The Growth Conundrum | Govind Bhattacharjee

Measurement of the GDP is central to a modern economy and its growth is essential for the stability of governments. But the GDP growth is based on increased consumption and production that cause continuous depletion of earth’s limited resources, and the process cannot go on indefinitely. At some point in time, the world must get reconciled to the idea of low growth or no growth, and be concerned with the stability of GDP rather than its growth. The emerging economic models like doughnut economics, post-growth economics, and degrowth theories are offering alternatives, focussing on sustainable consumption and production, a goal not covered by the United Nation’s SDGs. But that would require redefining the concept of growth itself and will involve a paradigm shift from quantity to quality. 

(I)

Modern economic theories are based on the concept of economic growth which in turn is closely related to increases in production, consumption, and the use of Earth’s natural resources which are mostly non-renewable. Modern economics and public policy will be in no man’s land without the concept of GDP to measure growth. GDP actually measures the flow of products and income, both representing different aspects of the same continuous flow. GDP being a single figure to capture growth is easy to measure and is widely used as a comparison standard. It remains central to governmental priorities all over the world; in fact, the legitimacy of governments rests on their ability to deliver economic growth and provide employment. Governments are obsessed with GDP growth as reflection of their performance, despite the fact that it leaves out too many things which are crucial to policymaking. Further, GDP cannot distinguish between good and bad spending for consumption or investment, neither can it reflect how the growth gets distributed among people and hence cannot capture inequality or its negative consequences upon society. It also does not count the natural capital and ecosystems of a country. Preserving natural resources is essential for intergenerational equity and the future growth of a country, but GDP assumes that natural resources are free. GDP calculations reflect natural resources only when they are extracted, commoditized and sold, even if it is environmentally unsustainable. In other words, GDP reckons the quantity of growth without any reference to quality. As Senator Robert Kennedy said in 1968, “Our gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country - it measures everything, in short, except that which makes life worthwhile.â€

GDP growth is simply based on more consumption, and hence more use of natural resources. Obsession with GDP growth has resulted in a ‘Great Acceleration’ in the loss of biodiversity, climate change, pollution and loss of natural capital which are all essential to economic growth. The time has now come to think about the decoupling of economic growth from resource consumption. Societies need to rethink their ideas of growth and progress if the planet and our future are to be saved. Unfortunately, consumption-led GDP growth does not offer any solution for sustainability. As we understand the downside of this growth, alternatives to mainstream concepts of economic growth like doughnut economics, post-growth and degrowth etc. are now emerging. But decoupling of economic growth from resource consumption still remains only a conjecture. The solution probably lies in a shift of our thinking towards quality rather than quantity, to purpose rather than production, to joy and empathy rather than consumption.

The consumption-driven growth of GDP is based on the increasing use of energy, and most of our energy are still obtained from non-renewable fossil fuels. Even if we shift towards renewable sources, there is a limit to which we can use the solar or other forms of energy without causing environmental damage. Despite increases in efficiency of energy use, GDP increases have caused increases in greenhouse gas emissions. GDP growth in emerging economies like China and India has generated a sizeable and affluent middle class leading to conspicuous consumption and ever more demands on earth’s limited resources. Technological development likewise has only led to more consumption and environmental degradation. Sustainable technology is a myth - even solar-powered electric vehicles or wind turbines have physical limits and exact environmental costs.

Environmentalists measure sustainability not only in terms of the carbon footprint but also in terms of another indicator called the material footprint (MF) which is the aggregate quantity of biomass, metal ores, construction minerals and fossil fuels used during production and consumption of a product. To give an example, a distance of one kilometre travelled by car, plane, train and bicycle leaves a material footprint respectively of 2.02 kg, 0.4 kg, 0.29 kg and 0.05 kg per capita. The global MF has increased by 70 percent from 43 billion metric tonne (MT) in 1990 to 92 billion MT in 2017 and is likely to grow to 190 billion MT by 2060 without concerted action by nations. What is more alarming — the MF is increasing faster than both population and GDP. Most of it is due to high-income nations which had a per capita MF of 27 MT in 2017, compared to only 2 MT for low-income countries and 4.7 MT for lower-middle-income countries like India. The MF of high-income countries is greater than their domestic material consumption, indicating that they consume on 9.8 MT of primary materials extracted from other countries. It is this offshoring of production to meet the demands of rich nations that is driving the ecological devastation in poorer countries. Every stage in the manufacture of any product or its disposal exacts its environmental costs in the form of habitat destruction, biodiversity loss and pollution. Since the industrial revolution, our capitalist socioeconomic system founded on growth without limits les led to the twin crises of climate change and the destruction of the environment. Earth Overshoot Day marks the date when humanity’s demand for ecological resources and services in a given year exceeds what Earth can regenerate in that year. In 1970s, it was December 30; in 2020, it was August 22, in 2023, it is August 2. Humanity is living on a deficit budget as far as Earth’s resources are concerned, and the deficit increases with every year.

We hoped that technology will be the answer to decouple growth in material use from economic growth, but in reality, it became another vehicle for satisfying the unlimited greed of corporates and more destruction of the environment. Besides, there are also physical and economic constraints to what it can do — examples are quantum physics or the second law of thermodynamics which places inexorable constraints on technological solutions. Even recycling or circular economy has its limits, 100 percent circularity is an impossibility. If material inputs are to match our recycling capacity, the economy has to be hugely downsized to become a very slow economy. While efficiency is limited by the laws of physics, there is no limit on the socioeconomic demands for consumption. Further, a low-income country requires exponential economic growth to catch up with the others, which will only increase the MF. Even if we start mining the materials from presently unmined sources like sea-beds, the absence of any limits to growth would ultimately devastate all marine ecosystems and if technology is able to increase the lifespan of goods we use, improve telecommunication so that we need to travel less, if we start sharing and repairing goods instead of freshly buying them, these will have their limits. The inescapable conclusion is that it is essentially impossible to decouple material extraction from economic growth, and that makes any possible transition to alternative economic paradigms based on equitable development and ecological sustainability very difficult if not impossible. Rich economies are not going to downscale production and consumption, and greening of production is not going to address the problems. The capitalist system based on higher consumption has not only led to the present environmental catastrophe but also caused extreme inequality and severe financial instability at times throwing the entire world into turmoil from time to time, as last seen in 2008.

Reduction of consumption will obviously reduce growth as measured by the GDP. Sustainability would require decreasing the GDP between 40 percent and 90 percent in affluent countries of the West, which would mean severe economic recession with cascading effects like collapse of stock markets, bankruptcies, unemployment and non-availability of credit leading to denial of human needs and resultant social chaos, which will make these choices unacceptable. The stakeholders in development are the states, corporations and individuals — especially the super-affluent consumers in a society who determine and drive the norms of consumption. As Thomas Wiedmann et al argued in an essay, after the basic material needs are fulfilled, an increasing proportion of consumption goes towards “positional goods†which are expensive but signify social status; their possession seems to increase the happiness of affluent people. [1] As the average income rises among general population, the positional consumption behaviour of the super-affluent population drives consumption norms across all strata of society for spending on these goods.

Humanity is not yet ready to consider compromising the GDP growth, as shown by SDGs adopted by the UN. SDG-8 aims at continued global GDP growth around 3 percent to eliminate hunger and poverty, but it contradicts SDG-12: Responsible Consumption and Production and SDG-13: Climate Action. These are simultaneously unattainable which makes the SDG framework inherently incoherent. In fact, the SDGs do not cover sustainable production and consumption, indicating that the world is not yet ready to abandon its cherished model of growth that will ultimately lead to the decay of the planet. As George Monbiot wrote in the Guardian, “Capitalism is killing the planet. It’s time we stop buying into our own destruction†. [2] The question is what are the alternatives available to us, if any?

(II)

In 1973, the German-born British economist E F Schumacher published his book, Small Is Beautiful, in which he argued that capitalism had brought higher living standards at the cost of deteriorating social values and depletion of natural resources like fossil fuels which are treated as expendables instead of capital by traditional economic theories. He warned against the “bigness†of large industries and large cities that would inevitably lead to the depletion of those resources. Questioning the necessity of ever-increasing growth, he advocated the use of intermediate technologies based on simple tools rather than advanced machines to improve people’s well being. Studying village-based economies in Myanmar, he harped on the philosophy of “enoughness†, stressing that people and Nature are interdependent. Citing Buddhist principles, he suggested that economic growth has to harmonise with spiritual values, and that “it is not a question of choosing between “modern growth†and “traditional stagnation†but to find the “right path of development, the Middle way between materialistic heedlessness and traditional immobility, in short, finding the right way to livelihood.†[3]

The above philosophy is deeply ingrained in Indian thoughts since ancient times, imbibed later by Tagore and Gandhi. Even in many religious, spiritual, and secular communities in the West, simple living, connection with Nature, and increased quality of life rather than dependence on material stuff are increasingly becoming popular. Even though all these efforts collectively do not even make a small dent in our entrenched ideas about economics and GDP, alternative models are emerging, focussing on multi-dimensional social well-being and environmental sustainability, instead of on GDP-focussed growth, like Kate Raworth’s Doughnut Economics (2012). In her model as shown in the figure below, the safe space for humanity to operate between the conflicting demands of human needs and environmental sustainability is indeed very narrow. Development in the traditional sense is an encroachment upon environment, but encroach upon Nature one step too far, her retribution starts shaking the very foundation of our social fabric for human well-being.

Source: Doughnut Economics, Kate Rawarth (2012)

There are also theories about post-prosperity (Wiedmann et al., 2020) or managing without growth, that is, by decoupling economic growth from social well-being. These approaches would need reforming our ideas about welfare state, labour markets, capitalism, healthcare, pension system, etc. to make them independent of GDP, which cannot come without significant changes in our value system and culture. This will necessarily lead to reduced consumption and production, cap trade and business profits, encourage green investments and must assure a universal basic income with reduced working hours to satisfy basic human needs. These theories believe that such changes, difficult though they are to implement, can be brought within the prevailing capitalist market system and democratic states. [4] A variation is the theory of “post-growth capitalism,†in which production for profit would continue, but the economy would be reorganized along very different lines. In “Prosperity Without Growth: Foundations for the Economy of Tomorrow†(2009), Tim Jackson, a British academic, calls on Western countries to shift their economies from mass-market production to local services such as nursing, teaching, and handicrafts—that could be less resource-intensive. “Prosperity consists in our ability to flourish as human beings — within the ecological limits of a finite planet,†Jackson wrote, “The challenge for our society is to create the conditions under which this is possible. It is the most urgent task of our times.†He thinks that “People can flourish without endlessly accumulating more stuff. Another world is possible.†[5] According to Dietrich Vollrath, the author of “Fully Grown: Why a Stagnant Economy Is a Sign of Success†, slow growth for industrialised countries as seen in most advanced economies is nothing to worry about. It is the shift in spending patterns and the consequent reallocation of economic activity away from goods and into services that determines the locus of human well-being: “Slow growth, it turns out, is the optimal response to massive economic success.†[6] Major economies are already experiencing what is known as “secular stagnation†as a result to aging population, higher life expectancy, low consumption, and low investment. But even a 2 percent growth in an advanced economy like the USA can expand the GDP significantly over time, doubling by 2055 by some estimates. The choices that humanity has to make will be all-important for the future.

In contrast, there are Degrowth theories (Demaria et al., 2013) which are more radical in approach and entail a shift beyond capitalism and the present centralised states, with some even advocating a participatory democracy without a state, thus reducing hierarchies. Degrowth is defined as “an equitable downscaling of throughput (that is, energy and resource flow through an economy, strongly coupled to GDP) with a concomitant securing of well-being†[7] to ultimately lead to a downscaled, socially just and ecologically balanced, steady-state economic system which might result in reduced GDP. This steady state economic system would be quite different from our current economic system — it would be an economy structured to balance growth with environmental integrity not only through efficient use of natural resources but also through fair distribution of the wealth generated from the use of those resources. In a steady-state economy, success is measured by the stability of the GDP rather than by its growth. Even in the beginning of capitalist ideas of economic growth, Adam Smith believed that sooner or later, any national economy has to settle down in a stationary equilibrium state where the GDP may not grow with time. [8] Whereas classical economists did not believe in government intervention to bring in the steady state equilibrium, the American economist Herman Daly, who promoted the concept of steady state economy in the 1970s through ecological analysis of natural resource flows through the economy, recommended immediate political action to establish the steady-state economy by imposing permanent government restrictions on all resource use. [9] A steady state economy is not a stagnating economy, but an economy that does not grow and is yet stable. No nation has as yet reached this state.

Degrowth does not equate ‘development’ with economic expansion. These theories, which seek to overhaul social values and production patterns, contend that within the prevailing socio-political and economic system in capitalist countries, decoupling between economic growth and social well-being is not possible, and the democratic state has to play a significant role in this transition in changing economic structures while putting limits on resources and lifestyles of people while reforming institutions to increase social control over economic actions. Even though it does not explicitly aim at the reduction of GDP, it accepts that GDP reduction will automatically follow as a consequence of these changes, which will “imply a shift beyond capitalism, e.g. preventing capital accumulation through dis-economics of scale and collective firm ownership, and thus require radical social change.†[10] While the GDP has increased in almost all countries over the years, the desirability, feasibility and wisdom of more consumption that drives higher GDP are increasingly being doubted and questioned, especially in view of the resulting crisis in climate and environment. As Giorgos Kallis, an ecological economist wrote, “The faster we produce and consume goods, the more we damage the environment. There is no way to both have your cake and eat it here. If humanity is not to destroy the planet’s life support systems, the global economy should slow down.†[11]

There is also another alternative growth model called “Green Growth†(OECD, 2011), promoted by OECD, EU and the World Bank, among others, which aims to foster “economic growth and development while ensuring that natural assets continue to provide the resources and environmental services on which our well-being relies†. [12] It relies on scientific and technological innovations like eco-design, green innovation, etc. that promotes sustainability. A 2018 report by the Global Commission on the Economy and Climate, an international consortium of various stakeholders, had declared, “We are on the cusp of a new economic era: one where growth is driven by the interaction between rapid technological innovation, sustainable infrastructure investment, and increased resource productivity. We can have growth that is strong, sustainable, balanced, and inclusive.†[13]

The problem with all these “alternative strategies†is that none of these offer a convincing strategy of containing the unintended consequences of low growth: “If growth were to be abandoned as an objective of policy, democracy too would have to be abandoned†, as Wilfred Beckerman, an Oxford economist, wrote in “In Defense of Economic Growth†in 1974, in response to a 1972-report titled “The Limits to Growth,†written by an international team of experts who warned that unrestrained GDP growth would lead to unmitigated disaster. “The costs of deliberate non-growth, in terms of the political and social transformation that would be required in society, are astronomical.†He argued that technology can substantially mitigate the ill-effects of environmental degradation, an approach the Green Growth theory also adopts, but Beckmann argued that a continuous rise in living standards is the key to avoiding social conflict, the absence of which would pit the losers, the poor, against the rich. The rising political polarisation seen in many Western countries in recent times accompanied by slower growth testifies to the validity of Beckerman’s arguments. [14]

In “Good Economics for Hard Times,†the Nobel Laureates Abhijit Banerjee and Esther Duflo argued that a larger GDP doesn’t necessarily mean a rise in human well-being—especially when it is distributed inequitably and its pursuit can be counter-productive. Indeed, as Thomas Picketty had pointed out in Capital in the Twenty-First century, economic growth has not contributed to decreasing inequality, either between or within countries. Banerjee and Duflo argued that rather than chasing “the growth mirage,†governments should concentrate on improving the poor citizens’ access to healthcare, education and social advancement. But there is an inherent problem with this argument. The ability of governments to extend welfare benefits like healthcare, education, etc., are not possible without economic growth and higher tax revenues. It is thanks to economic growth that absolute poverty ratio in the world as defined by the World Bank’s poverty line definition (US$1.90 per day) has fallen from 36 percent in 1990 to only 10 in 2015. China and India had lifted millions out of extreme poverty by integrating into the global capitalist economy and supplying low-cost goods and services to developed countries. It also created a wealthy middle class with enough purchasing power to sustain consumption-led growth. If, as the degrowth theorists demand, major industrialized economies were to cut back on consumption, the low-cost products of developing Asian countries like Bangladesh, Indonesia, or Vietnam, or African countries such as Ethiopia, Ghana or Rwanda, which have seen a rapid rise in their GDPs in recent years, will inevitably face a slump in demand leading to their sliding back into the poverty trap they had successfully emerged from, thanks to capitalism’s unhindered march.

It is impossible to reconcile these two contradicting positions unless we do something like what Monbiot suggests, “There is a poverty line below which no one should fall, and a wealth line above which no one should rise. We need wealth taxes, not carbon taxes.†[15] The problem is that so long as we have surplus money, we will only be mega consumers rather than mindful citizens, and we will keep stealing from future generations, just as the colonial empires looted from the past. The evil colonial empire of the British Raj looted from India wealth estimated at $45 trillion at current prices, to “fund industrialisation at home and the colonisation of other nations, whose wealth was then looted in turn†, as Monibot says. “Such theft from the future is the motor of economic growth. Capitalism, which sounds so reasonable when explained by a mainstream economist, is in ecological terms nothing but a pyramid scheme.â€

Capitalism’s sole pursuit is accumulation of unlimited wealth, and it is here we must strike if the planet is to be saved. We must practice what the Belgian philosopher Ingrid Robeyns calls “limitarianism†. Without breaking the cycle of wealth, the spiral of accumulation cannot be broken. Further, looters and thieves of the past must bear a much higher responsibility towards the future, and must bear the cost of sustainable growth in poorer countries that they had earlier looted to develop their countries. There has to be a cycle of accountability.

(III)

In the post-Covid world, our goals have been sustainability and inclusion more than growth, but not certainly without growth. As we have seen above, growth remains and will remain our bottom line for many more years yet. The three goals of sustainability, inclusion and growth are not necessarily always congruent — they may pull in different directions. The fact remains that in our world, poverty is still endemic, more than 600 million people still live in extreme poverty as of 2017, buttressed by another 100 million in 2020 as a legacy of the COVID-19 pandemic, and governments have not been able to create productive jobs for them in adequate numbers. Ensuring a sustainable future for all will require massive investments which can come only from growth. As the International Energy Agency estimated, net-zero emissions by 2030 would require investments of almost $5 trillion each year, and $4.5 trillion per year by 2050. This amounts to half the global corporate profits in 2019. Sustainability may not, in fact, be achievable without growth of GDP in real terms. Growth supports inclusion by creating jobs and income, corrects labour-market inadequacies through tax transfers and redistribution of income and enhances sustainability by encouraging investments in clean technologies, which, in turn, reinforces both inclusion and growth. As the source of energy shifts away from non-renewables towards renewables, greater investments bring down costs and lower cost makes energy more accessible, it leads to more productive lives and more growth, creating a virtuous cycle. [16]

The price of growth is inequality and polluting emissions — both run counter to the goals of inclusion and sustainability. Even the transition to clean energy will impact different countries and different sectors differently. As a recent McKinsey report says quoting the International Energy Agency, the oil economies could see their annual per capita income from oil and gas fall by about 75 percent by 2030s. Lower-income countries with a higher share of emissions-intensive sectors like power, automotive, construction, etc., will be disproportionately exposed and will lack the necessary resources to make higher investments in green tech. The lower-income households will be especially vulnerable — while the economy transitions from fossil fuels, many lower-income workers will need to retrain themselves to qualify for the new jobs created by the greening of the economy. It will need global coordination like what was seen during the pandemic times to effectively tackle all these unwanted consequences and also to meet the associated challenges like financing the huge cost of energy transition and decarbonisation while meeting the basic needs of the most vulnerable sections of populations to build the necessary human capital for future sustainable growth. At the same time, we will need to realign our short-term political goals to these long-term objectives, because today’s leaders need to agree on collective action today “for returns that will accrue only over time†.
What is more challenging is that “for collective action, especially on environmental sustainability, all invested parties must look past their parochial interests and fight for the common good†. Given the short-sightedness of our present and past, this looks too daunting a task at the moment which no stakeholder can solve without the collaboration of all. For this, a framework of incentives that “balances short and long-term horizons and interests across value-chain elements, economic sectors, countries, and regions†must be devised and agreed upon by nations. [17]

Even if we somehow are able to achieve these seemingly impossible goals and coordinate globally, it will be a trajectory based on growth only, however small that might be. It does not solve our conundrum of higher consumption. Expansion of growth encodes modern market economies all over the globe. In January 2010, Andrew Simms and Victoria Johnson published a report entitled “Growth Isn’t Possible†in which they argued for a new model of economic growth by abandoning the notion of growth altogether, reviving the degrowth concepts again. The new economic model has to be the one “that allows the human population as a whole to thrive without having to rely on ultimately impossible endless increases in consumption†. However, with most governments across the world, just as with all major economic fora like G-7, G-20 or BRICS, the word “sustainability†is used more for optics than for real action, because equating social good with no growth won’t be an acceptable proposition — to do so indeed would be a blasphemy. Decoupling still remains an idea a whose time does not seem to have come. At the most, we can think of limited decoupling, like using less energy, preferably renewable energy, or using technology to minimise pollution. These will have limited efficacy - after all, impactful sustainability will rupture the existing socio-economic order. But as the American author Edward Abbey once wrote, “growth for the sake of growth is the ideology of the cancer cell†. It calls for a painful chemotherapy of low growth or no growth. Chemotherapy requires a change in our collective attitude. As James Howard Kunstler puts it: people need to stop thinking of themselves as consumers, because consumers do not have obligations, responsibilities or duties to their fellow humans: “As long as you are using that word ‘consumer’, you will be degrading the quality of the public discussion as we go into the very difficult future that we face.†[18] In that light, some think advertising for consumer products as akin to intellectual pollution.

It was thought that the Fourth Industrial Revolution, brought in through a convergence of digitisation and artificial intelligence, Internet of Things, 3-D Printing, nanotechnology etc. could enable decoupling through exponential efficiency gains. However, even though technology has been a driver of social transformation, it has so far only led to more inequality while remaining strongly coupled with increasing use of energy and materials. Further, as Quinn Slobodian showed in Crack-Up Capitalism (Allen Lane, 2023), faster economic growth tends to curtail democratic freedom. Absolute economic freedom advocated by the likes of Chicago School economist Milton Friedman often comes by limiting the welfare state that is an imperative of democracy — any democratically elected government would be forced to spend on health, education, housing and welfare for the poor, which a hardcore capitalist would consider a constraint upon economic growth. As experiences in territories like Hong Kong, Singapore, Liechtenstein or Dubai shows, capitalism flourished best where the state is almost absent — in zones of exception where there are minimal taxes or none, no regulation or cap on corporate profits, no laws to prevent the exploitation of labour, and investors are perfectly free to do whatever they liked with their profits, being under no obligation to disclose their assets or wealth - in short, where a territory is run like a company in which the only rule is whether the contractual relationship — even with citizens - throws up a profit, and where the entry of people who don’t follow these rules can be barred. These tax havens, duty free zones - the so-called innovation hubs, gated communities and enterprise enclaves currently number over 5,400 around the world, and more than 1,000 have appeared only during in the past decade. “Capitalism works by punching holes in the nation-state,†writes Slobodian, so that the “the lineaments of a future society without a state come into definition.â€

It seems democracy and capitalism no longer go together. We have so far believed that democracy gives people freedom of choice, an essential condition for economic activities to flourish. The question is if this is what neoliberal capitalism’s true face is, would we want to look at it, and accept every undesirable effect that it entails? Should we not think how a possible transition to reduced consumption, reduced production and reduced profit can be made compatible with social security and stability while fulfilling the basic human needs that modern living demands?

Unfortunately, there are not enough widespread debates on these issues, as yet. Perhaps more time is needed to think through these issues, of which there is a critical shortage due to the overwhelming intrusion of TV and social media in our lives which prompted Clay Shirky to coin the term “cognitive surplus†: 200 billion hours of TV are watched in the US each year and 100 million hours are spent just watching adverts every weekend. The scenario won’t not be much different in any other country. If this surplus time — the cognitive surplus — can be utilised for thinking creatively rather than consumptively, there could be a “creative awakening†to transform us from being consumers to becoming producers and sharers of knowledge and creative ideas and arts. [19]

Rethinking economic growth will thus require redefining our concept of growth itself, bringing in a paradigm shift from the quantity of goods consumed to quality of life experienced. This will require a change in our collective thinking about social, institutional and cultural values in society. Quality must be brought into GDP measurement and governments have to replace the current measurement of GDP based on quantity with one based on quality, for which some measures already exist which may be refined through universal consensus. Competitive consumption and the resultant demand for expansion of production must give way to a more sustainable way to ensure human well-being. Even Keynes who believed in the power of capitalism to improve human lives through growth and wanted governments to intervene actively in the economy through counter-cyclical policies prophesied that once the basic economic needs of people were fulfilled, they would naturally gravitate towards non-economic pursuits — a prophecy that shows no sign of fulfillment even after a century. As Raworth writes, “Reversing consumerism’s financial and cultural dominance in public and private life is set to be one of the twenty-first century’s most gripping psychological dramas.†[20]

It is now apparent that this planet cannot afford unlimited growth of consumption by nations, but that need not restrain the growth of human existential values that impart a purpose and meaning to human life. There is no limit to the beauty, love, kindness and empathy one can experience and invoke in others - without these, human lives would lose their meaning, and none of these things can come from consumption. Even companies need a purpose beyond greed and a soil rich in human values to grow. It is not an impossible, Utopian idea. As Pearl Buck had said, “All things are possible until they are proved impossible—and even the impossible may only be so, as of now.â€

(Author: Govind Bhattacharjee is a former bureaucrat, is a Professor at the Arun Jaitley National Institute of Financial Management)