5 Reasons Why Prioritizing Growth Is Bad Policy
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The first of these measures responds to society's need for a monetized measure of sustainable economic welfare--an indicator that corrects the shortcomings of GDP as a measure of social well-being and that can be compared with the movements of GDP and GDP per capita on a regular, quarterly basis. The most important efforts to date have been those developing the Index of Sustainable Economic Welfare (ISEW) and its American offshoot, the Genuine Progress Indicator (GPI), now being developed in several states. The ISEW begins with national private consumption expenditures and then adjusts that for distributional inequalities. It then adds in nonmarket contributions to welfare, such as unpaid housework, and subtracts out defensive expenditures such as police protection and pollution control, and it also subtracts the depreciation of natural resources and environmental assets.
3. The focus on GDP growth deflects efforts from growing the many things that do need to grow. Of course, many things do indeed need to grow. We need to grow the number of good jobs and the incomes of poor and working Americans. We need growth in investment in public infrastructure and in environmental protection; growth in the deployment of climate-friendly and other green technologies; growth in the restoration of both ecosystems and local communities; growth in research and development; growth in security against the risks attendant to illness, old age, and disability; and growth in international assistance for sustainable, people-centered development for the world's poor. These are among the many areas where public policy needs to ensure that growth occurs.
Jobs and meaningful work top that list because unemployment is so devastating. America should be striving to add jobs twice as fast as we are, or more. But likely future rates of overall economic growth won't get us near this goal. The availability of jobs, the well-being of people, and the health of communities should not be forced to await the day when GDP growth might somehow deliver them. It is time to shed the view that government provides mainly safety nets and occasional Keynesian stimuli. We must insist that government have an affirmative responsibility to ensure that those seeking decent-paying jobs find them. The surest, and also the most cost-effective, way to that end is direct government spending, investments, and incentives targeted at creating jobs in areas where there is high social benefit, such as modern infrastructure, child and elder care, renewable energy and energy efficiency, environmental and community restoration, local banking, and public works and childhood education.
Creating new jobs in areas of democratically determined priority is certainly better than trying to create jobs by pump priming aggregate economic growth, especially in an era where the macho thing to do in much of business is to shed jobs, not create them. Another path to job creation is reversing the U.S. gung-ho stand on free trade globalization. To keep investment and jobs at home, William Greider has urged that Washington "rewrite trade law, tax law, and policies on workforce development and subsidy."
4. The over-riding imperative to grow gives over-riding power to those, mainly the corporations, which have the capital and technology to deliver that growth, and, much the same thing, it undermines the case for a long list of public policies that would improve national well-being but are said to "slow growth" and to "hurt the economy." Thomas Friedman says that economic globalization puts countries in a golden straightjacket -- creating new wealth but constraining national policies. Far more encompassing is the straightjacket of the growth imperative. It is possible to identify a long list of public policies that would slow GDP growth, thus sparing the environment, while simultaneously improving social and individual well-being. Such policies include shorter workweeks and longer vacations; greater labor protections, including a "living" minimum wage, protection of labor's right to organize, and generous parental leaves; guarantees to part-time workers; a new design for the twenty-first-century corporation, one that embraces rechartering, new ownership patterns, and stakeholder primacy rather than shareholder primacy; restrictions on advertising; incentives for local and locally owned production and consumption; strong social and environmental provisions in trade agreements; rigorous environmental, health, and consumer protection; greater economic equality with genuinely progressive taxation of the rich (including a progressive consumption tax) and greater income support for the poor; increased spending on neglected public services; and initiatives to address population growth at home and abroad. Taken together, these policies would undoubtedly slow GDP growth, but quality of life would improve, and that's what matters.