Growth and its Tradeoffs
Daniel Susskind’s 2024 book Growth: A Reckoning has received some enthusiastic reviews. Kate Barker described it as “an excellent book, developing a clear argument and not afraid to look really big questions squarely in the eye” (Barker 2024). Susskind is a professor at King’s College, London, and Robert Bellafiore Jn. wrote that his book “considers the debates over growth’s causes, its recent elevation as a priority for governments, policies for promoting it, and rising concerns about its downsides” describing the work as “a concise and informative study of the idea, its past, and its potential future” (Bellafiore, 2024). Alexander Bishop wrote at greater length in his article “Why not degrowth?” He noted that for Susskind growth “is a recent development. For most of the world’s history, from when humans started farming until roughly 1800, there was no meaningful growth. This is the period that Susskind calls “the great stagnation”. It is only since the industrial revolution that the global economy has taken off” (Bishop, 2024). All three reviewers nevertheless have reservations about aspects of Susskind’s work.
Susskind states that some see economic growth as central to
public life, and that in most countries today the main goal of economic policy
is to increase Gross Domestic Product (GDP). The Cold War motivated a
relentless drive to increase GDP, but was not the only reason why it became a
priority; leaders associated it with higher living standards, job creation, levels
of education, and life expectancy. However, the technologies that produced economic
growth have also damaged our climate, created inequality, threatened work,
undermined politics and disrupted communities. The price of economic growth is
so great that some believe it should be deliberately slowed or even reversed, a
policy known as ‘degrowth’.
The debate between advocates of continued economic growth
and of degrowth provide a framework in which to discuss the issues involved.
Susskind insists on recognition of the benefits that growth has brought: for
the vast majority of human history subsistence was the norm. Recent decades
have not only brought great reductions in world poverty, but also for many, better
health and education, more leisure, greater access to cultural activities, and
more happiness. Nevertheless “the price of our current pursuit of economic
growth is too great to ignore.”
Susskind begins his discussion of degrowth by quoting Greta
Thunberg on “money and fairy tales and eternal economic growth” and David
Attenborough on the impossibility of “indefinite growth on a physically finite
planet”. The degrowth movement is largely focussed on climate change, and
though its aims may be poorly defined, the movement is influential and prompts
useful debates about the possibility of prosperity without growth and the necessary
limits of growth. Degrowthers are “brave enough to reach an unpleasant but
inevitable conclusion – that something now has to give”. While degrowthers
correctly diagnose the harms done by economic growth, they are wrong to say
that economic growth cannot continue indefinitely, because their claim is based
on classical economics which saw growth as deriving only from the consumption
of material resources. This view has to be revised, since much economic life is
now service-based and “far more weightless than the old world of farms and
factories”. Modern economic thought has realised that “growth cannot be
realised simply by using more and more tangible resources” but only through the
right kind of technological progress combined with “discovering better and
better ways to use the finite resources available to us”. The universe of ideas
that we can draw upon is practically infinite, and the most serious limitation
on continued growth may in fact be a lack of imagination. (Bishop however points
out that we are “using one non-renewable resource at an alarming rate: land … Humans
already use the majority of the world’s ice-free land area, mostly for
producing food.”)
Susskind notes that supporters of degrowth do not necessarily
equate it with negative growth or with recession; they argue that degrowth is
planned, whereas recession is typically unplanned. He points out that many
recessions have nevertheless been brought about deliberately. Degrowth would
condemn “most of humankind to material poverty” including future generations.
Degrowthers do not realise that economic growth is “an unfinished revolution”
without which “we do not stand a chance of achieving even our most basic goals”
such as eradicating poverty and providing good healthcare and education. To accept
that growth can bring no further benefits is “to suffer a total imaginative
breakdown about how much we could achieve in the future”, and Susskind proposes
four ways to change the nature of growth while reducing or even eliminating its
cost.
The first proposal is to liberate ideas that are at present
protected by intellectual property (IP) rights – copyright, patent and trade
mark. IP law “can be reformed if we have the will” but while weaker IP rights
could be beneficial, a balance is needed between exclusivity and being too lax.
Present IP law is tight for reasons dating from pre-internet days; because of ‘imperialism’
that widened the scope of patent protection, re-patenting and ‘absurd patents’;
and weaponization such as anti-competitive business behaviour and patent
hoarding. We should enforce existing patent rules, terminate idle patents, fund
the existing IP system better and explore alternatives to IP.
Ideas arising from research and development (R&D) and
protected by effective IP laws benefit their originators, but may be of much
greater potential benefit to society as a whole. This leads to the second
recommendation, that the state should play a role in narrowing the “gap between
the private and social value of R&D”. In many countries R&D expenditure,
as a fraction of GDP, has collapsed since the mid-20th century; and
in absolute terms, Facebook spends much more on R&D than the UK. While
there are valuable debates on how and where to spend R&D money, the
important point is to spend more: “We need to invest in all sectors, both the
known and the unknown.”
Leaders in America’s technology sector have been “loud in
lamenting the lack of qualified workers available for hire” and the third
recommendation is to encourage more people into R&D work. On a short time
scale, and in some countries, this can be done by allowing more immigration.
Within a population, ‘home grown’ talent can be encouraged by removing barriers
to education, whether in the form of race, gender or family income: “inequality
is inefficient”.
The final idea is to increase the productivity of those
working in R&D. Susskind notes that “there is no theoretical limit to how productive
a worker could be in the future”, but the present trend is towards lower
productivity. Reversing this trend might involve reducing academic bureaucracy
and the time spent on grant administration, and more promisingly to make more
use of computer assistance in the search for new ideas. (A prime example is the
solution of the protein-folding problem.)
A new direction implies steering a course between the two
extremes of rapid growth accompanied by costs such as climate damage, and
degrowth with fewer costs. What is meant by growth changes with time; once it
meant more goods, now it might mean more financial services; in the future “it
might mean something different again”. We can “in principle shape both the
quantity and the quality of growth”.
One way of doing this is by directing technological progress.
This happened during the Industrial Revolution in Great Britain, when relatively
high wages made it profitable to research labour saving methods such the steam
engine, spinning jenny and power loom. Recently soaring labour costs in China
promoted the use of industrial robots. Taxes, regulations and social norms can
direct technological progress to specific ends that are socially worthwhile: “By
substantially changing the economic incentives that people face, we can steer
the technological progress that is underway and shape the nature of the
transformation that will take place.” Our power to shape the new technologies
implies a moral responsibility to “take decisions that will steer us towards a
better world”.
Future economic growth should involve a search for those areas
where growth will involve no tradeoffs; no harmful effects on climate and the other
desirable ends. Where such tradeoffs cannot be eliminated it may be possible to
minimise them by economic incentives and changes in taxes, laws, subsidies and
regulations. The “Renewable Revolution” is cited as an example of reduced
tradeoffs due to technological progress. An example of the use of taxation
could be in the form of “a serious carbon tax”. Economies can be transformed
through directed technological development and financial tools, as illustrated
by South Korea. In some cases though, it may be necessary to accept that a
tradeoff is inevitable.
Focus on “the narrow problem of increasing GDP” avoided the
moral question of tradeoffs, and it is for politics to address the problems of
“what ends we care about, and how to weigh them against each other”. The
position of ‘growth agnosticism’ also described as a ‘post-growth’ outlook,
supports a more balanced position where growth is not given priority over other
ends. However it underestimates “the extraordinary promise of what economic
growth can do for humanity”. Susskind proposes an approach in which growth is
not disregarded, but is demoted in the hierarchy of human ends. This attitude would
recognise the plurality of different ends and accept that they are
incommensurable, abandoning the attempt to capture them in a single number such
as GDP.
The question of ‘intergenerational equity’ is a critical
problem in economics. Should we become poorer to protect future ends, or should
people of the future sacrifice their ends to maintain our prosperity? “Our
contemporary culture is undeniably short-termist” but ‘long-termism’ has become
popular alongside ‘Effective Altruism’. A view that embraces all of our
potential descendants “infuses the future with immense moral gravity” for some;
but for others “it pulls our attention away” from tackling the misery of those
alive today. Ideas like transhumanism make it clear that ‘we have no idea what
the future will be like’ and can hardly anticipate the needs of far future
generations. Susskind concludes that we owe the future far less than
long-termism demands, but “far more than our prevailing short-termist culture
encourages”.
The answers to questions about responsibility to the future
and the ends we value should be solved not by “policy makers, economists or
technocrats”, but through politics in collective deliberation. While there is
“a serious need for new methods of collective deliberation”, the referendum is
a not a suitable tool. We need “new institutions that would bring citizens
together to debate important issues again and again … Mini-publics … are a
forgotten part of the Western political tradition … it seems necessary that
citizens be asked to engage with the moral questions presented by the growth
dilemma”. They include citizen assemblies, citizens’ juries and citizen panels,
consensus conferences, citizen dialogues and citizen summits. The direction of
our future is at stake, and citizen participation may be essential.
Regarding ‘mini-publics’, Alexander Bishop found Susskind unconvincing,
finding it difficult to imagine “that such mini-publics would achieve the kinds
of systemic changes that we need to see and on the timeframes that are now
required. It is true that we need to revitalise our politics, but it is not
clear that the creation of mini-publics is the way to go about this”. Leaning
into “possibilities of growth through innovation” is a positive way to engage
with the future but Bishop thinks it likely that “by following this story we
will not manage to decouple our economies from their broader ecological impacts
in the timeframes that are required ... There is good reason, therefore, to
think that we need to tell a different and more radical story.” From the
ecological viewpoint “Susskind’s book can make for a frustrating read because,
ultimately, we are running out of time”. Kate Barker commented that Susskind’s
answers to dilemmas “are often imprecise” and while his conclusion is
optimistic she has “a nagging sense that he does not quite believe it.”
Robert Bellafiore points to an omission in Susskind’s
analysis: “While Growth covers an impressive range of perspectives and issues,
Susskind may have missed the ultimate conflict: economic expansion versus
population degrowth … Growth creates wealth, but wealth reduces birth rates—a
change that, over time, slows growth. In a wealthier world, there could be
fewer and fewer people to generate the new ideas that Susskind puts at the
center of his theory, and geriatric societies are unlikely to have the energy to
implement what ideas remain”.
References
Barker, K., 2024, Growth: A Reckoning, The Society of
Professional Economists, online, accessed 22 May 2025
https://spe.org.uk/reading-room/book-reviews/growth-a-reckoning/
Bellafiore, R., 2024,
The Anomaly of Economic Growth, City Journal, online, accessed 22 May 2025
https://www.city-journal.org/article/review-of-growth-a-history-and-a-reckoning-by-daniel-susskind
Bishop, A., 2025, Why not degrowth? Medium, https://medium.com/@alexander.js.bishop/why-not-degrowth-6be2c9f1084b
Susskind, D. 2024, Growth: A Reckoning, London, Penguin
Random House UK
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