Growth used to mean prosperity, yes, even luck. Today, the system is forcing us to consume more and more. Otherwise it would collapse.
Increasingly, steady economic growth has shifted from a desirable goal to a constraint that we are subject to. The promise that growth would also be accompanied by a better future life has dissolved. Nevertheless, capitalist economies force us to grow, whether we like it or not.
Growth has originally created material wealth in many countries that earlier generations could only dream of. Thus, per capita inflation-adjusted gross domestic product in countries such as Germany, Switzerland, and the United States increased approximately tenfold between 1870 and 1995.
In fact, the beginning of industrialization was a most unpleasant time for a large part of the population. The result was an army of low-paid industrial workers who had to work and live in miserable conditions. But over time, workers also participated in economic growth. They were not, as Marx mistakenly believed, increasingly exploited, but their wages began to rise and, as increasingly wealthy consumers, became an essential pillar of economic growth.
For a long time, economic growth has therefore made a positive contribution to the well-being of many people. Compared to the past, we can afford a luxurious lifestyle, on average we live much longer and healthier. But in recent times, Western Europe, North America and Japan are increasingly questioning whether growth is contributing to people’s well-being. As many studies show, further economic growth does not make people happier or happier.
Flourish only on pump
This would be reason enough to question economic growth. For growth makes economic sense only as long as it makes a positive contribution to the subjective well-being. Added to this are the effects of growth on the environment, which have led to a critique of growth from an ecological perspective since the early 1970s.
But can economies without growth work today in the longer term? An analysis of the economic cash cycle shows that this will not be possible for long. In the long term, the entire corporate sector can only make profits if it receives more money from outside, generating additional demand and thus additional income. This inflow takes place in modern economies through lending by commercial banks, which creates additional money. In order for the additional money created to become real profits, the newly created money must at least partially be used to finance investments in real capital (such as machinery, equipment). This increases the productive capacity of the economy and leads to an increase in the production of goods and services.
On the other hand, if no more money flows into the economy, the increase in demand and production comes to an end. Profits are then quickly losses, and the economy is in a downward spiral. For a long time, the described compulsion to grow was not perceived as such, as long as the promise of salvation for a better future was combined with growth. But from this promise of salvation is in recent times increasingly a compulsive act. For more and more people in rich countries, more material wealth is no longer a credible promise of an even better future life.
Therefore, growth today is hardly justified by this argument. Instead, we hear that a country like Germany, with little or no growth as an economic location, becomes unattractive, loses its innovative strength or loses jobs. We have to grow to remain economically successful, even if we do not want even more material wealth: That’s exactly the growth compulsion!
So we are prisoners of a system that forces us to grow permanently. Non-insatiated needs drive this growth, but the effort of companies to create always new growth potential. Technologically, this is not a problem. Technical progress enables a constant increase in the production of ever more diverse goods and services. Digitization is likely to increase labor productivity even more. The bottleneck lies with consumers who have become drivers of growth by drivers.