Uneconomic Growth : in Theory , in Fact , in History , and in Relation to Globalization Lecture by Herman

Growth is uneconomic when it increases environmental and social costs by more than it increases production benefits. Within the neoclassical paradigm uneconomic growth appears anomalous, although it is theoretically possible. Nevertheless, it is empirically likely that some northern countries have already entered a phase of uneconomic growth. Why does the dominant neoclassical paradigm make uneconomic growth seem anomalous, if not impossible? Why, by contrast, does uneconomic growth appear as an obvious possibility in the alternative paradigm of ecological economics? Although the neoclassical paradigm permits growth forever, it does not mandate it. Historically the mandate came because growth was the answer given to the major problems raised by Malthus (overpopulation), Marx (unjust distribution), and Keynes (unemployment). But when growth becomes uneconomic we must find new answers to these problems. However, national policies required to deal with these three problems are undercut by “globalization”—the current ideological commitment to global economic integration via free trade and free capital mobility. The consequent erasure of national boundaries for economic purposes simultaneously erases the ability of nations independently to enforce policies for solving their own problems of overpopulation, unjust distribution, and unemployment. Many relatively tractable national problems are converted into one intractable global problem, in the name of “free trade,” and in the interests of transnational capital. I. Uneconomic Growth in Theory Growth in GNP is so favored by economists that they call it “economic” growth, thus ruling out by terminological baptism the very possibility of “uneconomic” growth in GNP. But can growth in GNP in fact be uneconomic? Before answering this macroeconomic question let us consider the analogous question in microeconomics—can growth in a microeconomic activity (firm production or household consumption) be uneconomic? Of course it can. Indeed, all of microeconomics is simply a variation on