Best mea­sure of growth is us

It’s vi­tal to stop look­ing to the econ­omy for jobs and cre­ate them our­selves

Weekend Argus (Saturday Edition) - - FRONT PAGE - SHEERA BEGA

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.”

PIC­TURE: REUTERS

Ro­bot cou­ple Xiaolan and Xiao­tao carry trays of food at a restaurant in Jin­hua, Zhe­jiang prov­ince, China, last month. The restaurant has two robots de­liv­er­ing food for cus­tomers.

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