Ross Urquhart: Endless growth?
Have you ever questioned why our national vitality is measured in terms of “economic growth”? Now might be a good time. Governments apparently live and die based on their ability to provide this so-called basic staple of our national existence. Yet, our society has many facets, so why is its success or failure measured by this one metric? Are those who control government policy implying that if we are forced to endure a “no-growth” world we might cease to exist?
Every announcement by the central bank (or any senior bank economist for that matter) is treated as a prime-time newsworthy event—provided it contains a forecast for the growth rate. And when the news isn’t good it’s generally followed by a media blitz of headlines and interviews with the renowned bogeymen of both Wall Street and Bay Street bearing tidings of recession or depression (these events being varying degrees of no growth, all temporary of course). Such is our indoctrination that we have even learned to live with the concept of “negative growth”, which is somehow, I suppose, more acceptable than saying “positive shrinkage”.
Regardless, if you were standing on the outside looking in, it would be difficult not to conclude that our world rises and falls on a few percentage points of what financial wizards define as “growth”. This being the case, we had better get used to economists and governments publicly tearing their hair out and complaining about the lack of potential in the economic environment because the long-term outlook is not good—and, perhaps, we should begin foraging around for a different system to measure humanity’s annual-success-in-living.
Much of the traditional increase displayed by world economic indicators has been related to the boost it gets from our rapidly rising population. “A rising tide lifts all boats,” as the economists are fond of saying. When the world is adding a hundred million new individuals per year, every year, like it was for a couple of generations, it becomes a rather straightforward challenge to grow your market. Everyone needs food, clothing, and shelter, at a very minimum. (Most of us need a whole lot more.) However, in the last dozen years or so, this population expansion has begun slowing and the forecast is for it to keep slowing. In fact, population growth is expected to actually stop dead in its tracks by the latter half of this century. (If that seems unbelievable, try this on for size: before this century is over our world population will likely begin declining.) Already over 70 countries, including the most advanced and democratic countries, have populations where the growth rate (children per couple) is presently below replacement. Right now all of their (our) national population growth comes from immigration.
World population growth has gone from 4.7 children per couple a few decades ago to 2.5 children per couple at the present time and the trend is to hit 2.1 (basic replacement) by approximately 2080. These numbers are generated from studies funded and compiled by the World Bank and, although timelines may be argued, the outcome is in little doubt. Populations will increase for some years yet but a declining rate of growth is what we have to anticipate.
Canada is in the enviable position of having a few tools to cushion this effect due to our international popularity. Countries like ours can grow at whatever rate we wish because we have waiting lists of people who want to get in. Still, as a trading nation the growth in our economy is a function of the world economy, and the world economy is beginning to feel the strain of slowing population growth. What’s more, as we gradually produce fewer workers to generate wealth—and the existing population continues to age—and become less productive (indeed, more needy), the kind of economic growth we have seen in the past is even more difficult to access. It’s a quandary, and it’s happening on a scale that ranks up there with other major world dilemmas like climate change. Both, it appears, require transformational changes in how we view what it means to be a resident of this planet.
On the up side, a stable world population does give us a chance to determine the parameters of true sustainability. It’s hard to imagine how that will impact our lives but the possibilities are impressive. We could reach an understanding of what it takes to secure various lifestyles—food production, energy, land and water use; predictability should increase dramatically—and that is a good thing.
On the downside, how we determine anything’s “worth”, at present, is based on estimating its ability to increase in value (it’s called speculation)—and that relates to a growing marketplace. Take a house, for example: the price goes up because more people are bidding on it; more people need a place to live and want to live where your house is. So what happens when the marketplace isn’t growing? When the only reason to build a house is to replace a worn out one. What does that do to the value of homes? And homes are the primary repository of wealth for most of us.
Lots of questions are being raised and few are being answered. In fact, it almost appears as if we don’t want to know. Certainly, leaders in business and government are doing nothing to prepare us for this coming major shift in our fundamental priorities. Perhaps, like climate change, they want to deny it exists for as long as possible and pass the consequences on to the next generation.
The primary model we are following right now is one based purely on economic growth and we appear willing to sacrifice more and more to maintain this direction. The evidence suggests that if we continue along this path we could experience a growing failure to achieve our goals, followed by a breakdown in the overall concept. On the other hand, if we begin developing new models we may have time to adapt and find satisfaction in other lifestyles. At the very least it might be time to begin the discussion.