What They Tell You

Economic growth is essential for prosperity. More growth means more jobs, higher living standards, and the ability to solve problems. GDP growth is the best measure of progress. Without growth, economies stagnate, unemployment rises, and societies become unstable. Growth allows us to have more without taking from others.

What They Don’t Tell You

Growth as measured by GDP is a poor indicator of welfare. Much of what growth measures doesn’t make us better off. Infinite growth on a finite planet is mathematically impossible. The pursuit of growth has enormous environmental and social costs. And for wealthy societies, more growth doesn’t make people happier.

The Growth Imperative

Modern economies are structured around growth:

  • Politicians are judged by GDP growth

  • Central banks target growth

  • Stock markets expect growing profits

  • Pension systems assume growing assets

  • Debts are payable only with growing incomes

This makes growth not just a goal but a necessity—a treadmill that can’t be stopped.

What GDP Measures (and Doesn’t)

GDP measures the monetary value of goods and services produced. But:

It counts bads as goods: Car accidents increase GDP (medical care, car repairs). Pollution increases GDP (cleanup costs). Crime increases GDP (security spending).

It ignores goods without prices: Unpaid work (childcare, housework) isn’t counted. Volunteer work isn’t counted. Nature’s services (clean air, water purification) aren’t counted.

It ignores distribution: GDP can grow while most people get poorer if all gains go to the top.

It ignores sustainability: Depleting resources counts as income, not asset destruction.

Robert Kennedy famously said GDP “measures everything except that which makes life worthwhile.”

The Environmental Impossibility

Endless growth on a finite planet is physically impossible:

Resource limits: Even with efficiency gains, perpetual growth eventually exhausts finite resources.

Waste limits: Every economic process produces waste; perpetual growth produces perpetual waste accumulation.

Energy limits: Economic activity requires energy; perpetual growth requires perpetual energy increase.

Carrying capacity: Ecosystems can absorb only so much human impact.

Can we “decouple” growth from environmental impact? Relative decoupling (less impact per unit of GDP) is possible. Absolute decoupling (growing GDP with shrinking total impact) hasn’t happened globally and may be impossible at the scale needed.

Growth and Happiness

For poor countries, growth clearly improves wellbeing. But above a certain threshold:

The Easterlin Paradox: Rich countries aren’t happier than poor ones (above a threshold). And getting richer over time doesn’t make countries happier.

Adaptation: We adapt to higher income, requiring ever more to maintain satisfaction.

Social comparison: If everyone gets richer, relative position doesn’t change, and status competition continues.

Time pressure: Growth often means working more, not enjoying more.

For wealthy societies, what makes people happy (relationships, health, security, purpose) doesn’t require more growth.

Who Benefits from Growth?

In recent decades:

  • Most gains have gone to the top 1%

  • Middle-class incomes have stagnated

  • Working hours haven’t fallen despite higher productivity

  • Job security has declined

Growth serves capital owners more than workers. The “we all benefit from growth” story breaks down when we ask who exactly benefits.

The Alternatives

Steady-state economics: An economy that maintains itself without growing, like a mature ecosystem.

Degrowth: Deliberately shrinking the economy in wealthy countries to create ecological space.

Beyond GDP: Measuring genuine progress—health, education, leisure, environmental quality, equality.

Prosperity without growth: Focusing on what actually makes life good rather than on producing more stuff.

The Political Economy of Growth

Why is growth so hard to question?

Capitalism requires it: Profits must grow to reward shareholders. Debts require growth to be repaid.

Politics requires it: Growth provides something for everyone without redistribution battles.

Legitimacy requires it: Governments that don’t deliver growth lose elections.

Interests require it: Whole industries depend on perpetual growth.

The Transition Challenge

The challenge isn’t just intellectual—it’s structural. Our entire economic system presupposes growth. Pensions, debts, investments—all assume perpetual expansion.

Transitioning to a post-growth economy requires:

  • New measures of success

  • Debt restructuring

  • Work sharing (shorter hours rather than unemployment)

  • Universal basic services

  • Strong redistribution

The Question We Should Ask

Instead of “how do we grow faster?” we should ask “what do we actually need more of?”

More healthcare, education, clean energy, ecological restoration? Those can grow. More SUVs, fast fashion, planned obsolescence, financial speculation? Maybe not.

The goal should be good lives, not growing GDP. These aren’t the same thing.