During the 2010s, the GDP rose, but without lifting all Americans or even most Americans to a better life. A weak recovery from the 2008-2009 financial crisis lurked below gradual GDP increases. Covid-19 has hammered this message home. Tens of millions of jobs lost in the service sector have revealed how precarious labor had become for so many.
National GDP growth rates likewise held little meaning for low-wage workers with few social and legal protections, such as in-home caregivers and slaughterhouse laborers. But the way the pandemic has made such realities undeniable also offers opportunity. The time is ripe to reimagine our economic life.
There will, of course, be an understandable desire to return to normal after covid-19. Leaders will once again suggest that GDP growth will resolve many social ills and pat themselves on the back as GDP increases. But accepting this view would be a mistake. To truly build an economy that promises a better life for all Americans, the Biden administration will need to focus less on growth and its potential trickle-down benefits and more on economic justice and sustainability.
We have a history to draw upon in this effort. In the 1940s, 1950s and 1960s, growth was considered to be the core role of economic policy. But during the late 1960s and 1970s, some experts began to question this way of thinking. The energy crises and geopolitical tensions over oil, popular (though misguided) fears of population growth, environmental degradation, student movements that challenged the Cold War status quo and the persistent inequalities between wealthy and poorer countries frustrated critics, who pointed to how a preoccupation with aggregate growth obscured key inequities or weaknesses.
These growth critics inveighed against the economic status quo. British economist Dudley Seers, for instance, showed that the pursuit of economic growth led policymakers to give priority to economic productivity over leisure and social well-being for people.
Pakistani planner and economist Mahbub ul Haq lamented how the wealth generated by rapid growth in his country during the 1960s went largely to the country’s wealthiest families, exacerbating inequality when many believed the exact opposite would happen.
Ecological economist Herman Daly denounced how economic growth eroded the ecological basis for human existence, straining ecosystems and exacerbating environmental degradation.
Social scientist Marilyn Waring exposed how conventional measures of GDP left out the vital labor performed by women in social reproduction — housework, raising children — and left them invisible and unaccounted for in stories of national progress.
The growth critics found a receptive audience amid the upheavals of the 1970s. Discussions about the limits of growth — typified by the best-selling “Limits to Growth” report published by the Club of Rome in 1972 and the 1973 oil shock — reached everyday citizens. Growth critics became influential. Some, such as Daly, testified before Congress about the limits of growth. Others took high-level positions in governments and international organizations.
Seers led the U.K.’s International Development Agency. Haq worked for the World Bank and the United Nations. Waring served in New Zealand’s parliament and on the board of its central bank.
The growth critics had ideas about new metrics that could displace GDP as a measure of economic health. Seers advocated for measures of life expectancy and social opportunity in lieu of economic aggregates. Haq spearheaded the creation of the Human Development Index. Waring wrote and spoke widely about the need for a feminist economics that properly accounted for all labor.
In each case, growth critics argued that new numbers were necessary to galvanize public attention toward new values — social inclusion, minimizing economic and gender inequalities — and challenge the false faith in growth as a cure-all for social and political problems.
Crucially, the growth critics recognized that real transformation required more than just new metrics. They knew the global distribution of power needed to change, too. Seers, Haq, Daly and many others embraced calls for international redistributive justice, supporting the developing countries efforts’ to rewrite the rules of global economy during the 1970s, such as the call for a New International Economic Order.
The new world presaged by these projects did not come into being. In the 1980s, a resurgent faith in growth swept across the world. The discovery of new sources of oil, the diversification of energy sources and a restructuring in global oil markets assuaged fears of acute resource scarcity. To boost production and profits, leaders embraced trade liberalization and privatization of state assets, and curtailed regulations on the financial sector. Policymakers also aggressively targeted inflation to boost consumer spending. During the 1980s and 1990s, aggregate growth rates picked back up.
GDP growth, however, concealed troubling trends. In the United States, for instance, while aggregate growth increased, so, too, did inequality. The new approaches to growth disproportionately favored the wealthy. Wages stagnated for most workers, while a tiny portion of the population captured most of the gains. Large corporations hid many of their gains in offshore tax havens, too, effectively shielding many profits from national taxation.
And all the while, carbon emissions soared and the global climate emergency came into clear view. Beginning in 2014, life expectancy for Americans began to decline, even though GDP continued to grow. Though the growth critics persisted, the new economic and political environment left advocates with few avenues into power and gave leaders few incentives to embrace their arguments.
To redress our contemporary crises, we should learn from this history. Today there is a renewed interest in criticizing growth and the use of indicators such as GDP. Creating new metrics for defining well-being, as some international organizations and countries have begun to do, is a good start.
But new numbers are not enough. They need a new politics to sustain them. And it must be an international politics. Climate change is a global problem, after all, as is the international network of tax havens and offshore banking that sustains domestic inequality. No one country can move beyond growth within an international order that still prioritizes it above all. Only through new forms of cooperation can a better world come into being.
As past growth critics recognized, the longer we place hope in growth to solve our ills, the longer we miss opportunities to redress the specific problems that bedevil our world.