Social Limits to Growth
Ever since the publication of The Wealth of Nations in 1776, growth has been recognized as the distinctive characteristic of a capitalist society—at once its chief glory and its principal concern. As Smith pointed out, the process of accumulation of wealth brought about a social result previously unknown in history, namely the extension of “improvements” to the lower ranks of the people. But as Ricardo was soon to add, and Marx to hammer home, growth brought social dangers as well as material betterment. In Ricardo’s view the process of growth seemed likely to terminate in a stagnant state in which wealth would be transferred mainly into the hands of the landowners. And in Marx’s view, the accumulation process was not only inherently unstable, bringing with it recurrent periods of business ruin, but was bound eventually to create the conditions for the eruption of a new, anticapitalist, social order.
In our own time growth continues to be celebrated and worried over. More and more, growth has come to be recognized as the most important precondition for social harmony—indispensable for the maintenance of high employment, essential for the provision of the rising consumption standards that all have come to expect of capitalism. At the same time, economists have also begun to concern themselves with a heretofore ignored aspect of growth—its encroachment on the carrying capacity of the globe. A recent report by Wassily Leontief to the United Nations (The Future of the World Economy), for example, makes clear the enormous scale of social and technological effort required to sustain global growth for another twenty-five years. Although the report can be read optimistically as a demonstration that another twenty-five years of expansion is possible, to me its pessimistic implications with regard to the difficulties of continuing growth beyond that period are far more impressive.
To date, however, the concerns about growth have mainly been technical, some having to do with the control mechanisms required to keep the elements of an expanding system in balance, others with the boundaries and problems posed by resources or the environment. Only in the background has attention been paid to another aspect of the growth problem. This is the curiously disappointing, even negative, effects that growth has brought. A few observers have indeed remarked on the hollowness of the process that has been so uncritically admired. Richard Easterlin, in a much quoted study (“Does Money Buy Happiness?” The Public Interest, Winter 1973), has examined a wide variety of interviews on well-being conducted in this and other nations over the last thirty-odd years and noted that an improvement in US incomes had been accompanied by no change at all in the percentage of persons reporting themselves as “happy.” Similar polls disclose no shift toward “happiness” when we compare rich countries with poor ones. “Are we locked on a hedonic treadmill?” muses Easterlin.
Other economists have called into question the misleading nature of Gross National Product as a measure of “growth.” Conventional GNP includes outputs …
This article is available to online subscribers only.
Please choose from one of the options below to access this article:
Purchase a print premium subscription (20 issues per year) and also receive online access to all all content on nybooks.com.
Purchase an Online Edition subscription and receive full access to all articles published by the Review since 1963.
Purchase a trial Online Edition subscription and receive unlimited access for one week to all the content on nybooks.com.