Economic growth

Definition: Economic growth refers to an increase in the size of the economy, i.e. in the production of goods and services, over an extended period of time. In reality, economic growth is tracked by a single indicator, gross domestic product (GDP), which reflects the volume of monetary flows, so it would be more accurate to speak of GDP growth than economic growth (or growth for short).

Economic growth can be seen as a real phenomenon, an economic principle or an ideology.

• As a phenomenon, economic growth has been underway for several decades, with a spectacular and unprecedented rise in global GDP since the end of the Second World War. This sudden increase in GDP is fully integrated into the Great Acceleration, the period marked by a sharp rise in human activity, accompanied by an equally sharp increase in the degradation of the biosphere. However, global GDP growth has not been uniform across the globe, with the so-called “developed” countries having historically seen much greater growth than the so-called “developing” countries, some of which are currently experiencing very strong GDP expansion.

• As an economic principle, economic growth is "the perpetual quest of economic policies" and is seen as "indispensable for coping with many economic and social problems, unemployment being the first".

• As an ideology, economic growth is the belief in increasing production-consumption as the sole and unsurpassable way to ensure the contentment and well-being of the greatest number. It's possible to see this ideology as radical, as the imperative need for GDP growth is hammered home, while its critics (e.g. by proponents of degrowth) are scorned with force and disdain (it's actually surprising to regularly hear the ideology of degrowth spoken of with contempt, but never the ideology of growth; this is probably because the latter is particularly radical today, and a radical ideology is hardly open to criticism, and often not very lucid about its own radicality).

Whether as a phenomenon, an economic principle or a radical ideology, GDP growth is a recent phenomenon: almost the entire history of mankind has taken place in the absence of economic growth, or with very low economic growth.

As economic growth is in fact reduced to GDP growth, it corresponds solely to the increase in monetary flows over time. It is therefore a process that should be distinguished from progress, which implies a movement towards something better. While growth is inseparable from technical progress, which is the basis for productivity gains that enable us to produce ever more per unit of time, it is no guarantee of social progress or non-measurable values such as happiness, joy, cheerfulness, solidarity, love... As early as 1934, Simon Kuznets, the very father of GDP, warned of the limits of a collective project based on increasing this indicator alone: "Those who demand more growth should clarify their thinking: more growth of what and for what?" Despite this warning, the quest for GDP growth has become an obsession, a kind of new Grail quest for the modern age.

In the final analysis, economic growth corresponds to a very materialistic and consumerist vision, blind to many aspects that are absolutely essential to our existence, such as the state of the biosphere, social cohesion and the well-being of individuals (both human and non-human). In connection with this general criticism, we can cite among the major criticisms levelled at growth: 1) failure to take account of the damage inflicted on the biosphere, economic growth being intimately linked to the degradation of the Earth's habitability, 2) failure to take account of the finiteness of natural resources, perpetual economic growth presupposing the consumption of ever more resources, 3) failure to take account of all aspects linked to individual and collective well-being, 4) the inequalities generated by the process within and between countries, economic growth in some countries being in fact based on the exploitation (natural resources, labor, etc.) of others. ) of others.

The definition of economic growth as a phenomenon in pictures: The top graph shows that for most of their history, humans have lived with little or no economic growth: over time, humans in a generation produce and consume roughly the equivalent of their predecessors. It wasn't until the Industrial Revolution, and even more so after the Second World War, that economic growth became an exponential phenomenon: between 1850 and 1950, GDP per capita (a proxy for the level of production-consumption per capita) increased more than 10-fold worldwide. The figure below shows, however, that economic growth was by no means uniform across the globe. For example, GDP per capita in the USA is now 8 times greater than in India, and almost 50 times greater than in Malawi or Mozambique. Chart data source: Our World In Data, https://ourworldindata.org/economic-growth. Source of GDP per capita world map image; Wikipedia, EBKWiki, CC BY-SA 4.0 <https://creativecommons.org/licenses/by-sa/4.0>, via Wikimedia Commons. https://commons.wikimedia.org/wiki/File:A_Map_of_(nominal)_gdp_per_capita_in_2024_by_country-nations.png

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