GDP-iecing it together

The American economist Kenneth Boulding once joked that "anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist".

But since the middle of the 20th Century, economic growth is all that we have been striving for. Gross Domestic Product, which measures the total of all economic value created in an economy in a given period of time, has been described as a "holy grail", used as a shorthand for economic health and prosperity.

Many see GDPShort for Gross Domestic Product, the measure of all the goods and services produced inside a country. as a flawed metric. Robert F KennedyAn American politician and lawyer, and the brother of US president JFK. He was assassinated in 1968. remarked in 1968 that it measures "everything, in short, except that which makes life worthwhile".

In other words, GDP accounts for people's hours at a summer job and in the shopping centre, but not the time they spend laughing in the park with their friends or teaching their younger sibling how to read. It is a measure of money moving from hand to hand, but it excludes other ways we find satisfaction in our lives.

It is a truth hard to swallow. We are sold on the idea that when our economy grows, we are happier and better off; when we hit recessionA period of economic decline. A recession occurs when a country's Gross Domestic Product falls for six months in a row.  periods, we suffer. This is because when real GDP grows, employment, spending and real wages often grow too.

And in many cases, the correlation is strong, particularly in developing countries, where an economic boom is likely to lead to better living standards, infrastructureThe basic systems and services that a country needs to keep it going., technology, housing, investment and economic confidence.

But the research shows that in economically developed countries, the relationship between GDP growth and standards of living is more obscure. GDP has grown by 5,000% since the 1960s, but inequality has boomed with it. Many no longer feel the benefits of economic growth at all.

In 1974, the economist Richard Easterlin developed the "Easterlin paradox", which suggests that in the long term, a growth of income does not correlateWhen two things are related or linked to each other. whatsoever with a growth of happiness or individual satisfaction.¹

Degrowth offers a radical modern solution. In simple terms, degrowthers advocate for scaling back our consumption of the earth's resources and shrinking our economies rather than growing them.

The idea shocks many. It sounds like proposing a deliberate recession, with all the suffering and poverty that may bring. But degrowthers believe that shrinking the economy should be accompanied by a broad redistribution of income and a sustained effort to reduce inequality - so that spending can be reduced whilst living standards and wellbeing remain high.

It is a policy increasingly favoured by environmentalists, who argue that it will be impossible to reduce emissionsThings that are released, such as gases, as part of a process. E.g. greenhouse gases. and meet our climate targets without a significant drop in consumption on a global scale. For them, every second we spend prioritising economic growth drives us towards climate catastrophe.

Others reject this concern, pointing out that as many as 32 countries have already succeeded in "decoupling" emissions from GDP, meaning that emissions and climate impact can decline even as the economy continues to grow.

As one economist emphasised, "the concept of degrowth is not, in fact, anti-growth. It is anti-growthism." For as long as we pursue growth at the expense of goals such as human happiness and a sustainable future, we will always fall short.

Yes: Degrowth would allow us to take a step back to remedy unsustainable levels of inequality and also provide us with the opportunity to build green economies to hit our climate goals.

No: Economic growth is responsible for our longer life expectancies, new technologies, medical treatments and more. And there is strong evidence that emissions can be shrunk whilst GDP still grows.

Or... Economic degrowth does not seem viable, but individual degrowth is still something we should all aspire to. Personal degrowth involves buying less, wasting less, and trying to support ourselves in the most sustainable way possible.