Geology Reference
In-Depth Information
depends on increasing amounts of material throughput. Mainstream economics is ob-
sessed with growth of the material kind. The basic idea is that to be healthy, economies
must constantly increase the amounts of raw materials that flow through them in order
to generate ever greater wealth, and that in order to be happy, people must have more
and more of this wealth so as to have access to consumer goods. The raw materials for
these goods must obviously come from nature, which economists perversely think of as
an infinite repository of oil, minerals, timber, fish, and a whole host of other so-called
'resources'. But growth has failed to make us any happier, and is degrading the more-
than-human world on which we utterly depend.
The payment of interest is one of the key drivers behind the growth imperative. As
the economist Richard Douthwaite explains in his classic book
The Growth Illusion
,
businesses need to borrow money to fund their operations, and the main way in which
they pay the interest on their loans is by investing in other businesses that will yield
good returns. If the economy as a whole is growing, then profits will increase across the
board, and so each business will have sufficient profit from its investments to cover its
interest payments. This is a classical positive feedback loop—a genuinely vicious cycle
that inevitably leads to ever more growth and the social and ecological breakdown that
this entails.
The major commodity that currently fuels growth though international trade is
money. Each day, 1.3 trillion US dollars are traded on the international money markets
in what amounts to gambling on a massive scale. The money market creates severe in-
stability globally because huge profits can be made at a touch of a button by moving
money out of one country and into another at the whim of a handful of mega-wealthy
transnational corporations. Once money has been moved out of a country, its economy
is vulnerable to collapse, as was the case recently in various countries around the world.
The motivation for making all this money is of course the need to pay off interest and
make surplus profit.
The mainstream indicator of growth is the notorious GDP—the Gross Domestic
Product, which is a measure of the total value of the financial transactions that have
taken place in a society over a specified period of time. If GDP goes up, then we have
growth and all is well; if it goes down, there is depression and national soul-searching
about what could possibly have gone wrong, as is happening now in Japan. But GDP is a
woefully inadequate measure of what really matters, namely human and ecological well-
being. GDP goes up whenever a financial transaction of any kind takes place, so it is
extremely good at including things we normally consider to be highly undesirable, such
as the cost of treating cancer and the financial implications of car accidents. It also ig-
nores so called 'externalities', like pollution and ecological destruction—the unwanted
side effects of growth. GDP around the world has grown since the end of the Second
