has been required: it was only sixty years ago, remember, that Europe was on to the brink of total destruction; today, reassuringly, the continent is home to the most peaceful, democratic and prosperous societies on earth.
Guildford, July 15th 2014