Infinite Growth on a Finite Planet
To infinity and beyond, minus the space travel part
The first person to spend a few hours turning a rock into a sharp rock kickstarted economic growth.
Since then, we’ve seen all kinds of incredible improvements to our lives. Higher life expectancy, cool technology, exciting new newsletters — modernity has some pretty solid perks.
The downside to all of this has been the staggering rise in the damage we’ve done to our planet and just about everything living on it. From turning the Thames into a sewer through to the ongoing Climate Crisis caused by burning fossil fuels to power the factories to run the machines to Make Stuff and Move Things, we’re inching closer and closer to a breaking point.
Years ago we were talking about running out of oil — today it’s scarier to think we might find even more of the stuff.
So it’s fair to ask if there’s any point in growth when getting where we are now might have already pushed us over the edge. But do economists just awkwardly ignore this whenever talking about the economy?
WHAT EVEN IS GROWTH?
When economists talk about economic growth, they generally mean that Gross Domestic Product (GDP) is going up. That means we’re spending more in total on:
The amount of consumption (food, taxis, Substack subscriptions and most other ‘regular’ spending on brand new goods and services)
The amount of investment (machines, business software, building new factories — NOT buying shares or putting money into a pension)
The amount of government spending (paying for actual goods and services — fighter jets and teacher salaries, but not giving people money directly)
We then add on how much the country is exporting (to track when something’s made here but used elsewhere) and subtract anything imported (same thing, but in reverse).
All of these things are about the economy being more active — if we discovered gold/oil/NFTs buried under Stonehenge, GDP would only go up if someone dug them up and sold them.
In the end, it’s really that blunt — a fresh field of solar panels and a new coal-fired plant both add to GDP, as will the hospital or arms factory they might power.
There are still loads of things GDP isn’t good at measuring — unpaid housework, digital services, the harm we do to our environment. As Bobby Kennedy put it in 1968:
It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials… it can tell us everything about America except why we are proud that we are Americans.
The good news is, economists have spent years looking at the different ways it doesn’t work and what we should be focusing on instead. For example, how do you value something without a price tag?
But GDP’s still pretty good at reflecting what makes the US a big economy (even if it isn’t very equal) while Moldova is pretty small. It’s not surprising that its earliest roots go back to questions like “can we beat up the Dutch?”, and the fact that governments tax things like incomes and spending mean GDP gives a sense of how much money could be available.
All of this means that GDP is a lot like a challenge grade. It isn’t surprising that the US can spend more on health than Burundi or Tajikistan — the real stories lie in why it gets worse results than other rich countries. It’s also questions like why the Dominican Republic grew so quickly while Haiti didn’t, or whether it’s safe for finance to make up almost 10% of your economy. It’s the most basic way of measuring how much the country can actually do.
WHY BOTHER WITH GROWTH?
Even in well-off countries, we still broadly want more things that can’t just be taken from someone else. More houses in the places people want to live, more bike lanes and public transport, new exciting meat substitutes. These things aren’t separate to the economy and, made right, can even help us live more sustainably.
And when most people across the world live off of less than $30 a day, it’s important that they can escape poverty and get the same standard of life we’d expect for ourselves. If we somehow took all the world’s GDP and spread it equally, that’d be about £14,500 per person — roughly the same as China or Botswana.
And even if GDP per person isn’t exactly the same as the average income, they’re not that far off from each other.
TO INFINITY AND BEYOND?
But even if we need growth to fuel our lives, isn’t there an upper limit? Can we go on forever without running out of metal, farmland or breathable atmosphere?
There’s no reason to think we couldn’t destroy the planet if we really wanted to. But look back to that first bit about how we measure GDP — it’s the value of what we’re making, not the cost of what we’ve put in, that strictly matters.
And getting more from less is where we’ve long relied on technology and new ideas. The leap from burning animal fat to LED bulbs means we can now light our homes with less effort than ever before. Even when you account for all our stuff being made overseas, many countries are growing even as their CO2 emissions are falling now we can use cleaner energy.
So the hope is we can keep switching from the resources we can’t afford to keep using (e.g. fossil fuels, fresh water) to the ones we can (using renewables to desalinate seawater), and create even more value from them than before. It’s not strictly going to infinity, but might work up until the sun explodes.
SO ALL’S WELL AND GOOD WITH GROWTH?
Oh, God no. Even if sustainable growth is possible, we still have a 1.5°C warming target and no guarantee we can reach it before we’ve done irreperable damage to the world.
Those first people to use stone tools ended up wiping out Glyptodons, Cave Bears and Irish Elk. Maybe we’re more careful than them, but we need to
Economics has failed to give climate change the full attention it deserves, and a lot needs to be done to really prioritise it. Striking the balance between what we need and what our environment can afford is a challenge for us, everyone we share the planet with and those who’ll come afterwards. But economists are still out there looking at what growth should mean, preserving our planet and how we get everyone on board to stop climate change.