Every culture has its myth. Ours is the myth of growth, whereby we perceive the accumulation of material and financial wealth as a proxy for social progress and human well-being. The example of Washington state illustrates how modern society struggles to abandon the illusion of limitless expansion, even when it tries to do right by its citizens.
Outgrowing Poverty
In 2017, Jay Inslee, the governor of Washington, announced a new initiative. Through a directive, he established the Poverty Reduction Work Group and tasked it with creating a ten-year plan to reduce poverty and inequality in the state. The directive asserted that “poverty reduction can be an economic driver for Washington employers, by increasing consumer income, consumer demand, and the supply of skilled workers for growing economies.”
Soon after, an article published by the governor’s office explained that “when families are able to meet basic needs, children do better in school, communities flourish and the economy grows. This is the philosophy behind a newly formed interagency group established by Gov. Jay Inslee to reduce poverty in Washington.”
In effect, the directive justified the laudable goal of eradicating poverty with the political objective of economic growth. This thinking accurately sums up the dominant ideology of our time, which equates economic growth with social progress. More, it seems, is always better.
The line of thought also appeared in the subsequent publication, released by the work group in early 2021 after years of painstaking work. The ten-year plan, titled “Blueprint for a Just and Equitable Future,” continued to frame social issues in economic terms, stating that “the effects of economic hardship are well-documented and crystal clear: poverty causes negative outcomes for children, adults, and families and costs the U.S. economy over $1 trillion annually.… In Washington state, the economy would be nearly $40 billion stronger if poverty were reduced and racial disparities in income were eliminated.”
As if recognizing the faux pas, the publication quickly added that “reducing poverty and inequality is not just about the economic returns—it is also about dignity, humanity, and belonging.”
To be fair, the publication does, in fact, put people front and center. The twenty-two-person steering committee that led the work on the blueprint consists of people with lived experiences of inequity, including BIPOC, people with disabilities, LGBTQIA+ people, immigrants, refugees, and single parents. The plan centers racial equity and openly addresses the United States’ history of colonialism, oppression, and racism. By all measures, the publication is remarkably progressive. Nevertheless, it seems that economic growth has been cast as a top priority in the state’s overall poverty reduction efforts.
If the goal is indeed economic growth, then the state of Washington has much to celebrate. Economic performance in Washington—measured by GDP growth (adjusted for inflation and deflation)—was the highest among all states between 2012 and 2021. Even with its ups and downs, the average rate of annual GDP growth in Washington was 4 percent, twice the national rate, while the state’s GDP per capita in 2021 ($72,000-plus) was the fourth highest in the nation. As these increases are compounded (meaning that every addition is greater than the last), an annual average rate of 4 percentage points has grown Washington’s economy by over 40 percent by the end of 2021 over what it had been in the previous decade.
One might conclude that the economy of Washington is doing better than ever. If growth is the goal, then the mission has been accomplished. So why continue to frame poverty reduction as a vehicle for economic growth? How much growth is enough? Is it perhaps that the logic was intended to work in reverse? Is it the case that economic growth is meant to reduce poverty?
If that were the case, then we would have expected to see reductions in rates of poverty at least somewhat proportionate to the high rates of economic growth in the past decade. But as the plan itself makes clear, “nearly one in four Washingtonians—1.75 million people, including 500,000 children—struggled to make ends meet.” That is a staggering figure for one of the wealthiest states in the wealthiest national economy in the world. (The United States boasts the largest aggregate GDP in the world, and has the eleventh highest GDP per capita.)
What has gone wrong? Is the problem a lack of equitable growth? Is it that the spoils of growth have not been distributed fairly? This is undoubtedly a major part of the answer, considering the stunning levels of inequality in the country: the richest 1 percent of society collectively holds twenty-three times more wealth than the poorest 50 percent put together. Accordingly, one of the sixty recommendations outlined in the blueprint is to “enact changes to the tax system that support equitable economic growth.”
But the problem is not just the unfair distribution of the wealth generated by growth. Inequality is merely a symptom of our obsession with growth itself, made evident by the notion that a fundamental function of poverty reduction is not just to improve lives, but to boost the economy. So why are we really obsessed with growth?
Fixated on “More”
The answers to this question are long and varied. But examining the remarkable uniqueness of modern society from a historical and anthropological perspective is as good a place to start as any.
Starting in the English countryside in the twelfth century, elites and the church began to privatize access to the means of basic survival, fencing off land and privatizing the tools of production. This well-documented, violent, and state-sanctioned process, which more or less concluded in England by the nineteenth century, is what historians call the enclosure movement. Eventually, Europe and the rest of the world followed suit.1
People were evicted from the land, deprived of the means to produce their own food and build their own shelter, and severed from their community networks. For the first time in humanity’s 200,000-year history, most members of society became fully dependent on markets for their survival. Today, most people around the globe, including all Western nations such as the United States, live in capitalist societies, or what historians and anthropologists sometimes call market societies: societies in which all goods and services, down to the most basic necessities, can only be accessed on markets in exchange for money.
Think of supermarkets, the job market, or the housing market. Or consider the fact that to this day, only two U.S. states—Florida and Illinois—protect their residents’ right to grow vegetables on property that they own. For most people, markets are the only source of food. The historical novelty of this cannot be overstated.
Market dependence means that those without land and tools must auction off their labor to earn a wage, just so that they can access markets to meet basic needs. Even those with access to land and tools must produce and sell goods to obtain money so that they can access markets and secure their own survival and the survival of their business. As the historian and political theorist Ellen Meiksins Wood wrote in her book, The Origin of Capitalism,
Once market imperatives were well established, even outright ownership was no protection against them.
But the most troubling aspect of this societal arrangement is its internal logic. The combination of private property and market dependence generates a structural imperative to pursue perpetual growth divorced from actual human needs.
The primary reason for this is that those who produce goods for market exchange must generate a profit, then reinvest some of those profits to improve the efficiency of production as well as increase output, so that they may generate further profits.
In the words of the ecological economist Giorgos Kallis, “Capitalists—regardless of whether they are good people or bad, whether they are greedy or not—have to draw as much surplus from labor as possible otherwise other capitalists will outcompete them.”2 In other words, generating a profit must take precedence in a market society, which ultimately makes capitalists indifferent to the commodities they produce. As the anthropologist David Harvey wrote:
If there is a market for poison gas then they will produce it.3
But how does this profit motive lead to growth?
Reinvesting profits to improve the efficiency of production allows producers to lower their operational costs and therefore lower the prices of their goods. Lower prices attract more buyers, which is critical for ensuring the survival of the business.
However, the most immediate ways for producers to lower costs, and therefore lower prices, are to underpay workers, to lay off and replace those workers with more efficient machines, and to appropriate raw materials from nature for free. Since underpaid workers constitute the largest consumer base in society, producers must also increase output and sell more goods to make up in numbers what their consumer base now lacks in wealth. The easiest ways to increase output in order to sell more goods are to lengthen the working day and to squeeze higher productivity out of workers under the threat of layoffs.
Pursuing profits, the producer is now caught up in a self-reinforcing cycle: lower your prices; sell more goods. Lower your prices further; produce and sell even more. It’s a way of pouring more and more sand into a bag with an ever-increasing hole at the bottom, and thus the economy grows ad infinitum.
Admittedly, this is a vastly simplified account of what drives perpetual economic expansion. A more detailed explanation would also describe the vicious cycle of interest-bearing debt as businesses and economies borrow capital in order to grow, and then must grow to pay back the debt.
It is also worth noting that the growth imperative is a contested topic across various schools of economics. There are models in which market societies do not need to grow, and the dominant theory taught in business schools explicitly denies the possibility of the exploitation that growth requires. In their analysis, economists Richard Wolff and Stephen Resnick explain that the neoclassical “claim is that each individual gets back from society a quantum of wealth exactly proportional to what each has contributed to society. This theory of distribution is remarkable for its inherent fairness. It is also remarkable for what it rules out: exploitation.”4
But once we move from the abstract to the concrete and examine the historical record, we find that the pursuit of growth in capitalist market societies has indeed been a constant trend along with the figure of the underpaid and overworked wage laborer toiling against the backdrop of an over-extracted natural landscape.
We can state clearly that exploiting people and harming the environment are intrinsic features of our society. They are the direct outcome of the structural imperative to pursue growth in the pursuit of profits. Exploitation, therefore, cannot be reduced to a moral failure alone.
Economic anthropologist Jason Hickel explains that “our economic system is not designed to meet human needs; it is designed to facilitate capital accumulation. And in order to do so, it imposes brutal scarcity on the majority of people, and cheapens human and nonhuman life.” Indeed, the imperative to infinitely both expand production and consumer demand provides the basis—at least in recent history—for the colonization of people and natural resources in pursuit of cheap inputs to production and the globalization of markets in pursuit of profitable market exchange.5
But if our social form is so clearly problematic, why do we continue to pursue growth with such dogged insistence?
One reason is that capitalist market societies experience any lack or slowdown of growth as a disastrous crisis. Once everyone is fully dependent on markets for their survival—and on money to access those markets—any impediment to profit and growth can send the system into a tailspin, as businesses go bust and workers lose their jobs and wages. A crisis then ensues as people can no longer afford food, shelter, healthcare, and other basic needs.
We may also consider the role of increasing the supply of money (in the form of debt) faster than we can produce the goods the money is meant to represent. Harvey explains that “money creation takes the form of debt and debts are a claim on future value production.… If future value production is insufficient to redeem the debt then there is a crisis.”6 Unable to pay off debts, businesses default and people lose their jobs—all despite there being an excess of products, and an even greater excess of credit money in the system.
Ultimately, this is the great contradiction of market societies: economic growth generates unimaginable wealth and unspeakable human suffering in one fell swoop.
Nonetheless, if everyone depends on markets for their survival, it is inevitable that we begin to think of the growth that sustains the system as a vital force. Even more importantly, we must ask: who benefits? For the minority that benefit most from the wealth created by growth, it is critical that the rest of society associates growth with progress and well-being. Growth ideology legitimizes exploitation. As Kallis put it,
the promise that everyone will do better tomorrow postponed conflict over how to share fairly what is produced today, making exploitation more tolerable.7
In this way, pursuing growth has morphed into an ideology, a secular religion in its own right, which explains why promoting and measuring economic growth has become the mainstay of modern political rhetoric.
Measuring the Wrong Thing
Gross Domestic Product, or GDP, is a measure of the size of a nation or region’s economy. It tells us how much is produced, how much is earned, and how much is spent across that nation or region.
The modern GDP metric was originally designed in the 1930s by the economist Simon Kuznets to help policymakers figure out how to respond to the Great Depression. The thinking went that calculating the total monetary value of all the goods and services produced in the economy would allow them to see more clearly what was amiss and how they could fix it.
Kuznets insisted that the GDP should exclude the measure of those activities that did not contribute to human welfare. But when the Second World War struck, economist John Maynard Keynes argued that the GDP should indiscriminately count all money-based economic activities. This way, the nation could see every bit of productivity available for the war. Keynes’s vision won.
The 1944 conference in Bretton Woods later established GDP as the main tool for measuring a nation’s economy; the World Bank later did the same for the so-called “developing world.” This translated development into growth goals and tied international aid to a nation’s GDP performance. During the Cold War, the competition between the West and the Soviet Union was mediated largely by rates of growth, and so, gradually, GDP came into widespread use.
But just as growth is predicated on the exploitation of people and nature, the GDP metric is problematic too. In keeping with Keynes’s original vision, GDP does not care whether an economic activity is useful or destructive.
To paraphrase Hickel: if you cut down a forest for timber, GDP goes up. If pollution causes hospital visits to rise, GDP goes up. Conversely, if you grow your own food or care for your aging parents, GDP says nothing. Nor does it include any cost accounting: GDP does not acknowledge the loss of the forest as habitat for wildlife, or as a sink for planet-warming emissions.8
Put simply, our societies measure economic growth predicated on exploitation using a metric that overlooks exploitation.
There is no better representation of this than soaring stock prices, record profits, and generous shareholder and executive compensations during the COVID-19 pandemic, as over one million people in the United States alone died, millions more lost their jobs, and countless slipped into poverty. The economy is indifferent to human needs.
Even so, supporters of growth will argue that economic expansion is necessary to reduce poverty, deliver innovation, and improve public health. To a certain extent, this is true. Where there is insufficiency, growth can help.9 But where there is excess—as in the United States, the richest nation in the world—growth does not provide any direct remedy. Case in point: a third of the U.S. food supply goes to waste, making food the largest category of landfill material, while millions struggle to secure their next meal.
Indeed, with inequalities at never-before-seen rates, it is hard to claim that growth trickles down, much less that it reduces poverty. It is quite the opposite: wealth flows upward. Worker productivity in the United States has risen by over 60 percent in the last 40 years, while wages per hour only rose by 17 percent. Globally, nearly one-third of all new income from GDP growth in the last 40 years has gone to the richest 1 percent, all of whom are, at minimum, millionaires.10
The same can be said for innovation. Hickel writes that “From plumbing to the internet, vaccines to microchips, even the technologies that make up smartphones—all of these came from publicly funded research. We don’t need aggregate growth to deliver innovation.”11
Similarly, historian and public policy expert Simon Szreter writes that,
the human record in fact shows no necessary, direct relationship between economic advance and population health.… The most that can be said in favor of modern economic growth is that the wealth that it accumulates creates the longer-term potential for population health improvements. But whether or not this potential is realized depends entirely on a set of quite distinct social and political negotiations and decisions on how exactly that wealth is to be used and distributed.
In other words, there is no automatic relationship between economic growth, social progress, and human well-being. This helps explain why fifty countries beat the United States in life expectancy while having an average 40 percent lower GDP per capita, as measured in current U.S. dollars. Cuba, for example, achieves a higher life expectancy than the United States, despite its 86 percent lower GDP per capita. Less is more.
Meanwhile, the negative effects of growth are unambiguous. Industrial and ecological economists have demonstrated that GDP growth is tightly bound to material and energy use, which shows that GDP growth cannot be sustained indefinitely on a finite planet. An increase in the size of the economy by 1 percent is associated with an 0.8 percent increase in material use, inevitably translating to biodiversity loss. Despite what neoclassical economics might claim, the “economy” is ultimately a process of material transformation. Indeed, human-made materials today outweigh Earth’s entire biomass as we strip over 100 billion tons of raw materials from nature each year while recycling less than 9 percent of it.
And while data shows that decoupling growth from planet-warming emissions is possible (and is already happening in some regions), there is no empirical proof that this can be sustained, or that it can be generalized across regions. More importantly, it is unlikely that nations can decouple emissions from growth fast enough to stay within the carbon budgets for 1.5 and 2 degrees Celsius against a backdrop of continued expansion. Humanity has, in fact, emitted more planet-warming carbon dioxide emissions in the last thirty years than in the preceding two-and-a-half centuries.
At the same time, research in industrial ecology has shown that we can achieve high standards of well-being for every person on the planet with less than half the current global per person average in use of materials and energy. Given that per capita material use in the United States is two-and-a-half times the global average and four times above the sustainable threshold, there is ample opportunity to do more with less.
Once we peel back the mythical layers of GDP growth, it becomes clear that measuring the busyness of the economy and calling it progress is a dangerous fallacy. It is irrational to believe that growing an economy built on exploitation and measured by a metric indifferent to exploitation will somehow fix the ills caused by the process of growth itself.
Hickel sums it up concisely:
Instead of pursuing growth for its own sake and hoping that it will magically improve people’s lives, the goal must be to improve people’s lives first and foremost—and if that requires or entails economic growth, then so be it. In other words, organize the economy around the needs of humans and ecology, rather than the other way around.12
Back and Forth on Growth
We have already seen how Washington state is framing poverty reduction as a vehicle for economic growth. Now that we understand the underlying logic of market societies, Washington’s poverty reduction efforts appear in a different light.
The Poverty Reduction Work Group released an early draft of their blueprint just before the outbreak of COVID-19. As the pandemic swept the globe, the work group solicited feedback on their draft from people and communities most affected by poverty. The responses urged the work group to prioritize equitable recovery and long-term, inclusive economic growth. Growth, it seemed, was still very much on the table. But the focus had shifted to a more equitable version of it, which— as noted earlier—was reflected in the final publication of the plan, released in early 2021.
In light of the pandemic, Washington also formed a Technical Advisory Group, functioning as an offshoot of the original Poverty Reduction Work Group. This advisory group, composed of state agencies and community non-profits, was mandated to devise a more equitable path forward and provide specific policy recommendations beyond the ten-year plan, guiding the state toward what the group dubbed an “equitable economic recovery.”
Ultimately, what we see is a state that is grappling with the enduring myth of growth. Even as it tries to center human lives, it struggles to decenter the ideal and language of economic growth.
This back-and-forth became apparent at a Public Performance Review where the Technical Advisory Group presented its policy recommendations to the governor. To provide context, the state organizes its social efforts into goals in five areas. The state’s poverty reduction efforts, for example, fall in the second area, labeled “Prosperous Economy.” Through regular Public Performance Reviews, state agencies and community organizations publicly report to Governor Inslee on the progress they are making toward the state’s goals.
In June 2022, agencies and community organizations presented to Inslee. Among other items, a “prosperous economy” was on the agenda with a special focus on the state’s “economic recovery through an equity lens.” Right off the bat, Inslee echoed the growth narrative in his opening remarks. He noted that “We have a lot to be happy about in the State of Washington. We were just listed as having the best economy in the United States by Wallet Hub.” Wallet Hub, a financial website, bases its ranking system most heavily on GDP growth.
Yet, what followed was an illuminating presentation by the Department of Social and Health Services, along with a community organization called the People’s Economy Lab. Together, they summed up the Technical Advisory Group’s first phase of work, which, in many ways was a challenge to the growth narrative.
Faduma Ahmed Fido, Lab Leader at the People’s Economy Lab, explained to the governor how the lab has been a convener of several other community organizations. She noted that in representing low-income and BIPOC communities, this group of organizations had “established a consensus that our current economy is built on the exploitation of resources and human labor for the purpose of accumulating wealth and power for the few instead of the many.”
It is not often that you hear such clear political sentiment in modern politics, which tend to reduce questions about the common good to matters of technical management.
One of the policy recommendations Fido laid out was for Washington to adopt the Genuine Progress Indicator, or GPI, and mandate its use across all state agencies. Fundamentally, the GPI does rely on GDP as a metric. However, the GPI also adds positive factors that are absent from the measurement of GDP—such as household work and volunteer work—while extracting some of the negative elements, such as pollution. Finally, GPI adjusts for inflation, factors in inequality, and accounts for costs, such as damage caused by climate change.
Other states, like Vermont, Maryland, and Hawai’i have been using the GPI for several years, albeit as a secondary metric (alongside the GDP). In July 2021, Minnesota Representative Ilhan Omar even introduced legislation that would require federal agencies in the United States to use the GPI as well as GDP in economic and budgetary reporting.
In fact, scarce mentions on the Internet suggest that Washington state has been using both GDP and GPI for nearly a decade now. At the moment, it is not entirely clear how exactly Washington has administered the GPI, or how the Technical Advisory Group’s proposal would differ from the state’s previous use of the metric. But insofar as GDP-measured growth policies promote the indefinite increase of the negative consequences of activities measured by the GDP, a more comprehensive use of the GPI could at least begin to correct that problem—a considerable leap in the right direction. When it comes to measuring human well-being and social progress, the GPI runs circles around the GDP.
That said, the root problem remains to be the pursuit of perpetual growth itself. Using a different metric only changes the speedometer, not the speed of the car,13 which means that growth in a market society will continue to be in conflict with ecological and human well-being, no matter how we measure it. In this way, the GPI needs to mark the beginning of a more thorough-going effort to transform a capitalist society that is predicated on private property and market dependence.
To begin such a transformation, it is important to understand that the economic processes at the heart of growth are inherently undemocratic. Decisions about what gets produced, where, how, and by whom—what happens to any surplus—are determined by a minority class of corporate officers, board members, and shareholders, all of whom are beholden only to the profit motive. Consider that the wealthiest 1 percent of the U.S. population owns 54 percent of all stocks; the wealthiest 10 percent own 89 percent. While most of us insist on maintaining a democratic political electoral system (no matter how fraught), we are made to leave similar demands at the door the moment we enter the workplace.
This separation of economic life from political life is a hallmark of modern market societies. “What we today understand as ‘economic’ activities were embedded in social institutions: rituals, kinship networks, state or religious mechanisms of redistribution,” Kallis writes of earlier, non-capitalist societies.14 Similarly, anthropologist David Graeber recalls observations of the Gunwinngu and the Nambikwara tribes (in Australia and Brazil, respectively), for whom the notion that the “exchange of goods need have nothing to do with war, passion, adventure, mystery, sex, or death,” is impossible to conceive.15
The clean separation of economic and political-social life is historically recent, unimaginable until a few centuries ago. It follows that inviting the community to participate in economic decision-making is where transformative social change begins.
A more democratic process of deciding questions around the production of goods and the distribution of surplus would undoubtedly benefit both humans and the ecology. As one research paper concludes, “failure to cooperate with the future is driven primarily by a minority of individuals who extract far more than what is sustainable. In contrast, when extractions are democratically decided by vote, the resource is consistently sustained.” The researchers add that “Many citizens are ready to sacrifice for the greater good. We just need institutions that help them do so.”
In her presentation to Governor Inslee, Fido recommended that Washington state allocate 20 percent of each agency’s budget toward participatory budgeting with impacted communities, while creating a $20 million dollar community assembly fund to support community-based organizations to facilitate co-governance assemblies in local neighborhoods across the state.
In plain language, these suggestions outline an attempt to elevate the voices of the community to state-level decision-making. While these suggestions do not directly challenge the undemocratic structures of corporate governance, they at least attempt to democratize the process of policymaking, which in turn could impact the economic status quo. This is all the more critical given that “majorities of the American public actually have little influence over the policies our government adopts,” according to a notable research paper. If adopting the GPI replaces the speedometer of the car, then the Technical Advisory Group’s recommendations initiate a necessary conversation about how we should drive. Considering the seemingly value-neutral language of technocratic politics, these recommendations are nothing short of groundbreaking.
In practice, it seems that Washington state has begun to challenge the myth of growth. At the same time, Governor Inslee, state agencies, and even community organizations continue to express goals to improve human lives in economic terms—a contradictory convention, given how economic growth rests in large part on producing poverty, and, vice versa, the elimination of poverty would inhibit capital accumulation. As Kallis reminds us, “our response cannot be to expect a future when we will have more and share it better, because that day will never come and the belief that it will perpetuates the current fantasy that drives expansion.”16
Absent magical powers to instantly reorganize the foundational relations in society that generate the imperative to grow, it is understandable that almost any attempt to challenge growth in mainstream politics will end up borrowing its language. As Graeber wrote, “to argue with the king, one has to use the king’s language, whether or not the initial premises make sense.”17 Let us hope that Washington will continue to argue with the King of Growth.
Notes
- ↩ Ellen Meiksins Wood, The Origin of Capitalism: A Longer View (New York: Verso, 2002).
- ↩ Giorgos Kallis, Degrowth (Newcastle upon Tyne: Agenda, 2018).
- ↩ David Harvey, Marx, Capital, and the Madness of Economic Reason (Oxford: Oxford University Press, 2017).
- ↩ Richard D. Wolff and Stephen A. Resnick, Contending Economic Theories: Neoclassical, Keynesian, and Marxian (Cambridge, MA: MIT Press, 2012).
- ↩ Silvia Federici, Patriarchy of the Wage: Notes on Marx, Gender, and Feminism (Oakland: PM Press, 2021).
- ↩ Harvey, Marx, Capital, and the Madness of Economic Reason.
- ↩ Kallis, Degrowth.
- ↩ Jason Hickel, Less Is More: How Degrowth Will Save the World (New York: Random House, 2020).
- ↩ Tim Jackson, Post Growth: Life after Capitalism (New York: John Wiley and Sons, 2021).
- ↩ Hickel, Less Is More.
- ↩ Hickel, Less Is More.
- ↩ Hickel, Less Is More.
- ↩ Susan Paulson, Giacomo D’Alisa, Federico Demaria, and Giorgos Kallis. The Case for Degrowth (New York: John Wiley & Sons, 2020).
- ↩ Kallis, Degrowth.
- ↩ David Graeber, Debt: The First Five Thousand Years. (New York: Melville House, 2011).
- ↩ Giorgos Kallis, Limits: Why Malthus Was Wrong and Why Environmentalists Should Care (Stanford: Stanford University Press, 2019).
- ↩ Graeber, Debt.