What is Growth?

The phrase quoted in this somewhat paradoxical Globe & Mail headline comes from a Merrill-Lynch strategist. The dire claim, however, is not one of economic contraction, but of slowing growth. Within dominant economic discourse, it is dogma that growth is good, and that slowing growth is bad. The influence of economists on governments is most evident when politicians espouse growth as a goal. However, from our vantage within the anthropogenic climate and ecological crisis, the idea of growth as desirable must be challenged.

From one perspective, growth is the mere quantification of the idea of progress, and to understand this we must consider both the statistical expression of “The Economy” and the material transformations accompanying the numbers. Timothy Mitchell argues that The Economy, as an affective object, first emerged in the 1930s.22Timothy Mitchell, Rule of Experts: Egypt, Techno-Politics, Modernity (Berkeley, CA: University of California Press, 2002). He notes that it was cobbled together from practical and theoretical entities with longer histories—including the idea of growth.

Economic growth is now a synonym for improvement, and it has become inherently normative. But improvement is always a subjectively assessed outcome: Is a new state preferable to the prior state? Growth means bigger or more, which can be assessed objectively: Is the child heavier this month than last month? Did this field produce more rice this year than last year? Are the workers manufacturing more widgets per week this month than last month?

One of the most substantial moments in the construction of The Economy was the invention of national accounting, the first manifestation of which was the calculation of the United States’ national income. The concept of national income is primarily credited to Simon Kuznets, who issued a report to Congress in 1934 on the U.S. national income for 1929–32.33Simon Kuznets, “National Income, 1929-32,” National Bureau of Economic Research, 1934, https://www.nber.org/chapters/c2258.pdf. Year-to-year changes in national income allowed him to express the widespread suffering we now know as the Great Depression. National accounting measures are now widely deployed to assess rates of economic growth.

Epistemic breaks are rarely—if ever—clean, crisp demarcations. Instead, we can trace parts and varieties of what become dominant institutions, ideas, or practices. For decades, before Kuznets developed national accounting, when economists mentioned growth, they primarily meant increases in industrial productivity due to changes in systems of production; this meaning was one of the threads woven into The Economy.

Change in gross domestic product (GDP) is the dominant method for measuring growth. In a prior column, I noted the construction of real GDP, which is designed to measure The Economy, whereas nominal GDP is the relatively straightforward addition of value added, denominated by the national currency. However, this is subject to changes in prices, which, according to economists, can occlude actual changes in economic activity. Real GDP is thus intended to remove the effects of price changes, part of a longstanding effort by economists to theoretically and analytically separate money from those social processes deemed “economic.” And for the economists, statisticians, bureaucrats, politicians, and pundits who deploy real GDP figures, they are shorthand for general well-being.

Real GDP is now calculated for every country on Earth, which makes possible the calculation of a World GDP. Not content to identify growth since the invention of national accounting, figures have been calculated going back to 1 CE, and earlier.44“Maddison Project Database 2018,” https://www.rug.nl/ggdc/historicaldevelopment/maddison/releases/maddison-project-database-2018. Bradford J. Delong has gone even further, constructing real GDP figures for the entire world back to 1,000,000 BCE (https://delong.typepad.com/print/20061012_LRWGDP.pdf). Such calculations solidify the conjoined ideas of The Economy as a timeless object and growth as a timeless process. They also tell a tale of long-term economic stagnation until the late 1700s; since then, apart from relatively short—though painful—periods of decline or stagnation, economies have grown dramatically.

The late-1700s take-off points to the material and energetic actualities of the growth expressed by retroactively calculated GDP. The image of growth expresses the mass intensification of burning fossil fuels, which also created the atmospheric conditions for our current climate crisis. Humans have continuously developed technologies that made available more and more energy for our use—fire, domesticated animals, waterwheels, windmills, etc.—and each increase in the energy available contributed to population increases and cascades of socio-material transformation. Between 100 BCE and 1800 CE, per capita energy capture increased by an estimated 23 percent. Then over the next 200 years, the per capita energy capture of wealthy Western countries increased over 500 percent.55See Ian Morris, The Measure of Civilization: How Social Development Decides the Fate of Nations (Princeton, NJ: Princeton University Press, 2013).

The Earth, as a material object, is fixed. All economic activity involves some degree of remixing and reordering of that fixed material. As humans harnessed more and more energy, we were able to mobilize and transform the Earth’s materials in new ways at an astounding pace. Consider the invention of the Haber-Bosch process, which takes nitrogen from the atmosphere to produce ammonia, drastically increasing the artificial fertilizer available for growing crops, thus increasing yields; food costs subsequently fell and populations increased.66See Vaclav Smil, Enriching the Earth: Fritz Haber, Carl Bosch, and the Transformation of World Food Production (Cambridge, MA: MIT, 2001). In effect, humans harnessed energy that allowed us to turn atmospheric nitrogen into more humans.

However, the most profound and consequential transformation of materials has been the extraction and combustion of fossil fuels—the key to all other transformations, as it made available the energy required to perform them. Fossil fuels powered over two centuries of growth, producing more commodities and circulating them to ever more people. By accounting for the production and distribution of these commodities, we could tally up the value being generated as purely positive. However, we now know that the emissions produced from burning fossil fuels were generating other, atmospheric transformations that were not being measured and accounted for.77Unfortunately, for reasons of space, I’ve had to exclude the processes of colonialism, which were also complicit in the growth of Western economies. For more on the entangled relationship of environmental destruction and colonialism, see Heather Davis and Zoe Todd, “Decolonizing the Anthropocene” in the Grafting issue of this broadsheet. In economic parlance, they were externalized.

As noted above, the construction of “real” measures is intended to remove the effects of price changes as part of an effort to separate money out from The Economy. However, it is money and prices that connect the statistical expression of The Economy and the accompanying material transformation. Transformations are assessed by the money they attract.

Money flows toward externalizing transformations, and accountings of the monetary flows are aggregated into GDP. Growth expresses a preference for the new state over the previous one, but participation in the assessment process is not evenly distributed.88Jonathan Nitzan and Shimshon Bichler, Capital as Power: A Study of Order and Creorder (London: Routledge, 2009), http://bnarchives.yorku.ca/259. As such, growth disproportionately expresses the preferences of the wealthy, who depend on widespread ignorance of unaccounted costs both unintentional and willful. The existential threat of the climate crisis, as well as other environmental disasters unfolding both slowly and rapidly, thus call into question all past growth. At whose expense did our economies grow?