The Growth Delusion, wealth, poverty and the wellbeing of nations

Economic Growth. We hear about it almost daily in the news – the pressure to keep propelling forwards, attaining constant growth and the dire consequences if we do not. But how many of us can confidently say we understand precisely what our economy is or how we measure it’s progress?

In his latest book David Pilling, Africa editor of the Financial Times takes a look at Gross Domestic Product(GDP) which has become our principal means of measuring our economies and societies. As part of his global book tour, David asked Yoke to help him visualise the key points in his book, and bring them to life to aid his presentations.

“I just wanted to pass on that the slides are a HUGE hit. Everyone who sees them loves them and I think they achieve precisely what we were looking for: to bring the subject alive.”

David Pilling

In 2014 Britain started to include female prostitution and illegal drugs in its official national accounts for the first time. The move gave a £10bn boost and added up to 5 % to the UK’s gross domestic product.

GDP measures production of whatever kind, good or bad. “GDP likes pollution, particularly if you have to spend money clearing it up… It likes to measure the buildup to conflict in guns, planes, and warheads, then it likes to count all the effort in reconstructing shattered cities from the smouldering ruins.”

Is GDP fit for purpose or does it give us a distorted view of the system we are trying to measure? In the book David explores such topics, understanding how GDP came to be and how it has been wielded by the powers that be for political gain.

In David’s own words…

There are many competing explanations for what has caused popular rage in countries that have, judged by conventional measures, never been richer. There is, though, a common thread. People do not see the reality of their lives reflected in the official picture, the picture painted principally by economists. Some of the forces at play in this backlash stem from issues of identity, a sense of helplessness, lack of affordable housing, an absence of community, and anger against money politics and rising levels of inequality. Some stem from the fact that our definitions of “growth” and “the economy” no longer fit people’s lived experience. This book aims to explain the gulf between what experts say about our lives and what our lives actually feel like.

“One obvious problem with putting too much faith in growth is that its fruits are never evenly shared… The top 0.01 percent of Americans, just 16,000 families, has seen its share of national wealth quintuple since 1980.”

Banks can be thought of in two categories: cloakrooms and casinos. ‘Cloakroom’ banks are essentially utilities, places to house your money, the economy’s plumbing or pipework. The other, vampire squid / ‘casino’ function of a bank is to allocate capital. That means allocating risk, manufacturing derivatives, buying and selling companies.

Robert Costanza, a famous ecological economist, estimated that nature is worth $33 trillion.

“Some fifty years ago one US economist contrasted what he called the ‘cowboy’ economy, bent on production, exploitation of resources, and pollution, with the ‘spaceman’ economy, in which quality and complexity replaced ‘throughput’ as the measure of success.”

“Earth Overshoot Day marks the date on which humans have used up all of the ecosystem’s regenerative capacity for that year. From that day onward in 2017 we were running down the earth’s ecological gas tank to fuel our consumption.”

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Although books about GDP may not be at the top of your reading list, the book is highly readable and David has managed to explain dry and sometimes complex issues with wit and intrigue. We thoroughly recommend the book which you can purchase here from Hive.

And in case you haven’t used Hive before,please do try them out. Every time you purchase a book or e-book through their store a portion gets donated to a local book shop of your choice, how fantastic. And it’s easy to get e-books purchased from Hive onto your Kindle using 3rd party apps like Epubor Ultimate.

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