The economy first is what I was told

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Growing the economy is most governments’ priority. Economic growth is seen as the way to increase people’s well-being, and as a condition to ensure the common good. It is perceived as benefiting everyone, and a key underlying idea is that more growth is always good.

Is more always good? Herman Daly, an ecological economist, argues that this might not be the case, because the economy does not grow into a void. To expand, the economy displaces and degrades the natural environment upon which our (and other species) lives depend upon. Having economic growth as most governments’ priority is problematic because, as a result of this prioritization, environmental sustainability — which might put limits on the economy — is jeopardized.

In this article, I explain the role of the analytical framework of classical economics in perpetuating this prioritization. This analytical framework, informing most political decisions impacting our daily lives is, however, not the dominant framework entirely by chance.

Who benefits from the story of economic growth? Who is repeating this story over and over again, to a point where most people consider a growing economy as the only way for a society to thrive?

Thwink argues that large corporations are the main beneficiaries of economic growth, and have thus interest to push for it as the government’s main priority. As explained here, the current economic system — by design — benefits corporations that grow. Pushing for economic growth is thus the most rational choice for corporations aiming to thrive in such a system.

One of the means to thrive is to convince politicians to prioritize economic growth. And it works: the gross domestic product (GDP) (which we use to measure economic growth), is used in most countries as their success or progress indicator.

Stories (and indicators) determine what we see, they shape our reality, including politicians’ reality. I do not have the data to assert this, but from personal experience (take it for what it is worth), I am deeply convinced that most politicians prioritizing economic growth over environmental sustainability do not act in bad faith. Economics may not be the politicians’ main expertise, and they may be taking economists’ advice, a very reasonable thing to do. But most economists are taught an analytical framework that stops them from questioning economic growth, and thus the story gets perpetuated, over and over again. Also not due to bad faith from economists. As Daniel Schmachtenberger argues in this podcast, good-faith discourse can be wrong.

Photo by AbsolutVision on Unsplash

You may be asking at this point why I oppose economic growth and environmental sustainability. Are economic growth and environmental sustainability really incompatible? Large corporations are currently allowed to externalize (i.e. do not pay) environmental costs, what if that was no longer the case? If laws changed and corporations had to internalize environmental costs, would economic growth still be problematic?

I have argued, for years, that economic growth could be made compatible with environmental sustainability if costs were internalized. I explain in this article what made me change my mind and what we can do to actually get costs internalized (Spoiler: not what we are doing now; which is great news as it is not working very well).

Keep reading.