Tuesday, November 24, 2009

More on growth

As an addendum to yesterday’s post, I want today to throw in a quick thought exercise on GDP growth, in the form of a metaphor. Economics has defined growth in a very clumsy way as expanding GDP. If we see socioeconomic models as subsystems of Earth’s ecosystem, and not as theoretical ivory towers looking down on and removed from the world “out there,” we quickly recognise that economic growth occurs at the expense of other subsystems of that ecosystem. In another system – the human body – when one of its subsystems grows perpetually, we call it cancer. While it depends on perpetual growth of its own produce (goods and services to be consumed by itself), economics can only be “cancerous,” from the point of view of the system which houses it. It can only see perpetual growth as “healthy” if it ignores the ecosystem which hosts it.

Ignoring the ecosystem is flat out stupid. It can indeed be made sick in the way a human body can be made sick, it just takes a bit longer, and is far harder to diagnose. It can “heal” itself though, right itself, find a new equilibrium, at the expense of the cancer that ailed it. This rediscovery of some new equilibrium would likely destroy our civilisation. Reassessing economics’ definition of growth is, for this reason, somewhat of a priority.

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