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Should socialists be part of the ‘anti-growth coalition’?

This article is over 1 years, 6 months old
Liz Truss is blaming opponents of economic growth for economic decline. Yuri Prasad asks if socialists should be for more growth
Issue 2827
Liz Truss speaks at an investment summit

Liz Truss speaks at the UK-Africa Investment Summit in London, 2020. (Picture: DFID – UK Department for International Development)

Liz Truss’ pursuit of a bigger economy means lowering taxes on the rich, building on the countryside and slashing public spending. Anyone that stands in the way of the Tories’ plans, they deride as part of an “anti-growth coalition”.

Truss says her policies will benefit everyone by “growing the pie”. Not only will we all be better off, but happier and more fulfilled too.

In conventional economic terms, the usual measure of a country’s economic success is its Gross Domestic Product (GDP)—the measure of the size and health of a country’s economy. If GDP is rising, the country is doing well. And if GDP per person is rising, we are all supposed to be becoming more prosperous.

But there are big problems with calculating wealth and wellbeing this way. First, adding together the value of all goods and services rightly means including all the important things we need to live—such as food, education and healthcare. 

But it also sums up the parts of the economy that are useless to us. So GDP figures include spending wasted on the military, advertising and luxury houses, yachts and cars for the rich.

Second, it takes no account of the way some goods and services produced are actually damaging. So building pipelines to flush raw sewage out to sea counts towards growth figures, as does chopping down trees to make way for retail parks.

GDP calculations are not interested in how wealth is distributed across society. So it is perfectly possible to have rising growth figures while life for working class people is getting harder and worse.

The United Nations’ Human Development Index measures a country’s health, education and overall standard of living to produce a ranking.

The US took first place when the index was first produced in 1990, but has since slipped to 21st place. That’s despite the economy growing in all but four of the 31 years calculated.

During that period, the wealth of the rich has increased enormously, but the proportion of GDP going towards wages has fallen dramatically. For those reasons socialists should not accept blithely the idea of growth as a good thing in the way that RMT union general secretary Mick Lynch did last week.

He replied to Truss’s attack on “militant” unions holding back growth, saying, “Everyone believes in economic growth, otherwise the economy doesn’t move forward.” Lynch knows well that for the rich “moving forward” means smashing everything that gets in the way of making more profits, including people that resist the process.

Being against the capitalist concept of growth does not mean that we want no more industrialisation or agricultural innovation. Some 2 billion people don’t have access to safe drinking water, the majority in the Global South

As many as 828 million people globally were affected by hunger last year. To reject any further development is to leave most of the world permanently locked into poverty.

We can only solve problems of this magnitude by using all our productive potential—and crucially, subordinating capital to decisions made democratically in the interests of both people and planet. And attempts to undo the damage that capitalism has done to the environment will need more science and more technology, not less.

All of that would entail a very different kind of growth to the type being obsessed over by markets and mainstream economists and politicians. It would mean cutting out whole areas of the economy that are useless or damaging to humanity, while enlarging those that cater for those in need.


This is the second in a series of columns about economics

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