'Growth' That Kills: Gross Domestic Product Mislabels Damage to the Planet

By Daly, Herman | Sojourners Magazine, February 2010 | Go to article overview
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'Growth' That Kills: Gross Domestic Product Mislabels Damage to the Planet


Daly, Herman, Sojourners Magazine


For which of you, intending to build a tower, does not first sit down and estimate the cost, to see whether you have enough to complete it? --Luke 14:28

LAST FALL, ECONOMISTS Joseph Stiglitz, Amartya Sen, and Jean-Paul Fitoussi, leading a commission created by the French government, issued a report re-examining a number that is too often treated as a central measure of economic health: Gross Domestic Product (GDP), or the total amount of money paid for final goods and services bought by households and produced in a country in a given year.

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The topic is certainly vital: The greatest idol of our time is probably GDP. We "worship" it by trying to make it grow forever. Its growth is considered as the solution, or at least a necessary condition, for solving nearly all our problems. Yet GDP is also the best index we have of the combined effects of pollution, depletion, congestion, and loss of biodiversity. Economist Kenneth Boulding has suggested, with tongue only a little bit in cheek, that we relabel it Gross Domestic Cost. It is the measure of the damage we inflict on finite, non-growing creation in order to support more people at higher per capita levels of resource use.

In a world relatively empty of people, it was worth paying the cost of environmental degradation in exchange for the benefit of more people leading more abundant lives. The scale of environmental damage was within the regenerative and assimilative capacities of nature. In a relatively full world, the degradation of creation required to support still more people consuming still more resources per capita is no longer worth it. Why? Because the planet's life-support capacity, its natural capital, is now being used up faster than it can be regenerated. The cost of present growth will be fewer and less comfortable lives in the future.

Growth that makes us poorer will not abolish poverty; we'll have to seriously share. Does the Stiglitz-Sen-Fitoussi report identify the point at which growth becomes uneconomic? No, that would be asking too much.

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'Growth' That Kills: Gross Domestic Product Mislabels Damage to the Planet
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