Growth is Not Everything

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Rishi Sunak’s top appointments now that he is Prime Minister are concerning, particularly in the Home Office.

It isn’t too soon to say he should ignore much of what pundits are throwing around as advice. Too many say growth, growth, growth. He has to make the UK’s economy grow. They have been inundating news programs with that message.

It’s what Liz Truss said. We all know how that turned out.

If you have read Thomas Piketty’s weighty tome Capital in the 21 Century (disclosure: this is an affiliate link), you may remember a striking detail from his data. Unless something drastic happens to change productivity, such as the Industrial Revolution, economic growth tends to track with population growth. Not always, but most of the time.

The UK threw a spanner in the works for immigration and axed many of its partnerships. Political severing of ties caused a precipitous drop in chances for research collaboration. We are not going to have rapid population growth and we are not about to spark the next technological leap for the world. The UK is near the bottom of most current measures of advances economies. We aren’t growing as fast as the others. We aren’t faring as well as the others.

Pundits calling for a growth growth growth agenda are not facing reality. As Grandma would have said, you can’t wring blood out of a turnip.

Growth is not everything. In a world that is burning from excessive consumption, constant economic growth shouldn’t even be desirable. A safe, healthy, comfortable equilibrium should be more desirable. Not the constant racetrack of capitalism’s dreams, but a calmer pace with better balance. Multiple societies around the world lived that way for centuries until capitalism and population growth combined to push a dramatic growth imperative.

So far I don’t see pursuit of equilibrium coming from the latest incarnation of UK government, or from most other governments.

For much of the UK getting more and more isn’t in the cards. Setting our sights on enough to have a decent life, even enough to just get by, is more pragmatic. When a critical mass of us are in that position, the government will have to face reality too. Reality doesn’t budge for anyone and it’s saying growth growth growth isn’t a genuine possibility for quite some time ahead.

If you aren’t in the UK, take a long look at us. A few countries around the world have loud, angry groups rising in power that want to do some variation on what the UK has been doing. Isolationism, nationalism, emphasis on “the economy” above all else as code for trickle-down (supply side) policies that actually push more of the pie to those at the very top, diversion of the resulting pain onto any convenient group that looks different...

You don’t have to speculate about what that can do to a nation if it prevails. A sterling example (pun intentional) is right here.