Blockbuster Economics

February 2011
  • A Disney movie written by Economic theorists would end somewhat like this: "so Consumption married Production, and the economy grew happily ever after…"

    It would be seen neoclassical economists are the only ones who believe something can grow forever: empires collapse, people die, balloons burst, but economic growth is the exception! So a fairytale economic wedding would be a comedy, were it not that in reality traditional economists write the movie's script. Politics, society, and the environment garner starring roles, and the "growth" paradigm takes the director's chair, but scene by scene large swaths of society and the natural environment are not laughing. In the economist's movie, the wedding would take place in a shopping mall, the priest would be the CEO of a transnational corporation, the best man would be the investor and the sales team would be the bridesmaids. Prayers and sacrifices would be offered to GDP (the gross domestic product). It would be a blockbuster; all cabinet members would be queuing up to watch, those from industrialised countries booking front row seats! To grow or not to grow? Because size matters, that question does not feature. Sacrifices are being offered to GDP growth as a solution to most problems, including those that its pursuit created in the first place: environmental pollution; poverty and growing social disparity; resource depletion; financial meltdowns; climate change. Such a "thrilling", "sensational" blockbuster- and we have been cast as actors, following GDP's script by busily producing and consuming. But as research has shown, growth beyond a certain point does not always return happiness. Yet that same Western script is being peddled to developing countries through guises of green hues: green growth, green technology, green consumerism. As the blockbuster critic Tim Jackson has put it: "This is a strange, rather perverse, story… about us, people, being persuaded to spend money we don't have on things we don't need to create impressions that won't last on people we don't care about."

    A New Script

    Currently, a nursing mother's love does not contribute to GDP; neither do leisurely activities like Jazz jam sessions, nor helping Rob in the garden. The things which make us happy do not bring growth. Instead, spending on cancer treatment, or paying insurance against robbery stimulate the economy. GDP's perverted obsession with physical size rather than the size of ours and the planet's well-being is gradually turning some actors off. The de-growth movement is building momentum.

    Japan is fretting over falling local consumption, growing national debt, dwindling natural resources, and an ageing population. Rather than weaknesses, some of these are opportunities for re-scripting, casting and stagebuilding for a new economy. After all, what signals are being given to a society when senior citizens, because they are retiring from growthoriented economic activeness, are described by policy as a financial burden on the system?! Having risen as a star of the industrialised world that pursued growth as an end to itself, the stage is now set for Japan to lead the crew to a safe landing: a steady-state economy - pursuing a no-growth policy! To pick a few low-hanging fruits as a starting point: shift away from taxing people's income to taxing resource extraction and pollution; reduce the number of working hours per week to spread around the work opportunities and allow people time to play (yes, have fun!); provide incentives to support local and social entrepreneurs; allocate markets for local produce and crafts at the centre of every city; use Japan's efficient technologies to shift to service systems.

    Traditional economic policy encourages material growth, yet research shows that the things that make us happy-- the ingredients for a prosperous society-- come from the ability to give and receive love, have dignity and respect, be engaged in meaningful work, and have a sense of trust and belonging in the community. As economic actors, we live quantified, scripted lives, yet at the end of the day it is the things we cannot put dollar signs on that make us happy.

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