Dialogue: More and more money may not be the answer

By GORDON McLAUCHLAN

Two years ago, I watched on television news the unconfined joy of those emotional people on the floor of the New York Stock Exchange as they celebrated the passing for the first time of the 10,000 mark on the Dow Jones index.

The bells rang and, on the balcony above, a small group of officials grinned beatifically and applauded. It was all a big Wow!, a continuation of the longest run of economic growth in American history.

Nowadays they're tighter around the mouth on the floor of the exchange, waiting to see if this steed known as The Economy is going to stay the course at a gallop, or falter. Yet the Dow Jones was still on 10,346 at the end of this week.

So does it matter if gross domestic product (GDP) and all the other measurements of growth slow for a while so we can consider social matters?

I know this question is very uncool but I'm intrigued by what seems an absolutely unquestioned assumption that economic growth - usually defined in terms of GDP and the stock exchange - is necessarily and always good.

There seems something headlong, something utterly inexorable, about it, as though this is the road to heaven, recession the road to hell and the OECD growth chart the measure of national godliness.

The conventional wisdom is that we need more and more international investment here, high rates of growth and more and more people. Five million people would make Auckland a real city, I heard someone say the other day.

The trouble is that populations increase logarithmically, so that five million today may mean 20 million quite soon. Meanwhile, many of the bigger cities in the world have become increasingly uncongenial and dangerous places to live in.

I can remember when a sojourn in London was something to look forward to and the possibility of living there especially attractive. Not any more.

Some economists and politicians a few years ago tut-tutted as they compared our growth at around 3 per cent with 9 per cent in Malaysia, a comparison that was particularly odious to anyone who had spent time in Malaysia.

If that country grew at 9 per cent for 20 years they wouldn't reach our standard of economic or political lifestyle by any measure I know of.

Take the United States. No matter how wealthy it becomes, the work ethic seems to submerge any aspirations towards pleasure and cultural fulfillment, a smaller proportion of the population controls a larger amount of the wealth, and significant sectors of the population remain shut out of a share in the prosperity.

Take Taiwan, a country that, because of the energy and organisation of the Chinese, has achieved remarkable rates of growth over many years. The trouble is the country is now environmentally a mess, a very unpleasant place in which to live.

Take Japan. It has a high standard of living, huge amounts of capital, and more overseas currency reserves as a creditor than any other nation. But the economy has stopped growing.

Does this make it the first country in the world to mature as a Western version of the capitalist state, the first to reach stasis, a kind of economic nirvana? Can it devise an equilibrium of sustained prosperity, or will it now decline?

The extraordinary thing is its lack of growth is making its neighbours and trading partners even more neurotic than its own population because of the impact on their economies.

Can we continue to grow, uncontrolled, at an accelerating pace as the Earth is plundered to give consumers more and more expansive choices? If you think of the depletion of resources over the past 50 years, what will be the state of the Earth by 2050?

What will happen if China becomes as profligate with its resources as the US? What will happen when places such as Taiwan and Thailand become intolerable environments? What is the point of growth if it's not to make life better and more fulfilling for as many people as possible?

Every year it seems more obvious that most social problems would decrease in a condition of full employment, yet it has proved beyond the ingenuity of even the most developed countries to construct an economy that has a job for everyone, an equitable education system that would fit people for living satisfying inner lives and universal healthcare that would diminish the anxieties of the old and infirm.

I don't pretend to know the answers to these questions but what alarms me is how few people in positions of power are asking them. They see the meaning of life in nothing more than economic growth.

In a world in which tertiary education is becoming increasingly vocational and in which unquestioning people are encouraged to think of themselves as not much more than nuts and bolts in an elaborate commercial machine, it is perhaps to be expected that suicides, drug-taking and thuggery are too often the outcomes.