Environment: As ordinary citizens it would be better if we were informed about all ideas

They did not last long but were replaced by others who also had plans for economic growth, but different plans. Since that time the media has been full of economists and politicians from all parties all talking about how to increase growth, but what is missing in this discussion is an explanation of what ‘growth’ is.

The print and television media have been very poor at explaining what these people mean when they talk about ‘growth’, so this is an attempt to explain it.

On the face of it, growth is a good thing: we enjoy it when our children grow up, we plant seeds and bulbs hoping that things will grow, and perhaps because it is a simple idea we never question what politicians and economists are talking about. What they mean when they say the economy is growing is that something called the Gross Domestic Product (GDP) is increasing. GDP is a single number, calculated by adding together all the financial transactions that go on in a country every month. So when GDP increases it means that the value of these financial transactions is increasing.

Now, what financial transactions can be included in calculating GDP is decided by the Organisation for Economic Co-operation and Development, the OECD. This means that it is easy to compare the GDP of different countries to make sure that everyone is counting the same transactions. Some transactions which go into the GDP are easy to imagine: every time you go to the supermarket, ker-ching, the GDP goes up. But the GDP also includes estimates of transactions for the services of sex workers and for the sale of illegal drugs, so next time you are offended by seeing a sex worker or a drug dealer on the street, please remember that they are simply doing their best to increase economic activity in the country and should be congratulated.

GDP calculations are not interested in whether the financial transaction is for a good thing or a bad thing. In 2010 the explosion of the Deepwater Horizon oil rig contributed $65 billion to the United States’ GDP. This autumn, the residents of Kiveton Park have had to breathe in toxic fumes because a local recycling centre has an ongoing fire which is proving impossible to extinguish. I am sure they are reassured to know that every time the fire brigade attends to try and put out a new fire, ker-ching, up goes the GDP. The war in Ukraine will boost British and American GDP because we are selling weapons to Ukraine, ker-ching.

There is also a fundamental problem with talking about continuing economic growth. If the economy grows by 2% a year (a common target), the whole economy will double in size after 35 years. But how can we do this without increasing the number of people working? Impossible for our mainly service economy in the United Kingdom, unless we allow more immigration. Oops, not politically acceptable.

So when politicians and economists become obsessed by increasing growth and making GDP higher we really must question exactly what kinds of transactions they want to stimulate, because blindly increasing growth is most likely going to make the world more dangerous and less healthy in which to live.

But it does not have to be so. We could change the definition of what is included in GDP to take into account the enormous amount of work that goes on where there are no financial transactions. For example, grandparents looking after grandchildren, people (mainly women) looking after elderly parents, women (again mainly women) shopping, cooking and cleaning for their families. Putting an elderly parent into a care home and paying for it increases GDP, while looking after them at home does not and is not acknowledged or rewarded.

I think that if people really knew what growth and GDP meant, that they might see it for the enormous confidence trick that it actually is and suggest that we should measure the quality of our lives differently.

What are the other possibilities? We might think about a Genuine Progress Indicator (GPI), a measure used in some American cities which gives an economic value to indicators of a healthy society, such as air and water quality, protection given to the natural environment, and so on. We might think about measures of equality, such as the GINI Coefficient which can show what disparities there are between the rich and poor in a society (spoiler alert, the United Kingdom is one of the most unequal societies in the world), or even Gross National Happiness (spoiler alert again, increasing GDP does not increase happiness, and can make people feel worse).

Local newspapers do not often publish articles about basic economics such as GDP and growth, but this is one reason why politicians and economists get away with making such a mess of our lives. If we as ordinary citizens were better informed about ideas that these people throw around without explanation we would be better able to challenge them, and make real, positive changes in our lives.