Question

Is Constant Growth Necessary for a Successful Economy?

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Ed. Note: We are happy to share this reader response, which is part of a series submitted by undergraduate students at Loyola University Chicago from a course called ENVS 363: Sustainable Business Management.

As a business student, I find that many of my classes stress the importance of economic growth. I had always listened to my professors explain how their area of study helps to expand companies and economies, but I have not learned about economic success without continuous growth. In fact, a stagnant economy is precisely what business-minded people are afraid of. I have taken environmental science classes where we briefly discussed the state of equilibrium that some countries are experiencing, but we didn’t discuss how the steady economies were achieved or how they benefited those nations; we mostly focused on the lack of population growth. Until I started taking a class focusing on sustainable business management, the steady-but-successful economy was a very obscure topic to me. It was almost strange to think that some countries could achieve such success without any economic growth: how could an economy possibly flourish without any expansion?

Now, I am not entirely surprised this was a shocking idea to me, since I live in the United States. Americans like me see politicians arguing about strategies for economic growth nearly every time we use our televisions, laptops, smartphones, and tablets. In the United States, continuous economic growth is everything. This is owed to the fact that consumerism drives our economy and our culture. The very idea of the American Dream is to have a big house with a nice car (preferably more than just one!) and all the other material items you could ever dream of. In an effort to keep up with trends, Americans are constantly buying the newest, hottest items. After all, how could we possibly live without the latest iPhone, the most recent Louis Vuitton handbag, or the newest BMW? The United States economy is so reliant on consumer culture that producers of consumer products have conditioned Americans to keep buying things they truly do not need. Chances are that you probably buy new clothes and accessories all the time because fashion trends conveniently change every season and every year, or your clothes are not made to last an entire season. This is not a coincidence: trends change and new products are released all the time to make you feel like you have to be up-to-date and buy all of the newest things, which keeps our economy growing. In fact, there is an entire industry that supports developing and marketing these new trends to producers (especially in retail), far before the public has any clue what those trends might be.

American consumerism is definitely not a worldwide phenomenon. Even though consumerism drives many economies, it is not the source of every country’s income. For example, plenty of countries have a huge focus on tourism and instead focus on creating jobs that help increase and maintain tourism in their countries. In European nations, many universities offer tourism programs that help students land jobs dealing with things like hotel management and travel planning. It’s no coincidence that business schools are such a huge deal in the United States; we need a continuous flow of affluent businesspeople to help consumerism thrive.

Americans are taught to constantly buy things, and producers have learned how to make sure people keep buying things. This cycle creates exorbitant amounts of waste. As we keep purchasing new things, we have to cycle through and eventually dispose of the old products. Much of this waste goes to landfills and into the oceans, contaminating the global environment. Also, all of the companies involved in keeping consumerism alive and well wreak havoc on the environment – and not just in the countries that rely on consumerism. Of course, it is business in general that causes so much environmental distress. Many companies outsource work to poorer countries, where they take advantage of the nations’ resources and citizens to find cheap labor. Allowing businesses and economies to grow without end has awful implications for the environment and for people in exploited nations. But how does this all relate to those countries that experience success, even though they lack a growing economy?

Though American politicians seem to think that economic prosperity is key to a nation’s success, many other factors contribute to a country’s overall success. Things like education, healthcare, gender equality, and social justice all indicate the prosperity of a country. The most common way to measure a country’s success is currently through GDP, or Gross Domestic Product. The United States is the global leader in GDP, which is quite the feat, but how is our country ranked in terms of other indicators of success? When compared to other industrialized nations, the United States was frequently ranked at the bottom.

Many countries surpass us in education [1], and we rank about 11th in healthcare among 10 other wealthy countries [2]. Judging by the current state of things in our country, most can agree that social justice is still lacking. Because there are so many other things that contribute to success besides GDP, the United States is lacking. The World Economic Forum equates success to overall well-being, which consists of education, income, environment, and 7 other factors. According to those dimensions, the top 10 most successful countries were all in Western Europe. Another 10 countries were ranked as making the most progress. Again, the United States was not in either of those categories [3].

If GDP is merely one of many indicators of a country’s economic success, continuous economic growth is not totally necessary. Of course, any nation may still need economic growth or equilibrium in order to achieve just one facet of what makes that nation successful. However, a country like the United States has such a colossal economy that it is ultimately destructive to maintain its GDP growth. Because our country’s success is not dictated by GDP, but by so many other facets of our lives as part of American society, severe deficits in these other areas could lead to our economy’s collapse. Instead of putting heavy emphasis on how much we can produce, we should be focusing on shortcomings: overcoming wage gaps, compiling a fair and effective healthcare system, and finding ways to minimize our impact on the environment. If we can find a way to keep our economy steady but effective, we can devote much more time to other areas our country should be improving in.

[1] Zhao, Emmeline. “U.S. Students Still Lag Behind Foreign Peers, Schools Make Little Progress In Improving Achievement.” The Huffington Post. July 23, 2012. Accessed November 2, 2017. https://www.huffingtonpost.com/2012/07/23/us-students-still-lag-beh_n_1695516.html.

[2] Davis, Karen, Kristof Stremikis, David Squires, and Cathy Schoen. “Mirror, Mirror on the Wall, 2014 Update: How the U.S. Health Care System Compares Internationally.” How the U.S. Health Care System Compares Internationally – The Commonwealth Fund. June 16, 2014. Accessed November 2, 2017. http://www.commonwealthfund.org/publications/fund-reports/2014/jun/mirror-mirror.

[3] “Which countries are best at converting economic growth into well-being?” World Economic Forum. July 28, 2016. Accessed October 23, 2017. https://www.weforum.org/agenda/2016/07/which-countries-are-best-at-converting-economic-growth-into-well-being/.

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