Dr Tadhg O'Mahony

28 May 2021

The simple and straightforward answer to this question is no, not in its current form. 

In environmental sustainability, economic growth is the megadriver behind climate and ecological breakdown, this is a robust conclusion in sustainability science.

For social sustainability, growth is inappropriately shared and is driving inequality. Luxuries are consumed at the expense of basic needs, inequality has become toxic to democracy, meritocracy and mental health, and is undermining society. While this conclusion has been sidelined in recent decades of neoliberal politics, supported by the dominance of neoclassical economics, the conclusion is not terribly controversial in itself, it has a heritage from ancient Greek philosophy, through major world religions to modern day Nobel economics Laureates.

Underpinning the support offered to economic growth, as the appropriate goal and metric of progress, is the belief that growth pushes technological change and improved living standards. These beliefs are not necessarily false, but they are certainly incomplete. To cease at this point requires us to be blind to far more important conclusions. Levels of average wellbeing are generally not improving globally, inequality is growing in many nations and technological change drives far more damage than the meagre efficiency improvements it can be attributed to. Meanwhile natural systems are heading for collapse.

This poses considerable challenges for neoclassical economics, and the political science made subordinate to it, shorn of the necessary ethical dimensions, it reproduces questionable conceptual foundations (equilibrium, rationality, perfect information, self-interest and ‘utility’), and is invariably divorced from its crucial relational and systems context with society and nature. The Berkeley Ecological economist, Richard Norgaard, has ably described the predicament in his seminal essay for the Great Transition Initiative: “The Church of Economism and Its Discontents”. Norgaard, who is writing a book on the topic, describes the ethical and epistemological challenges as ‘economism,’ -the reduction of all social relations to market logic- as an uncritical economic creed. This creed dominates our politics, colonises our minds, and is profitable and preferable to minority interests, chiefly male, middle-class and white. The creed, as applied today in neoliberal politics, has adopted grotesque concepts of ‘freedom,’ which amounts to freedom for the capital of a wealthy minority, and has been used to advocate lax regulation, small government, low tax and public austerity. All of these ideological positions are deeply implicated in key political challenges that have arisen over the last four decades.

This is the problem of modernity, writ large in the failure of politics, or indeed economics, to resolve the problems caused by the market. A tool of the status quo is increasingly problematic in a time of crisis, in a time that requires urgent transformation. In sub-disciplines such as heterodox, ecological, pluralist and feminist economics, transformation can be observed, in reconnecting with ethics, and with systems beyond the individual, renovating towards a philosophy of development that supports the weight of rhetoric above.

Today’s publication in the journal of the Spanish Ministry of Commerce, Industry and Tourism “Spain’s Index of Sustainable Economic Welfare. Are welfare and sustainability compatible?” discusses some of these concerns, in the context of indicators of progress for Spain. It demonstrates that economic growth, as GDP, is inadequate as a measure of progress, and that policy itself needs to be anchored in the ends -wellbeing and sustainability- rather than the means, in economic growth.

 Richard Norgaard, “The Church of Economism and Its Discontents,” Great Transition Initiative (December 2015), http://www.greattransition.org/publication/the-church-of-economism-and-its-discontents. 

O`Mahony, T. (2021). Spain’s Index of Sustainable Economic Welfare. Are welfare and sustainability compatible?. Cuadernos Económicos De ICE, (101). https://doi.org/10.32796/cice.2021.101.7193