David Barmes – Corona Crisis: Now’s the Time to Stop Worshipping the False God of GDP

We must resist GDP-based arguments which attempt to justify a less stringent public health response to Covid-19. As we emerge from this crisis, returning to a senseless pursuit of endless growth would do more harm than good.

David Barmes is carrying out Positive Money’s latest research on Escaping Growth Dependency.

Cross-posted from Positive Money UK

A recent study on Covid-19’s economic impact in the UK estimates a 15% hit to GDP. Given our economy’s overwhelming dependence on growth this kind of hit can easily translate to huge rises in unemployment, inequality and private debt defaults. But a reduction in economic activity doesn’t have to be painful, and it certainly shouldn’t be mobilised to argue against the public health measures currently in place. The hit to GDP need not cost more lives than the virus itself. Rather, it is endless GDP growth – not contraction – that poses the greater underestimated threat to human life at this point in time. 

Although our current economic system is in many ways dependent on growth, prioritising ‘the economy’ and GDP growth over social goals like public health undoubtedly causes far more damage than good. It incentivizes exploitation of labour and nature, to be incorporated into the production process at the lowest possible cost and sold on the market for endless consumption. Negative social, psychological, and environmental repercussions of this process – if acknowledged at all – are treated by many economists as mere ‘externalities’, dealt with via simple price adjustments.

These repercussions cannot be simply wished away as they are fundamental to the growth process itself. They are the very reason why growth has failed to alleviate global poverty or raise life satisfaction, and why it remains tightly coupled with destructive environmental impacts. If left to continue unabated, our mindless pursuit of economic growth will result in levels of climate and ecological breakdown that threaten the viability of life on earth.

Nonetheless, in the US, a vocal minority including Donald Trump have suggested that the public health response to Covid-19 should be eased in the interest of rebooting economic growth. This discourse is now sadly also emerging in the UK. Citing the work of Professor Thomas from the University of Bristol, articles in The Times and The Critic have claimed that the coronavirus mitigation response could – due to lowered GDP – kill more lives than it saves. This is a dangerous and flawed argument, for all the reasons outlined above, and because the relationship between GDP and life expectancy so far (nevermind in the future) is far more complex than Thomas assumes.

In fact, history shows that recessions often result in decreases in mortality, while periods of rapid growth are accompanied by  immediate negative health impacts. It was rather the invention of sanitation and later the provision of universal healthcare and education brought about by social movements, that accounted for much of Europe’s increase in life expectancy in the late 19th century – not GDP growth. And today, countries like Costa Rica and Cuba, prove these services can be provided without having a high GDP per capita.

During the current health crisis, the government can choose to protect the public from coronavirus while also protecting the financially vulnerable from the virus’ economic impacts. Then, once we emerge on the other side, it must restructure our economy to overcome our toxic growth dependency, and secure a socially and environmentally prosperous future without growth, for us all.

It’s time we rewire our economy to promote human wellbeing, not the false god of GDP.

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