Weekend Argus (Saturday Edition)
Best measure of growth is us
It’s vital to stop looking to the economy for jobs and create them ourselves
RIDING on the Gautrain this week, Lorenzo Fioramonti was struck by the massive billboards at every stop, selling economic growth.
One from MTN proclaimed that “courage equals growth” while another, from an investment bank, promised: ‘Ready. Set. Grow.’
For Fioramonti, a professor of political economy at the University of Pretoria, it was evidence of South Africa’s unrelenting “obsession” with economic growth.
It was something of an epiphany. “I realised that everything around us, from all the public debates, the media and advertising, is that we’re immersed in a growth fetish at all levels.”
But, this is as useless as obsessing about sex, believes Fioramonti, who runs the Centre for the Study of Governance Innovation and is an extraordinary professor at the Centre for Complex Systems in Transition at Stellenbosch University.
“The more you obsess about sex, the less good you get at it. South Africa is like a teenager who hasn’t had sex and is thinking and fantasising about it all the time.
“But when it comes to action, it’s unable to do it because the secret of a good thing is to think about something else.”
For Fioramonti, that something else is outlined in his new book, The Well-Being Economy, Success in a World Without Growth.
It’s a paradigm shift he has long advocated. Fioramonti has done critical, wide-ranging work on why GDP should not be the ultimate measure of development.
“Growth is a poor indicator of a better society. In many countries, growth happens when people get sick or die.
“Think of the recent fires in Knysna. It’s a good thing for growth because those houses will need to be rebuilt, and people died, who have to be buried. Every time an insurance pays out a funeral plan, that’s a bonus for growth.”
It’s perverse, he says. “We go to a movie, the economy grows. We have a car accident... More and more what we see is that the negative processes have become actually more significant than positive ones in contemporary society.”
Even the International Monetary Fund has agreed the global economy is entering a “secular stagnation”, which may very well be the dominant character of the 21st century, he points out.
“South Africa, which has been the poster child for growth, is in a recession,” he said.
“There’s a systemic shift happening around the world that will probably mean low growth or no growth for your lifetime. We can either cry and flagellate ourselves or be innovative.”
SA, he believes, sits at the crossroads of a historic transition. “It can take a leap and prosper or condemn itself to an escalation of inequality and destruction because of the blind pursuit of ever-morefading growth.”
This is particularly relevant in the “age of robots” that brings the real prospect of massive automation replacing humans in production chains, writes Fioramonti, in an article for the World Economic Forum.
Research by Oxford University predicts robots are likely to displace half of jobs in the US and Europe in the next 20 years.
“Anecdotal evidence is showing us that China is shedding 60 000 jobs every two months, with most jobs that are replaced by machines lost for ever,” he says.
“This will happen in South Africa. The growth economy is all about ‘big is beautiful’ and if your economy is all about producing, then robots can do that better than you and me,” he says.
“The big question is do we want an economy based on mass production where robots will destroy everything, and at some point the system will destroy itself ?
“In the system of robots producing everything at an exponential level, it will be consumers on crack. But you and I will not have any money to buy the things robots produce...
“But if our economy is grounded in the local context, with networks of small businesses, and is not about mass production but customisation, about recycling, reusing, adapting and upgrading, life could actually be better with low or no growth.
“If that’s the case we’ll never replace people with robots,” he says.
This may not generate economic growth, but it will create jobs.
“We will train people to be our future carpenters and plumbers, rather than producing more and more McDonalds jobs, which is what the growth economy is producing..”
“Politicians and public administrators, despite their sheer ignorance about the dark sides of growth, believe they know better than the thousands of innovators, social entrepreneurs, scientists and activists who are already building the well-being economy.”
Fioramonti writes :“A small minority consumes more than 75% of all planetary resources. Water is running out. Food is trashed rather than made available to hungry mouths. In some countries, the air is so dirty that people have to wear masks when outdoors.
“In Hong Kong beaches are so filthy they look like dumping grounds. We throw away enough stuff to fill a line of trucks... the distance between Cape Town and Nairobi, every single day. “
This is the world we have built “in our blind pursuit of something called ‘economic growth’. We have sacrificed important aspects of life to gain another notch in GDP.”