Untangling the Confusion Behind the “Growth Must End” Narrative

The New York Times recently published an interview with economist Herman Daly, a leading critic of “growth” as the “be-all and end-all of mainstream economic and political thinking”. I’m glad this article was written, because clearly expresses a popular worldview today, one that extends far beyond the question of “growth”. The publication of this interview provides an opportunity to take a closer and critical look at this worldview.

This article quotes at length sections of the interview. Each section is followed by my response. If you see any areas where you think I’m off-base, I would love to hear your response. Here goes…

In ecological economics, we’ve tried to make a distinction between development and growth. When something grows, it gets bigger physically by accretion or assimilation of material. When something develops, it gets better in a qualitative sense. It doesn’t have to get bigger. An example of that is computers. You can do fantastic computations now with a small material base in the computer. That’s real development. And the art of living is not synonymous with “more stuff.” People occasionally glimpse this, and then we fall back into more, more, more.

Daly’s thesis appears to be based on the distinction between “development” and “growth”. But the example he brings up confuses the matter. He does not consider computers to be “growth”, because in his definition, growth means growth of materials. So Daly is actually not against growth at all (even economic growth). He is simply against growth in terms of the exploitation of materials. I think most intelligent people in this day in age would agree that our civilization would do better with less material exploitation. But “material exploitation” is not is not in a direct causal relationship with “GDP growth”. In fact, if you come up with new and innovative ways to do something with less physical materials, usually you are rewarded with profit, and that results in GDP growth (like the invention of the computer!).

It’s a false assumption to say that growth is increasing the standard of living in the present world because we measure growth as growth in G.D.P. If it goes up, does that mean we’re increasing standard of living? We’ve said that it does, but we’ve left out all the costs of increasing G.D.P. We really don’t know that the standard is going up. If you subtract for the deaths and injuries caused by automobile accidents, chemical pollution, wildfires and many other costs induced by excessive growth, it’s not clear at all.

Here, Daly is basically saying that capitalism has created problems, serious problems. There is no doubt about that. But with all its problems, is life better for the vast majority of people now, or in 1700? Before you answer, consider this:

What I call the empty world was full of natural resources that had not been exploited. What I call the full world is now full of people that exploit those resources, and it is empty of the resources that have been depleted and the spaces that have been polluted.

I can sympathize with the sadness and despair that comes through in these words, about a wasted world that has been exploited and depleted. I hope we can take some solace from the fact that Daly is incorrect.

It is a quite common anthropocentric misconception to see the world in terms of finite (and depleted) resources. This view fails to recognize the hidden variable which is the only thing that defines what is a resource: knowledge. There is no such thing as a resource without knowledge of how to put it to use. For example, wood was not a resource before there was knowledge of how to build a house or make a fire. Penicillium mold was not a resource before there was knowledge of how to use it as an antibiotic. The view expressed by Daly is anthropocentric because it assumes that our current human knowledge is the only possible knowledge. When someone says that resources are limited, they are implicitly saying that knowledge is limited. So far there is no evidence for this, and much evidence to the contrary.

The failure of a growth economy to grow is a disaster. The success of a steady-state economy not to grow is not a disaster. It’s like the difference between an airplane and a helicopter. An airplane is designed for forward motion. If an airplane has to stand still, it’ll crash. A helicopter is designed to stand still, like a hummingbird. So it’s a comparison between two different designs, and the failure of one does not imply the failure or success of the other.

Daly here is suggesting a fundamental design change to the economy, where if there is zero growth, that is fine. However, he provides no details as to what such a design might be. Capitalism is a system that allows people to invest in things based on the hope of future return. This system has created many problems, no doubt. However, this system has also successfully solved a lot of problems over the past centuries. I personally hope we can find a better system than capitalism in the future, but unfortunately, no ideas are offered in this article. I would suggest that in order to mount a credible argument against capitalism, one would need to do the following:

• Demonstrate that they understand exactly what problems were solved with the creation and implementation of capitalism.
• Propose an alternative that solves both the original problems that capitalism successfully solved, encourages growth (or “development”, to use Daly’s terminology) in the areas where we want growth (eg, knowledge, science, education, freedom, medical cures, nourishment for the human spirit), and doesn’t have any (or has fewer) of the negative byproducts of capitalism.

My critique of economics as it exists today would be that it is too materialistic because it does not consider the relationship between the ultimate ends and the intermediate ends. At the same time, economics is not materialistic enough because it also refuses to deal with the ultimate means. It doesn’t ask questions about the fundamental limits of the entropic nature of the world, of matter and energy and adapting to these physical limits.

Daly is correct that economics as it exists today is too materialistic, but he is perhaps mistaken in what he has identified as the “ultimate means” (the entropic nature of the world). Maybe, over billions of years, the first and second laws of thermodynamics are the “ultimate means”. But over decades, centuries, and millennia, the “ultimate means’’ that matters most is knowledge. Interestingly (but not surprisingly), the word “knowledge” is not mentioned even once in the entire conversation.

I don’t think that you can say life is an accident, which is really what scientific materialism says. Neo-Darwinism has gotten a free ride philosophically for a long time. When you calculate the compound probability of all these infinitesimally probable events happening at once to generate life, it becomes quite absurd. The Neo-Darwinist types say, “Yes, we accept that, that’s mathematics.” It’s totally improbable that life should have originated by chance in our universe. “But we have infinitely many unobserved universes!” Infinitely many universes, unobserved? “Mathematically it could have happened!” And our universe is the lucky one? They look down their noses at religious people who say there’s a creator: That’s unscientific. What’s the scientific view? We won the cosmic lottery. Come on.

Actually, there are a number of new and compelling theories about how life emerged on Earth in a way that was non-random, non supernatural, and beautiful. Please refer to Bobby Azarian’s The Romance of Reality, and the work being done at the Santa Fe Institute. The interpretation of Neo-Darwinism described by Daly (that life is an accident) is perhaps ignorant to the latest scientific theories.

I get a lot of criticism in the sense of “I don’t like that; that’s unrealistic.” I don’t get criticism in the more rational sense of “Your presuppositions are wrong” or “The logic which you reason from is wrong.”

Well, sir, perhaps consider this the first :)