-Caveat Lector-
The Growth Consensus Unravels
Jonathan Rowe, Dollars and Sense
Economics has been called the dismal science, but beneath its gray exterior is
a system of belief worthy of Pollyanna.
Yes, economists manage to see a dark cloud in every silver lining. Downturn
follows uptick, and inflation rears its ugly head. But there's a story within
that story -- a gauzy romance, a lyric ode to Stuff. It's built into the
language. A thing produced is called a "good," for example, no questions asked.
The word is more than just a term of art. It suggests the automatic benediction
which economics bestows upon commodities of any kind.
By the same token, an activity for sale is called a "service." In conventional
economics there are no "dis-services," no actions that might be better left
undone. The bank that gouges you with ATM fees, the lawyer who runs up the bill
-- such things are "services" so long as someone pays. If a friend or neighbor
fixes your plumbing for free, it's not a "service" and so it doesn't count.
The sum total of these products and activities is called the Gross Domestic
Product, or GDP. If the GDP is greater this year than last, then the result is
called "growth." There is no bad GDP and no bad growth; economics does not even
have a word for such a thing. It does have a word for less growth. In such a
case, economists say growth is "sluggish" and the economy is in "recession."
No matter what is growing -- more payments to doctors
because of worsening health, more toxic cleanup -- so long as there is more
of it, then the economic mind declares it good.
This purports to be "objective science." In reality it is a rhetorical
construct with the value judgments built in, and this rhetoric has been the
basis of economic debate in the United States for the last half century at
least. True, people have disagreed over how best to promote a rising GDP.
Liberals generally wanted to use government more, conservatives less. But
regarding the beneficence of a rising GDP, there has been little
debate at all.
If anything, the Left traditionally has believed in growth with even greater
fervor than the Right. It was John Maynard Keynes, after all, who devised the
growth-boosting mechanisms of macroeconomic policy to combat the Depression
of the 1930s; it was Keynesians who embraced these strategies after the War
and turned the GDP into a totem. There's no point in seeking a bigger pie to
redistribute to the poor, if you don't believe the expanding pie is desirable
in the first place.
Today, however, the growth consensus is starting to unravel across the
political spectrum and in ways that are both obvious and subtle. The issue is
no longer just the impact of growth upon the environment -- the toxic impacts
of industry and the like. It now goes deeper, to what growth actually consists
of and what it means in people's lives. The things economists call "goods" and
"services" increasingly don't strike people as such. There is a
growing disconnect between the way people experience growth and the way the
policy establishment talks about it, and this gap is becoming an unspoken
subtext to much of American political life.
The group most commonly associated with an antigrowth stance is
environmentalists, of course. To be sure, one faction, the environmental
economists, is trying to put green new wine into the old bottles of economic
thought. If we would just make people pay the "true" cost of, say, the gasoline
they burn, through the tax system for example, then the market would do the
rest. We'd have benign, less-polluting growth, they say, perhaps
even more than now. But the core of the environmental movement remains deeply
suspicious of the growth ethos, and probably would be even if the environmental
impacts somehow could be lessened.
In the middle are suburbanites who applaud growth in the abstract, but oppose
the particular manifestations they see around them -- the traffic, sprawl and
crowded schools. On the Right, meanwhile, an anti-growth politics is arising
practically unnoticed. When social conservatives denounce gambling, pornography,
or sex and violence in the media, they are talking about specific instances of
the growth that their political leaders rhapsodize on other days.
Environmentalists have been like social conservatives in one key respect. They
have been moralistic regarding growth, often scolding people for enjoying
themselves at the expense of future generations and the earth. Their concern
is valid, up to a point -- the consumer culture does promote the time horizon
of a five year old. But politically it is not the most promising line of attack,
and conceptually it concedes too much ground. To moralize about consumption as
they do is to accept the conventional premise that it really is something chosen
-- an enjoyable form of self-indulgence that has unfortunate consequences for
the earth.
That's "consumption" in the common parlance -- the sport utility vehicle
loading up at Wal-Mart, the stuff piling up in the basement and garage. But
increasingly that's not what people actually experience, nor is it what the
term really means. In economics, consumption means everything people spend
money on, pleasurable or not. Wal-Mart is just one dimension of a much larger
and increasingly unpleasant whole. The lawyers' fees for the house settlement
or divorce; the repair work on the car after it was rear-ended;
the cancer treatments for the uncle who was a three-pack-a-day smoker; the
stress medications and weight loss regimens -- all these and more are
"consumption." They all go into the GDP.
Cancer treatments and lawyer's fees are not what come to mind when
environmentalists lament the nation's excess consumption, or for that matter
when economists applaud America's "consumers" for keeping the world economy
afloat. Yet increasingly such things are what consumption actually consists of
in the economy today. More and more, it consists not of pleasurable things
that people choose, but rather of things that most people would gladly do
without.
Much consumption today is addictive, for example. Millions of Americans are
engaged in a grim daily struggle with themselves to do less of it. They want
to eat less, drink less, smoke less, gamble less, talk less on the telephone
-- do less buying, period. Yet economic reasoning declares as growth and
progress, that which people themselves regard as a tyrannical affliction.
Economists resist this reality of a divided self, because it would complicate
their models beyond repair. They cling instead to an 18th century
model of human psychology -- the "rational" and self-interested man -- which
assumes those complexities away. As David McClelland, the Harvard psychologist,
once put it, economists "haven't even discovered Freud, let alone Abraham
Maslow." (They also haven't discovered the Apostle Paul, who lamented that
"the good that I would I do not, but the evil that I would not that I do.")
Then too there's the mounting expenditure that sellers foist upon people
through machination and deceit. People don't choose to pay for the corrupt
campaign finance system or for bloated executive pay packages. The cost of
these is hidden in the prices that we pay at the store. As I write this, The
Washington Postis reporting that Microsoft has hired Ralph Reed, former head
of the Christian Coalition, and Grover Norquist, a right-wing polemicist, as
lobbyists in Washington. When I bought this computer with Windows 95, Bill
Gates never asked me whether I wanted to help support a bunch of
Beltway operators like these.
This is compulsory consumption, not choice, and the economy is rife with it
today. People don't choose to pay some $40 billion a year in telemarketing
fraud. They don't choose to pay 32 percent more for prescription drugs than
do people in Canada. ("Free trade" means that corporations are free to buy
their labor and materials in other countries, but ordinary Americans aren't
equally free to do their shopping there.) For that matter, people don't choose
to spend $25 and up for inkjet printer cartridges. The manufacturers design
the printers to make money on the cartridges because, as the Wall
Street Journal put it, that's "where the big profit margins are."
Yet another category of consumption that most people would gladly do without
arises from the need to deal with the offshoots and implications of growth.
Bottled water has become a multibillion dollar business in the United States
because people don't trust what comes from the tap. There's a growing market
for sound insulation and double-pane windows because the economy produces so
much noise. A wide array of physical and social stresses arise from the
activities that get lumped into the euphemistic term "growth."
The economy in such cases doesn't solve problems so much as create new problems
that require more expenditure to solve. Food is supposed to sustain people, for
example. But today the dis-economies of eating sustain the GDP instead. The
food industry spends some $21 billion a year on advertising to entice people to
eat food they don't need. Not coincidentally there's now a $32 billion diet and
weight loss industry to help people take off the pounds that inevitably result.
When that doesn't work, which is often, there is always the vacuum pump or
knife.
There were some 110,000 liposuctions in the United States last year; at five
pounds each that's some 275 tons of flab up the tube.
It is a grueling cycle of indulgence and repentance, binge and purge. Yet each
stage of this miserable experience, viewed through the pollyanic lens of
economics, becomes growth and therefore good. The problem here goes far beyond
the old critique of how the consumer culture cultivates feelings of inadequacy,
lack and need so people will buy and buy again. Now this culture actually makes
life worse, in order to sell solutions that purport to make it better.
Traffic shows this syndrome in a finely developed form. First we build
sprawling suburbs so people need a car to go almost anywhere. The resulting
long commutes are daily torture but help build up the GDP. Americans spend
some $5 billion a year in gasoline alone while they sit in traffic and go
nowhere. As the price of gas increases this growth sector will expand.
Commerce deplores a vacuum, and the exasperating hours in the car have spawned
a booming subeconomy of relaxation tapes, cell phones, even special bibs.
Billboards have 1-800 numbers so commuters can shop while they stew. Talk radio
thrives on traffic-bound commuters, which accounts for some of the contentious,
get-out-of-my-face tone. The traffic also helps sustain a $130 billion a year
car wreck industry; and if Gates succeeds in getting computers into cars, that
sector should get a major boost.
The health implications also are good for growth. Los Angeles, which has the
worst traffic in the nation, also leads -- if that's the word -- in hospital
admissions due to respiratory ailments. The resulting medical bills go into
the GDP. And while Americans sit in traffic they aren't walking or getting
exercise. More likely they are entertaining themselves orally with a glazed
donut or a Big Mac, which helps explain why the portion of middle-aged
Americans who are clinically obese has doubled since the 1960s.
C. Everett Koop, the former Surgeon General, estimates that some 70 percent
of the nation's medical expenses are lifestyle induced. Yet the same lifestyle
that promotes disease also produces a rising GDP. (Keynes observed that
traditional virtues like thrift are bad for growth; now it appears that health
is bad for growth too.) We literally are growing ourselves sick, and this puts
a grim new twist on the economic doctrine of "complementary goods," which
describes the way new products tend to spawn a host of others. The automobile
gave rise to car wash franchises, drive-in restaurants, fuzz busters, tire
dumps, and so forth. Television produced an antenna industry, VCRs, soap
magazines, ad infinitum. The texts present this phenomenon as the wondrous
perpetual motion machine of the market -- goods beget more goods. But now the
machine is producing complementary ills and collateral damages instead.
Suggestive of this new dynamic is a pesticide plant in Richmond, California,
which is owned by a transnational corporation that also makes the breast cancer
drug tamoxifen. Many researchers believe that pesticides, and the toxins
created in the production of them, play a role in breast cancer. "It's a pretty
good deal," a local physician told the East Bay Express,a Bay Area weekly.
"First you cause the cancer, then you profit from curing it." Both the alleged
cause and cure make the GDP go up, and this syndrome has become a central
dynamic of growth in the U.S. today.
Mainstream economists would argue that this is all beside the point. If people
didn't have to spend money on such things as commuting or medical costs,they'd
simply spend it on something else, they say. Growth would be the same or even
greater, so the actual content of growth should be of little concern to those
who promote it. That view holds sway in the nation's policy councils; as a
result we try continually to grow our way out of problems, when increasingly
we are growing our way in.
If people choose what they buy, as market theory posits, then the sum total
of all their buying must be the greatest good of all. That's the ideology
behind the GDP. But if people don't always choose, then the model starts to
fall apart, which is what is happening today. The practical implications are
obvious. If growth consists increasingly of problems rather than solutions,
then scolding people for consuming too much is barking up the wrong tree. It
is possible to talk instead about ridding our lives of what we don't
want as well as forsaking what we do want -- or think we want.
Politically this is a more promising path. But to where? The economy may be
turning into a kind of round robin of difficulty and affliction, but we are
all tied to the game. The sickness industry employs a lot of people, as do ad
agencies and trash haulers. The fastest-growing occupations in the country
include debt collectors and prison guards. What would we do without our
problems and dysfunctions?
The problem is especially acute for those at the bottom of the income scale who
have not shared much in the apparent prosperity. For them, a bigger piece of a
bad pie might be better than none.
This is the economic conundrum of our age. No one has more than pieces of an
answer, but it helps to see that much growth today is really an optical
illusion created by accounting tricks. The official tally ignores totally the
cost side of the growth ledger --the toll of traffic upon our time and health
for example. In fact, it actually counts such costs as growth and gain. By the
same token, the official tally ignores the economic contributions of the
natural environment and the social structure; so that the more the economy
destroys these, and puts commoditized substitutes in their places, the more
the experts say the economy has "grown." Pollute the lakes and oceans so that
people have to join private swim clubs and the economy grows. Erode the social
infrastructure of community so people have to buy services from the market
instead of getting help from their neighbors, and it grows some more. The real
economy -- the one that sustains us --has diminished. All that has grown is the
need to buy commoditized substitutes for things we used to have for free.
Today we need to establish new ground rules for the economy. It took centuries
for the market to emerge from the stagnation of feudalism. The next organizing
principle,
whatever it is, most likely will emerge slowly as well. This much we can say
with certainty. As the market hurdles towards multiple implosions, social and
environmental as well as financial, it is just possible that the economics
profession is going to have to do what it constantly lectures the rest of us
to do: adjust to new realities and show a willingness to change.
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