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The Myth of Perpetual Growth

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The Dream

“Are you better off than your parents were? Will your children be better off than you?”

The politician shouts into the microphone, his face carefully arranged in an expression of outraged inquiry. Before you have time to think of the answer to these questions – and the answer for most of us in real terms is no, despite the proliferation of toys we’ve amassed – the politician gives you the solution.

“We need to concentrate on economic growth for our economy to achieve its full potential, putting our country back on the right track and giving every American family the chance to achieve the American dream."

There it is; that elusive goal – the American dream. What is it?

Each generation is expected to surpass the previous, improving in standard of living, income, physical well-being, security, life (span), liberty (are we more free?) and the pursuit of happiness (whatever that meaningless phrase conjures up for you.)

Bigger houses and better cars; everyone with a college degree; a chicken in every pot will become filet mignon in every pan; an SUV, a boat and an RV in every driveway; the latest electronic gadget in every hand; money in every savings account: more, more, more for each generation until – what? When is enough enough? What are we striving for? What is the goal? Where does it end?

As we ponder the politician’s words, the American reality hits us in the face.

  • 13.5 million people officially listed as unemployed (a debatable statistic and one considered to be far too low, not inclusive of those having exhausted unemployment benefits, the homeless, the chronic unemployable, those living off the radar.)
  • 9.4 million involuntarily working only part-time.
  • 44.6 million people living below the poverty threshold.
  • 52 million people without medical insurance.
  • 1.2 million homes foreclosed in 2010 (for a total of how many since this mess began? Statistics on that are impossible to find. And another spike in foreclosures expected.)
  • A national debt of 14.2 trillion as of April 2, 2011 (see debt clock) equal to 96% of the GDP (Gross Domestic Product of 15.3 trillion.) Or, close to $50,000 per every man, woman and child in the country.
  • Cumulative private debt of $159 trillion
  • Deteriorating education and access to health care
  • Crumbling national infra-structure
  • And so on and so forth….

We have been living high on a whole herd of borrowed hogs, well beyond our means for a long, long time, and as always happens when a body abuses debt, the rate of growth of that debt is escalating, compounding and we are borrowing to pay the interest on debt already spent, transferring interest to principle. (Which anyone who has ever borrowed from one credit card to make a payment on another knows, only hastens the end, especially if the rate of income available to pay the debt declines instead of increases.)

It is clear the American dream has become the American myth, empty rhetoric in electoral propaganda. Still, you hear the promises every day.

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"My plan gives Americans tax cuts that will help our economy to grow."

"These tax cuts will not undermine our economy. They will speed economic growth."

"That is the right way to cut taxes -- pro-family, pro-education, pro-economic growth."

Indeed, such words fall from the lips of our legislators and would-be legislators like rain from the heavens. One cannot fault them for spouting these vacuous pledges; they are supported by some of our leading specialists in economics.

"The key is productivity. If productivity growth in the United States were to recover to something like its rates of the 1950s and 1960s, practically everything would fall into place; it would make many, but not all, of the problems we face fade away." – Paul Krugman, The Age of Diminished Expectations

For now, let’s do away with all the reasons we can’t travel back in time to the last golden age, or how different today’s world is from the mid-twentieth century, or the fact the world’s population has more than doubled since 1960, from 3 billion to 7 billion. Let’s look at the underlying premise.

The vast majority of economists agree that higher rates of growth would solve all our economic woes: frozen wages, poverty, the trade deficit, tax income shortfall, the national debt, unemployment… They are right. Our economy is structured to thrive only when it grows. The foundation of our economy is such that it will stagnate and even deteriorate when growth is not possible.

Ah – therein lies the problem.

The world is finite. Its resources are finite. And Americans are not the only people on the face of the planet.

It is a fact that a consumption-based economy cannot continue to grow forever in a world of limited resources. It is only a matter of time before trouble strikes. In fact, it already has – something we prefer to sweep under the rug and ignore, preferring instead to cling to our old myth of perpetual growth.

Where are we headed?

That’s the subject of this article.

Where we are

We are in a time of great change, and as always, change creates anxiety. For such an adaptive species, we fight change with an astonishing might. Witness the clamor of those demanding we go back, back to a better time, a more affluent time, a time of more purity of purpose (or so they believe,) back to a time that truly never existed. We wax nostalgic over the past, forgetting the past has been glorified, Disneyfied and become little more than legend. Even if this were not so, we simply cannot go back; the past is gone, non-existent and what may have once served us as we were then, will not do so now.

This attachment to the past and fear of the future freezes us in our tracks at a time when action and direction is critical. Like ostriches, we bury our heads in the sands of time so as not to see the abyss opening at our feet. We waste our energy arguing over empty political rhetoric, our resources in meaningless distraction. We stand divided as though we have any number of choices. We deny the undeniable. We worry and fret over a meaningless list of figures as though the world's accounting system is our biggest worry.

Our inability to accept what may come to be our future -- or to deal with the present effectively -- is predicated on a number of myths, basic lies we’ve come to accept as truths.

the-myth-of-economic-growth
  • Myth #1 – Wealth can be generated

Just as something cannot be made from nothing, wealth is not generated. It is amassed. It merely changes hands. To arrive in one man’s bank account means it left another’s – figuratively speaking.