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[00:00:00] The Why Curve with Phil Dobbie and Roger Herring
[00:00:04] Growing the economy has been the key demand of business and government for decades.
[00:00:08] It's the way we measure how we stand in the world.
[00:00:12] If we're not growing, if we're in recession, it's a disaster we're told.
[00:00:16] But there are voices now saying ever-expanding economies damage the environment and could lead us to disaster.
[00:00:23] Growth is not necessarily good.
[00:00:25] So what's the truth? And can there be expansion without destruction?
[00:00:30] The Why Curve
[00:00:32] I mean, I feel like we have to have growth, don't we? But the question is, can we slow it down?
[00:00:39] Well, again, but you know, slowing it down, I mean, on our current measures suggests we will get less wealthy.
[00:00:45] Maybe that's a good thing. But then where does the wealth go? Because that's the problem.
[00:00:50] If we grow an economy and actually it's only a handful of billionaires who really benefit, what's the point?
[00:00:54] That is the problem, isn't it? And it's what do we need as well, I guess, is the question as well.
[00:00:58] So are we at the stage now where in the pursuit of growth, you know, we are being advertised stuff that we just don't need, but we buy anyway?
[00:01:07] Yeah, well, that's the thing. You know, you need a new car. Some people need new electric cars.
[00:01:11] Well, I don't need a new electric car because I've just got one.
[00:01:15] But I mean, yeah, but in examples of yes, that is, you know, people who say I must have the latest and greatest thing.
[00:01:23] And then that's a measure of pride almost really.
[00:01:26] And internationally, we're always measuring our manhood almost if one could use that term by saying, oh, we got X percent growth, whereas someone else has got whatever else it is.
[00:01:36] And many people question the whole GDP thing anyway. Is it even a useful measure of growth? There's a lot of doubt about it.
[00:01:43] And are we happier because of it? Well, am I happier with my new electric car? Bloody hell, I am.
[00:01:49] Yes, I was going to say you're a good example.
[00:01:51] I mean, but I know we've mentioned this a few times. If you go back to the beginning of the pandemic,
[00:01:56] and I'm always a little bit concerned about using this because I know a lot of people suffered through the pandemic.
[00:02:00] People know people who died through the pandemic. No doubt it was a horrific time.
[00:02:04] But for many people, there were no cars on the road. Life was actually quite simple for six months, wasn't it?
[00:02:10] We had we had nothing and we were quite satisfied.
[00:02:12] We had lots of things. What we didn't have was an ability to get more at that point.
[00:02:16] We still had our TVs, which we sat and watched endlessly streaming whatever it was.
[00:02:20] So it wasn't like we went back to the Stone Age. But I think there is a good point there.
[00:02:24] Many people say the other thing is we are damaging. It's obvious. Our planet.
[00:02:28] Climate change and climate change is directly related to growth.
[00:02:32] And there are people and who might be talking to one in just a moment who believe that we can actually use more and more resources.
[00:02:40] This idea because, you know, this and in fact, most people in the Indian,
[00:02:44] obviously in the energy industry are gearing up for growth in energy that we are going to replace all fossil fuels with renewable energy.
[00:02:53] And then we're going to have more renewable energy on top of that to cope with our greater energy usage usage.
[00:02:59] How much greater can all this get? That's the question.
[00:03:01] Yeah. And where does it all stop? There's a man who's been thinking about this and indeed writing about it.
[00:03:05] In fact, his new book is called Growth, a Reckoning just come out.
[00:03:08] And he's Daniel Susskind, professor of economics at King's College London.
[00:03:12] And he joins us now. So, Daniel, I mean, even though we think we need growth,
[00:03:17] I mean, we haven't been very good at it lately, have we?
[00:03:20] If we look at GDP, if we look at GDP per capita, which I think is the real measure, isn't it?
[00:03:24] Because it gets artificially inflated by having lots of people moving into the country.
[00:03:27] A lot of concern about GDP in the first place.
[00:03:29] Yeah, that's right. But if we say that's the measure that we have been using
[00:03:34] and we want to see that grow, well, I mean, we're still lower than we were before the pandemic.
[00:03:38] So if that's what we're aiming for, we're not very good at it.
[00:03:41] That's right. I mean, there are very few things that all politicians agree about at the moment.
[00:03:47] But one of them is that we need more growth.
[00:03:52] You know, poverty and worklessness are rising.
[00:03:57] Public services backlogged and broken.
[00:04:00] Average real wages haven't moved for about 15 years.
[00:04:07] You know, almost all, as I said, politicians now agree that we need more growth.
[00:04:13] The challenge exactly, as you say, is how to do it.
[00:04:17] Yeah. Well, let's challenge the very basis of that, because you say everyone agrees we need more growth.
[00:04:22] But there are people who are challenging it, as you well know.
[00:04:25] David Attenborough, for example, publicly, also, of course, Gareth Tutunberg, numerous environmentists saying,
[00:04:32] actually, growth doesn't do good for the planet, which in itself is an existential issue
[00:04:38] and therefore potentially an anti-growth thing in itself.
[00:04:41] But also that it actually doesn't benefit the right people,
[00:04:45] that growth simply accentuates the divisions and the inequalities.
[00:04:49] And that's pretty undeniable, isn't it?
[00:04:51] Yeah. So I think that's exactly right.
[00:04:52] And it really gets to the heart of my new book, which is that, you know, on the one hand,
[00:04:59] growth is associated with almost every measure of human flourishing,
[00:05:04] whether it's reducing poverty, improving educational outcomes, improving health outcomes.
[00:05:10] And so there's a sense in which exactly, as I said, you know, we desperately want more growth.
[00:05:14] But exactly at the same time, growth is also associated with many of the greatest challenges that we face,
[00:05:20] not just climate change, which is the challenge that particularly animates the environmental movement,
[00:05:25] but also, as you say, widening inequalities in society, the creation of new technologies like AI,
[00:05:32] whose disruptive impacts on work and politics.
[00:05:35] It's not clear we can properly control the disruptions to local places and communities,
[00:05:41] particularly the pursuit of growth through globalization.
[00:05:45] And so there's this dilemma, what I call the growth dilemma that sits at the heart of a lot of policy today.
[00:05:51] On the one hand, we're pulled kind of violently towards pursuing more growth.
[00:05:55] But on the other hand, we desperately, it seems, want less growth as well.
[00:06:01] Is it because we're looking at what's happened in the past and we're assuming what's happened in the past will continue?
[00:06:07] Because growth has undoubtedly got us where we are today.
[00:06:11] And, you know, in more recent times, you look at how China has lifted millions of people out of poverty through growth.
[00:06:19] But I'm even there now that that is all slowing down.
[00:06:22] And certainly, you know, in the West, we're not seeing growth having the profound effect that it once had.
[00:06:28] And yet we still seem to think, well, if we could just do what we, you know,
[00:06:31] what it used to do, you know, that everyone will be better off and, you know,
[00:06:35] it doesn't matter about the discrepancy in income because it will all get, yes, I'm going to use those words, filter down.
[00:06:42] Trickle down. Trickle down. Sorry.
[00:06:44] It's, you know, everyone benefits. Yeah. But it doesn't work like that anymore.
[00:06:49] We've gone past that point, haven't we? Yeah.
[00:06:51] I mean, there is a sense and this is sort of what motivated the book, a sense that the sort of price of growth
[00:06:58] is now for the first time threatening to overwhelm that promise.
[00:07:04] It's worth just I thought what you said before about Greta Thunberg, Caroline Lucas, David Attenborough,
[00:07:12] I think is very important because there is this idea of degrowth that the way to solve these problems isn't simply to slow down the economy
[00:07:19] or even necessarily to press pause, but to actually go into reverse to kind of actively seek negative GDP growth.
[00:07:27] It's an idea that began a few decades ago in the sort of corners of academia, but it's spread pretty far and wide now.
[00:07:38] And you see lots of people supporting the degrowth movement.
[00:07:43] It's an increasingly popular idea.
[00:07:46] And I think they get one thing right, which is really important, which is this idea that something has to give,
[00:07:52] that we cannot keep on going in the way that we are.
[00:07:58] That said, I think there are lots of difficulties with the degrowth movement.
[00:08:04] And perhaps the most important one is if we were to actually do what they are asking us to do, namely shrink GDP.
[00:08:13] I mean, I really think it would be one of the greatest acts of collective self harm that humankind can inflict upon itself.
[00:08:21] I mean, just what about the biggest one since Brexit?
[00:08:24] Perhaps that's not there.
[00:08:25] But in terms of harm, though, because that's an interesting word you use, Daniel, because I suppose I'm putting my my ecological hat on perhaps say,
[00:08:34] what is it actually that we're trying to grow?
[00:08:36] I mean, growth is a general thing. What do you say GDP?
[00:08:38] But are we trying to grow? I don't know. Personal benefit, you know, collective happiness, something like that.
[00:08:46] I think it was a bouton that actually has a measure of national happiness as an indicator.
[00:08:51] But if we measure things simply in terms of, I don't know, the dollar value, is that in itself a distortion?
[00:08:58] Yeah, because because a lot of it disappears, of course, in terms of inflation, price of things goes up.
[00:09:04] So, yeah, I think if you ask a lot of people say, oh, the economy is growing, but do you feel any better off?
[00:09:09] Most people would say no. And, you know, could you get by with less?
[00:09:12] Most people go, well, yes, long as I'm happy.
[00:09:15] So what sense does it make? What should we be growing?
[00:09:17] Yeah. And this is one of the one of the big questions, which is does GDP,
[00:09:27] the total value of goods and services that are traded in a market really capture what matters?
[00:09:34] And there are lots of technical problems with GDP.
[00:09:39] For instance, that it's not particularly good measure of things that are free.
[00:09:44] You know, many of the things that we really rely upon in life, search engines, email, whatever it might be, don't have a price.
[00:09:51] And so it's quite hard to capture their value in a GDP figure.
[00:09:54] Similarly, you know, the GDP measure isn't particularly good at capturing quality.
[00:09:57] If you think about your iPhone today and compare it to an iPhone 10 years ago, perhaps a similar price point.
[00:10:03] But the quality is just, you know, significantly different.
[00:10:07] So there's a whole bunch of technical issues with the GDP measure.
[00:10:10] But then, and I think this is what you're hinting at.
[00:10:13] There's also a whole bundle of sort of moral limits to the GDP measure as well.
[00:10:18] That there are many things that are social that we value in society that aren't necessarily valued in the market from, say,
[00:10:27] the natural environment to, say, care work in the home, which is perhaps not done for free to support friends and family members.
[00:10:38] One of the big arguments of the book, though, is that to see this issue around growth as an issue of measurement and in particular an issue of mis-measurement,
[00:10:49] I think is to make a big mistake.
[00:10:54] There is a sort of movement and it's emerged over the last few decades that sort of believes there's a kind of more perfect measurement out there.
[00:11:02] If we can just find out the right things to measure and measure them in the right way and bundle them all together and get some single number, well, we can chase after that number instead of instead of GDP.
[00:11:13] And I think that is a fool's errand. I think there are I think there are lots of really serious problems with that.
[00:11:20] So what I'm trying to argue in the book is that we need to move away from thinking this thinking of this issue of growth and the tension between the promise and price of growth as a sort of a technical problem, a problem of mis-measurement.
[00:11:32] Something that can be handled by economists and technocrats.
[00:11:35] And instead to think of a lot more of these as problems of being moral problems, political problems, ones that we need to turn to citizens to deliberate and debate and discuss and resolve.
[00:11:48] So social measures as well as I mean, you might keep GDP.
[00:11:52] But if you imagine you, you know, the prime minister every month like companies have, you know, just like a cheat sheet of these are our key indicators.
[00:12:02] And, you know, it'd be easy to understand what you put in there apart from growth, you know, GDP.
[00:12:07] You'd want to look at the levels of poverty, the level of unemployment.
[00:12:11] In your book.
[00:12:12] Disposable income rather than, you know, rather than total income education levels.
[00:12:16] They are all the things that really matter to people.
[00:12:18] But what matters within that?
[00:12:20] I mean, I think in your book, then you talk about almost like citizen juries to decide these things within a country.
[00:12:24] Is that right?
[00:12:25] Well, so one thing I argue for is what I call GDP minimalism, which is that we need to put GDP in its place.
[00:12:32] We need to sort of try and demote it in this hierarchy of things that we care about.
[00:12:37] You know what? Just to sort of step back.
[00:12:39] I mean, one of the really interesting things about growth and one of the really interesting, I think surprising things about GDP is that although it sits very much at the center of our common lives today.
[00:12:49] It's chasing after growth and pursuing ever greater GDP.
[00:12:56] It's an incredibly new preoccupation.
[00:12:58] So before the 1950s, very few politicians, policymakers, even economists were interested in the idea of economic growth.
[00:13:09] It just wasn't something that was spoken about.
[00:13:12] And, you know, even if people decided that they wanted to pursue economic growth, we didn't actually have a reliable measure of the size of the economy full stop until the early 1940s.
[00:13:24] So it's a really new invention.
[00:13:27] It's a modern invention, something that came about in the second half of the 20th century.
[00:13:31] And I think it's important to keep that in mind.
[00:13:34] Is that really because it was a function of international competition?
[00:13:37] You know, we know now that we say, well, how much is China growing by?
[00:13:40] How much is Germany growing?
[00:13:42] Or was it because businesses had to grow because they had to satisfy their investors?
[00:13:47] Is it the finance sector which is driving this?
[00:13:50] In the beginning, the short answer is it was war.
[00:13:53] First, it was the demands of World War II.
[00:13:56] A basic question when you're waging total war is how much of the economy can you slice up and dedicate to the war effort?
[00:14:04] And how much do you need to keep back for civilian needs?
[00:14:08] And British policymakers in the 1940s were really struggling because there was no such measure available.
[00:14:14] And in fact, it was John Maynard Keynes, the great British economist who led the work in the UK on the measure that would eventually 50 years later become known as GDP.
[00:14:28] So in the beginning, it was the sort of the kind of demands of war that led to the creation of the early GDP measure.
[00:14:36] But that doesn't quite explain where growth came from, because GDP is just a snapshot of how big the economy is.
[00:14:41] Growth is relentlessly pursuing an increase in that measure over time.
[00:14:47] And what really put growth on the political map was when war changed from hot to cold and the conflict started between the US and Russia.
[00:14:58] And because it was a Cold War, there were no traditional battlefields.
[00:15:02] There were no traditional metrics of casualties, territory, all of the things that you might normally use to see who is winning and who is losing.
[00:15:10] A hot war. And one of the things that became a kind of proxy for who was winning was which economy was growing faster.
[00:15:20] You know, after all, the Cold War was a battle of ideas as well, a battle between two very different conceptions of organizing economic life, you know, market on the one hand and the other.
[00:15:32] The Soviet Union wouldn't really have recognized GDP anyway, would they? I mean, there was a difference in time.
[00:15:37] That's right. So they had a, and this is one of the things, they had their own unique measure of the output of the economy.
[00:15:47] But even still, the CIA during the conflict were, you know, the numbers that they had seemed to suggest, at least in the beginning, that the US was on the back foot, that the Soviet Union was winning this economic race.
[00:16:00] And so that again gave a new sense of urgency and priorities, the pursuit of economic growth.
[00:16:06] But what then happens is as the Cold War fades away, it turns out, and this is why we think of growth now as being such an important thing.
[00:16:17] It turns out the growth is associated with almost every measure of human flourishing, as I was saying before.
[00:16:24] In the beginning, politicians start to pursue growth to tackle worklessness and poverty.
[00:16:29] But then, you know, the sort of the bounty that growth provides in terms of increased tax revenues and increased ability to borrow and so on give the opportunity for, you know, 20th century policymakers to pursue more ambitious social agendas as well.
[00:16:44] So growth sort of, although it's originally driven by these sort of demands of war and conflict, kind of almost by accident finds itself in kind of poll policymaking position because it turns out to be really useful for all these other things that the society start to care about as the 20th century comes to an end.
[00:17:05] Yeah, well that is the argument that's used, isn't it? By both sides of politics, that if you want more hospital beds, the economy has got to grow faster.
[00:17:12] So we get more tax revenue so that we can pay for those hospital beds.
[00:17:16] So we're sort of like wedded to this idea of growth because everything emanates from it.
[00:17:22] But there's another side as well, isn't there?
[00:17:24] That if you how do you get no growth but maintain the incentive?
[00:17:28] If I am investing in a business, I want to get a return.
[00:17:31] If I'm going to see a return, that business has got to show growth.
[00:17:35] How do you get around that problem?
[00:17:37] I think the I mean it's an interesting question.
[00:17:41] You know when I wrote the book, Growth, a Reckoning, I was writing it from the point of view of politicians and policymakers.
[00:17:52] Thinking about the national economy, thinking about GDP, thinking about growing economic activity in the country.
[00:18:01] But what's been really interesting already in the conversations I've had is the book has sort of taken on a life of its own is how many kind of analogous lessons there are for businesses as well.
[00:18:13] In thinking not necessarily about the pursuit of GDP but the sort of relentless pursuit of profit.
[00:18:19] And in the book I'm interested in the trade-offs between growth and other sort of national policy priorities like protecting the environment, reducing inequality, supporting local places and communities and so on.
[00:18:33] But you can see very similar trade-offs and tensions emerging within businesses and professional organizations between the pursuit of profit and the other things that businesses ought to be concerned with.
[00:18:46] Because there's been this push in the boardroom attitudes to change.
[00:18:50] Even the fiduciary duty element to perhaps change to the point where you are no longer your primary duty, illegal duty, is to produce gains for your shareholders.
[00:19:02] That there may be other things that should be part of what you consider.
[00:19:05] Yeah, and there's a sort of I mean there's a parable I've been thinking about.
[00:19:08] One way to think about the story I'm telling of what happened to economic policymaking in the 20th century is sort of analogous to what happened to Boeing in the last couple of years.
[00:19:22] The kind of Boeing-fication of national economies.
[00:19:26] Just as we've sort of relentlessly pursued economic growth at the expense of other things that we might reasonably care about.
[00:19:33] So to Boeing is a good example of a company that has relentlessly pursued profit to the neglect of other things that they ought to be caring about.
[00:19:41] To the neglect of screwing things in properly.
[00:19:44] Yes, when a side panel falls off the economy.
[00:19:47] Quite, quite, you know, safety.
[00:19:49] So I think there's lots of interesting parallels there in thinking about both the growth of nations and the growth of organizations and businesses.
[00:19:58] Right, but I mean the answer there would be simply regulation.
[00:20:01] You just go, well, okay, you need more regulation.
[00:20:04] We can't stop growth.
[00:20:05] We've got to have growth because that's the way the economy works.
[00:20:08] And if it falls apart and it's not working properly, we just need more regulation.
[00:20:12] I'm just putting myself in.
[00:20:13] Regulation is the enemy of growth as many conservatives would say.
[00:20:15] Well, yeah, but that's the argument that's used, isn't it?
[00:20:18] But I mean how do you get, whether it's the government making the decision or whether it's business, how do you get zero growth?
[00:20:26] I'm still trying to understand.
[00:20:27] I don't think we should pursue zero growth.
[00:20:30] And this is the starting point for the book, which as I said before, you know, if we were to actively pursue degrowth, it would be degrowth even of a modest kind where we just decide not to grow at all rather than actually actively try and shrink.
[00:20:43] It would just be such a tragedy.
[00:20:45] Yeah, just to give you a kind of practical example, if suppose degrowth means freezing global GDP per head at its current level, that would imply either condemning 800 million people to extreme poverty.
[00:21:01] That's the number of people who are currently in extreme poverty around the world.
[00:21:04] Or it would mean slashing the incomes of the 7.1 billion people that remain often in the developed world and redistributing their income around the world.
[00:21:16] And the argument I make in the book is, and I think it's a really important one, is that the story of growth in the 20th century is a story of a revolution, but it's an unfinished revolution.
[00:21:28] You know, there is so much more that we have to achieve, not simply our most basic ambitions for society from providing everyone with a good education, good health care system, basic level of material comfort and so on.
[00:21:41] But even the more grand ambitions that we ought to have, and it just seems to me so unimaginative of the degrowth movement to think that our current economic lot is the sort of best that we could ever do.
[00:21:55] Well you say unfinished.
[00:21:57] Unfinished.
[00:21:58] But isn't unfinished the problem that we just think we are going expanding like the universe, you know, you have the Big Bang and then it continues to expand forever.
[00:22:07] And I mean one of the arguments about the people you're talking about now is that actually there isn't that there's a limit because we have one planet, we have one set of things that we can't just keep expanding forever, but you're implying we can.
[00:22:20] Yeah, but also in addition to that I just wonder whether we're clutching at straws a little bit as well.
[00:22:25] So in the you know 50 years ago or you know 80 years ago growth was giving us obvious things like it was giving us cars, it was giving us washing machines that we needed to set up the welfare state and we were getting freedom from all of that.
[00:22:40] Now we're sort of like getting well AI I guess I guess it's important but it uses up a lot of careful careful.
[00:22:48] Daniel is an AI person.
[00:22:51] Okay, well I'll feed you the line.
[00:22:55] But I mean you know my point though there might be things that we're spending money on which we're just spending money on for the sake of the sake of growth because almost we've almost done everything.
[00:23:04] Let me take those points in turn. I mean the first point I think is really very important.
[00:23:09] And if it's one if it's the one thing I want people to take away from the book is this which is that you're exactly right that the degrowth movement has a slogan which is very attractive.
[00:23:20] And the second point is that infinite growth is not possible on a finite planet.
[00:23:26] And it's become the kind of rallying cry and you hear it, you hear lots of people make that claim, and that claim is just fundamentally wrong.
[00:23:37] We can have effectively infinite growth on a finite planet.
[00:23:42] And the reason why it's wrong is because it's based on a misunderstanding, a misconception about how growth actually works about the economics of growth.
[00:23:55] It is based on a view of the economy that what matters is the material world, the things that we can see and touch.
[00:24:06] And you can understand where this disposition comes from because when the founding fathers of economics were writing about economics, people like Mill, Smith, Marx, Ricardo,
[00:24:18] the stuff that mattered for economists was the stuff in the material world.
[00:24:24] There were only so many acres of land that could be farmed on a, only so many acres of land that could be farmed, only so many factories that could build and so on.
[00:24:33] There weren't many people giving yoga classes.
[00:24:36] And so, obviously, if growth simply comes from using more and more finite resources, then there are limits.
[00:24:44] Then it's absolutely right that there is only so much we can do with our, there's only so many finite resources to be used.
[00:24:51] But the key point is that growth does not come from using ever more finite resources.
[00:24:57] The point that it comes from is coming up with new ideas for using those finite resources in ever more productive ways.
[00:25:08] And the key point is that whereas the universe, whereas the sort of world of finite materials might be limited, the world of possible ideas,
[00:25:16] the universe of possible ideas for combining those resources is infinite effectively.
[00:25:21] Let me just give one example, just because I want to really hammer this point home for listeners, because I think it's so important.
[00:25:27] Imagine you've got a larder, a kitchen larder with 300 ingredients in it. So it's a well stocked larder.
[00:25:33] That is a finite set of resources. But the number of possible recipes, the number of possible ways you can combine those resources,
[00:25:43] there are more possible recipes than there are atoms in the universe, even if you've only got 300 ingredients.
[00:25:49] And growth comes from discovering those ideas about how we combine our finite resources, not simply from using up those finite resources.
[00:25:58] And I think this is really important for understanding why it is that the sorts of constraints on growth
[00:26:07] that many people are appealing to in making arguments that we ought to slow down are misguided.
[00:26:17] So you're saying we need to find ways and we will find ways of making use of our resources better, more effective.
[00:26:24] And that's where we're going to get more productive.
[00:26:26] Yeah, I mean another word for what I'm describing is technological progress.
[00:26:29] Discovering ideas for making more productive use of our resources is technological progress.
[00:26:34] I thought you were going to talk about the growth in the services sector, which is why I made the point.
[00:26:40] That's another thing.
[00:26:41] But that is another area of...
[00:26:43] It does sound like perhaps irrational optimism in a way, Daniel, because you're saying yes, it's like people talk about the energy push.
[00:26:51] Oh, it'll be fine. We'll find a way to produce almost infinite energy.
[00:26:55] Well, it's good to hope that. But I mean there was a line in your book where you were talking about predictions of progress
[00:26:59] and saying they're actually not that reliable. You can't know what's coming around the corner.
[00:27:03] Yeah. And in the meantime, I mean, so artificial intelligence is using up masses of server capacity.
[00:27:09] And maybe it'll find ways that you can come up with those infinite number of recipes from the 500 things in your LADA or whatever use you want to make to it.
[00:27:18] But it's using more and more energy in the process.
[00:27:22] So what we're actually saying is, well, we believe that we can replace all the fossil fuel energy that we're using now plus more to cope with the growth that we're going to have.
[00:27:32] And some of those are going to be quite energy intensive resources that we're using.
[00:27:38] So I think that's so, you know, the starting point of the book is that I think degrowth is a non-starter.
[00:27:44] What they get right is that something has to give. What they get wrong is that we cannot grow far more.
[00:27:52] And so the first stage in the book is, OK, so if we want to pursue more growth, how do we go about doing it?
[00:28:00] Recognizing that growth comes from this process of discovering new ideas about the world and the technological progress that it creates.
[00:28:07] But what you're saying is exactly right.
[00:28:09] And this is another big argument of the book, which is that if we were to simply plow on and pursue more growth alone,
[00:28:16] we would be in a way committing exactly the same mistake as the degrowthers will be in the opposite direction.
[00:28:24] You know, paying too much attention to the benefits of growth and ignoring the costs, whereas the degrowthers just focus on the costs and ignore the benefits.
[00:28:33] And the beneficiaries of that growth, by the way, will be the technologists.
[00:28:36] There'll be an ever dwindling number of people on the planet who are actually benefiting from that growth.
[00:28:41] So that is, I think, a really important dimension of the price of growth.
[00:28:48] I think you're right, which is that we collectively become more prosperous, but at the same time that prosperity is divided out in increasingly unequal ways.
[00:28:57] But let me just let me just say so. The first part is how do we get more growth?
[00:29:00] But then I think the second part, which is really important, is how do we change the nature of that growth?
[00:29:06] How do we change our direction of economic travel in such a way that we can have we can develop technologies that promote growth, but don't also harm the other things that we care about?
[00:29:16] And I think I actually think the best example of this in practice in recent years is, in fact, the environmental story.
[00:29:22] You know, if you go back to 2007 and read the Stern Review, which was the first kind of report of its kind into the economics of climate change written by Sir Nicholas Stern,
[00:29:33] one of the core conclusions of that report was that to reduce emissions by 80 percent would cost one percent of GDP a year.
[00:29:43] In other words, we'd have to pay a price in terms of growth to meet our emissions target.
[00:29:50] Lord Stern came out the next year and published a piece in The Guardian saying, no, no, I got it wrong.
[00:29:55] Climate change is even worse than that. It's going to cost us two percent of GDP per year.
[00:30:02] But what's fascinating is that if you look at the sort of expert analysis that's been done in recent years, the suggestion is that to reduce emissions completely.
[00:30:10] So not simply to reduce them by 80 percent, but to eliminate emissions would cost just half a percent of GDP.
[00:30:17] In other words, we have to pay a far smaller price than was imagined 20 years ago or 15 years ago to meet the challenge of climate change.
[00:30:27] Now, why did that happen? Because our technology is better.
[00:30:30] It's not simply that it's better. It's that it's different.
[00:30:35] It's that 15 years of we were talking about regulation before, it's true, rules and regulation, changes in taxes and subsidies and changes in social norms as well have created a really strong incentive in society
[00:30:49] that simply didn't exist before to develop technologies that not only promote growth, but do so in a way that don't produce emissions.
[00:30:58] And I think solar energy is the best example of this really.
[00:31:02] It's a technology that back in the 1970s was meant to be a sort of technology of last resort, isolated lighthouses, outer space and so on.
[00:31:11] But today it's completely commonplace and it's commonplace because of the extraordinary innovation that has happened in the sector and the price of generating a watt of electricity via solar has just plummeted almost 200 fold over those decades.
[00:31:30] But the deeper point here is that by changing the incentives that entrepreneurs, the business leaders, that individuals face in society, we can change the nature of technological progress that takes place and also change the nature of growth that takes place as well.
[00:31:46] And so that's what you're saying.
[00:31:47] Growth can be put in a way that is you're adjusting your object, you're adjusting the technology, you're adjusting our expectations, but it's still growth.
[00:31:57] That's right. So the aspiration is that we can grow but not damage these other things that we care about and these other things that we value.
[00:32:06] But I still wonder whether that investment is going to happen and the reward is going to go to a small select group of people.
[00:32:14] And if it doesn't go to that small select group of people, then the rate of progress is going to be so much slower.
[00:32:21] Let's put it, give me, give you an example.
[00:32:23] So say you have lithium that you can use for making batteries and that could be used to enable people in the UK, for example, to drive twice as far very cheaply or the same lithium could be used to provide batteries to offer electricity to communities in Africa so that they could develop industries and then they could become more involved in the global economy.
[00:32:48] So what's going to happen?
[00:32:50] It's going to go to the UK, isn't it?
[00:32:52] Because we've got the money to pay for it.
[00:32:54] And so is that the best allocation of resources?
[00:32:56] It's the operation of markets that dictate that.
[00:32:58] Yeah, but it is.
[00:32:59] But it's the allocation of resources that is not the best outcome for the planet as a whole, is it?
[00:33:08] I'm looking at something deep there, which is the incentives that people play, that people face in a free market might lead to sort of efficient outcomes.
[00:33:21] But they don't necessarily lead to fair outcomes.
[00:33:25] And one way to think about the book is...
[00:33:27] Efficiently wrong.
[00:33:28] One way to efficiently unfair.
[00:33:30] And one way to think about what I'm arguing for is that we have this extraordinary powerful tool at our disposal, the market.
[00:33:40] And we ought to be confident in stepping in to change the incentives that people face so that we pursue things not only efficiently, but we also pursue the ends that we kind of collectively think are the things that we ought to be doing as a society.
[00:34:00] So do we even agree collectively about that?
[00:34:02] Well, yeah, because do you think this will just happen automatically or is it government policy?
[00:34:07] How does it get there?
[00:34:09] I don't think it does happen automatically.
[00:34:11] So I think that the first stage is that we ought to pursue more growth.
[00:34:14] The second stage is that we ought to, through taxes and subsidies, through rules and regulations, through social norms, try and change the nature of that growth.
[00:34:23] And in the book, I systematically go through each of the different dimensions of the price of growth and explain how we might actually do that.
[00:34:30] But in the end, we might have to accept that there are hard tradeoffs between growth and other things that we care about.
[00:34:38] And the argument that I make is that these are not the sorts of just to come back to what we were talking about before.
[00:34:45] These are not issues of measurement and mismeasurement.
[00:34:48] And we can't solve these things by creating an ever more perfect GDP measure by bundling in the environment or trying to capture different measures of equality in the GDP measure.
[00:35:00] It's not to say these things aren't important, but the idea that we can capture them in some number that we could then pursue is a mistake.
[00:35:08] These are moral questions, not technical ones, about the sorts of things that we ought to value in society.
[00:35:15] More prosperity or greater equality, a better environment.
[00:35:20] And what I set out in the book is the sort of political innovation that we need in order to support the sort of collective deliberation that I want to see among citizens about how we ought to be resolving these tradeoffs.
[00:35:36] So do you worry though that sort of like if you go back to like the Club of Rome, which was what the mid 1970s thing it was, wasn't it?
[00:35:43] I remember reading that as a kid and it was, you know, and being terrified that we were going to run out of food.
[00:35:48] And then yes, but then, you know, we found a way, we found new ways of getting more productivity out of the land and we've coped and the population has grown a huge amount since.
[00:35:58] So I think that's often pointed as hey, look at the Club of Rome.
[00:36:01] We coped with that through technological innovation and that's all fine, isn't it?
[00:36:05] We can keep on applying that to everything until we can't anymore.
[00:36:10] So do you worry about the fact that we're going to reach that point where we just can't, we just keep on saying sure we can, but then something changes the climate.
[00:36:17] Well, we know the climate is changing, for example.
[00:36:20] And, you know, in that case, you know, we might have less arable food.
[00:36:24] We might be the ability to, I don't know, produce energy, reduces in some way that something gets in the way and all of our aspirations for greater growth just are downfall.
[00:36:37] Yeah, I can recognise that as being a challenge, but it just seems to me we are some way away from that end point.
[00:36:49] Indeed, we've barely even tried the sorts of interventions that I write about in the book.
[00:36:57] You know, a serious carbon price, serious interventions to reduce inequality.
[00:37:02] There's a whole variety of things that we haven't even tried yet.
[00:37:06] So before grinding to a halt, I think it's a better idea to make serious efforts to try and change the incentives that exist in society so that we can continue to flourish from a kind of materialistic,
[00:37:18] kind of material prosperity point of view, but also do so in a way that doesn't damage these other things that we care about.
[00:37:25] It's very complex, isn't it? For those people who've been thinking I'm going to listen to this podcast for half an hour, therefore I won't need to read the book.
[00:37:32] I feel like we've only just scratched the surface, so you're going to have to go and buy it.
[00:37:36] Daniel, thank you so much.
[00:37:37] Not at all, such a pleasure, I really enjoyed that.
[00:37:39] Terrific. Two of Dolly's are really of all the things involved in that and fascinating it is.
[00:37:44] Thank you for being with us.
[00:37:45] Yeah, thank you so much for having me.
[00:37:46] But one thing that is growing quite a lot is arm sales, of course, at the moment because war is in the air.
[00:37:52] In fact, war is literally in the air or has been in the Middle East.
[00:37:55] Yeah, I mean, that's I mean, we might be in that situation, might we, where we get out of a downturn in the economy with an increase in armaments.
[00:38:04] Yes.
[00:38:05] It's been there before.
[00:38:06] But we also know how it affects oil sales, of course, when everything happens in there.
[00:38:10] But anyway, has been a crazy time recently.
[00:38:12] Well, since October the 7th, really, in that part of the world and in a conflict that seems to be threatening to expand way beyond even that.
[00:38:21] All these stories about is Netanyahu going to take out nuclear facilities in Iran?
[00:38:28] Who knows what will happen?
[00:38:29] But the point, I suppose, is that is that it needs looking and he's immensely complicated.
[00:38:34] So we're going to try and find someone who can at least get a sense of who and what and why in that difficult region.
[00:38:40] We do sort of keep on bouncing back to this part of the world, don't we?
[00:38:42] But we feel like we keep on going.
[00:38:44] Well, we can't leave it hanging for another couple of weeks because it is just where so much of the world's attention is right now.
[00:38:51] So we will be looking at that next week on the Y curve.
[00:38:54] Join us for that.
[00:38:55] Thanks for being with us today and we'll see you next week.
[00:38:57] Bye.
[00:38:58] The Y curve.