De-emphasizing growth

A recent article in the New York Times references a new economic study published by world renowned economists Joseph Stiglitz and Amartya Sen that calls for nations to stop focusing so much on ideas of growth and GDP and instead take a more holistic approach to analyzing the health of nations.

While this is not new, it is a good reminder of the inadequacies (some would call them incorrect period) of our current economic indicators and the need to revise them, because, as Stiglitz and Sen point out, "what you measure affects what you do."

The importance of this notion reverberates throughout our economic, social, and political systems. I want to concentrate briefly however, on how this will impact our environment. Many practitioners of business methodologies like the triple bottom line and continuous improvement have long recognized the necessity to have better, more frequent, and more granular data about their organizations and their processes. If you know how much energy is being wasted in a particular step of the process, you have a much better chance of convincing people that an up-front investment needs to be made to solve it. Likewise, if all we care about is "growth" then business decisions like pillaging our natural resources for short term gain actually end up making sense.

A quick example of how something this small can play out in our daily lives. My parents drink a lot of tea and hot water, and recently their always-on hot-drinking-water heater broke. In the market for a new one, we were faced with tons of choices that ranged in cost from 50 dollars to 200 dollars. They would all get the job done (not a very technically advanced job at that... boil water) so there was little way at first glance to differentiate them. We like the notion of quality though and disliked having to go through the trouble of replacing one every 6 months, so we immediately ruled out many of the cheaply built, disposable 50 dollar models (unfortunately, environmental waste - while being a concern - was still a secondary one.)

Then we were left with what seemed like fairly identical models from one Japanese company known for its quality. The cheaper model was 120 dollars, the more expensive one was 170. The only notable difference was some sort of vaguely more energy efficient feature on the 170 dollar version. Even I was hard pressed to justify 50 dollars more for what seemed to be questionable benefits, and some added risk of investing more up-front for something that could break within 2 years.

However, I wanted to put my money where my mouth was and buy what was advertised as a more environmentally friendly model. Determined to figure out the cost difference, I did a little more digging and finally figured out that the more expensive version used only 17W of electricity on average per hour versus something like 44W for the cheaper version. Some quick calculations with our energy prices showed that the energy efficient model would likely take between 18 months to two years to recoup the original investment (ROI in business terms). With an extended warranty covered by my credit card, we would also be covered for our additional investment should the thing break before two years. It was a win win win win win situation for me.

Obviously a minor example, but one that I think shows the truth in what Stiglitz and Sen are advocating. The more information we have, the better decisions and actions we can take, and the more likely our actions are going to benefit multiple arenas rather than just one. (In this case, our pocketbook in the short term.)

Further, getting back to growth, the single-minded desire for growth can be seen as one of the root causes for much of our current societal and economic woes - perhaps not the only one, but a fairly significant one. In order to continue to grow, companies mortgage their futures for today, people mortgage their family time for an immediate promotion, companies mortgage their long-term strategies for spectacular quarterly figures. In the past fifteen years, if you weren't in "growth markets" you pretty much weren't even playing in the stock market. Yet all of this emphasis on growth has led us down dangerous paths where not just our communities and nations are being hurt, but our environment and global systems as well.

Why exactly then, do we have this singular emphasis on growth? Do we really have to constantly grow? Is it not okay for a company with a good, stable, profitable business to just continue providing the service or product that customers obviously want and need with no pressure to "grow" their business?

With little imagination, it is easy to see how different our societies could be without the emphasis on growth. More stable, more communal, more sustainable. I think we have to rediscover the notion that growth is not the only way to measure progress - indeed, it may not be a measure of progress at all. There are times where progress is simply standing still. Perhaps in order to move forward as a society, we have to stop trying so hard to move at all, and instead be content to sit and let nature and our society run its own course in its own due time.