The lead essay by Marian L. Tupy and Gale Pooley represents a fascinating, if narrow, historical story. Augmenting the data used in the Simon-Ehrlich bet is a useful addition to understanding price trends. But those, projected into the longer term, hit inevitable obstacles. That projection is based on improbable assumptions about the human ability to invent itself out of the basic laws of physics. It violates the precautionary principle, and it downplays our embeddedness in ecological systems. Above all, their vision of the future seems unambitious.
The conversation helps illuminate a central debate of our times. Shall we continue to follow past wealth creation and place faith in inventiveness based on markets and monetary valuations? Or shall we take a broader perspective that acknowledges the enormous costs of wealth production and values life beyond the marketplace? As scholars who readily acknowledge that a certain level of output is necessary for the common good, we offer the idea of a Wellbeing Economy as an agenda which speaks directly to a richer view of progress and flourishing.
Beyond the Bet: Are Markets Really the Preeminent Mechanism?
We begin where we agree. Markets represent an effective, and in some circumstances quite possibly the best, mechanism to determine how to get goods and services to people in an efficient and cost-effective way. Tupy and Pooley’s implicit celebration of human ingenuity is on point, as it is one of the most hope-inspiring qualities of humanity. The two—markets and ingenuity—are not unrelated. We also know that Tupy and Pooley share our concern for poverty alleviation, or, more broadly, our hope for a world in which everyone enjoys a high degree of wellbeing and the kind of freedom that offers real choices.
Beyond these agreements, our assessments begin to diverge. For example, the authors assume that a basic mechanism—the market— is unrivalled in negotiating human prospects. This may well be true for basic goods and services, but it demonstrably fails for everything not traded in the marketplace—freedom, creativity, meaning, community, a healthy environment. Reliance on markets also assumes that free markets actually exist, but markets are only as good as the mechanisms (rules, regulations, laws, enforcements and so on) that make them possible. Moreover, markets are constantly under threat from large corporations trying to eliminate market competition in their pursuit of private gain and the socialization of costs.
Even under ideal conditions, markets can never provide the good life itself. At best, they are a means, not an end. As the former Governor of the Bank of England Mark Carney acknowledged: “Commodification, putting a good up for sale, can corrode the value of what is being priced…Putting a price on every human activity erodes certain moral and civic goods.” For some products (such as those which pollute or make us sick or less safe), having more reflects uneconomic growth, as it generates more costs than benefits. Think of costly retreats for lost community and friendship; expensive vacations for lost access to nature; cars for lost safety and possibility to walk or bike; or home security systems for lost neighborhoods where people looked out for each other.
The question that matters is not growth versus no growth, but progress toward the common good versus harm to people and planet. This demands we inquire about what we mean by “growth”—surely, in the words of Nobel Prize winning economist Amartya Sen, trying “to capture a complex reality in one number [like GDP] is just vulgar.”
Beyond the Five Metals and Growth as a Goal
The account Tupy and Pooley offer of the Simon-Erlich bet captures a sliver of history. Taking a broader view, what humanity faces is the reality of biodiversity loss, climate change, species extinction, ocean acidification, alienation, political polarization, and so on. Yes, progress has been made, but on the way a lot of damage has been done. In a world experiencing accelerating existential crises, faith that people will always be able to innovate and produce themselves out of a problem seems, at a minimum, to violate an essential precautionary principle. Why bet on the future of our children? No matter how innovative we may be, humanity needs to face up to basic laws of thermodynamics: exponential growth on a finite planet represents an impossibility. Even energy provided by the sun, often cited as a presumably limitless source of energy, needs substantial earth-generated resources to be of use.
Growth always creates both opportunities and harm. Today, a suite of indicators (for instance, Legatum, GPI, Social Progress) tell us that GDP-rich countries have reached the threshold beyond which further increases in economic output produce more harm than benefits: rising inequality, species extinction, climate change, etc). Let us offer an analogy: a starving patient, barely surviving on 300 calories a day, has her doctor advise a doubling of calorie intake. On 600 calories, the patient becomes stronger and healthier, but not yet well. The doctor repeats his advice, having seen its benefit: to 1200 calories. And again: to 2400 calories and then to 4,800 and beyond. Our patient now not only faces diminishing marginal returns. Continuing a regimen of exponential growth will kill her.
Beyond Superabundance as a Vision: to a Wellbeing Economy
Tupy and Pooley offer a vision where prices and technology interact to ensure an abundant supply of physical resources: a vision they embrace as “superabundance.” Aside from our concerns raised above: does this really align with a world people want to live in? Surveys of public opinion (see here and here), the outputs of deliberative democracy exercises, and even witnessing how humans cooperate, care for each other, and act out of empathy, suggest it is not.
Superabundance is a market-driven world of hyper-commodification and the monetization of everything. It is a vision in which accumulation is the utmost goal—mirrored, we assume, at the macroeconomic level by higher rates of GDP growth per capita.
Our concerns are as follows:
- First, more GDP does not equate to quality of life for enough people; trickle-down simply does not work
- Second, endless pursuit of exponential GDP growth inevitably harms people and planet; it is market failure run amok
- Third, the narrow pursuit of more, by failing to incorporate the higher ambitions of humanity, represents a grim vision of progress.
As we explore in more depth elsewhere (here , here and here), at some point the goal of more in fact translates into less, and fails to capture what we would consider human thriving—the meaning of life beyond accumulating stuff.
Following the simple logic of mainstream economists, which Tupy and Pooley praise Simon for doing, one might be doubtful of our broader vision. But the uncritical support of continued exponential growth, at least among experts, is rapidly becoming a lonely stance. From behavioral to ecological to feminist or indigenous economists, to historians, sociologists, and climate scientists, growing numbers of experts have concluded that exponential growth is neither feasible nor desirable.
Major institutions are beginning to concede that GDP growth does not give a good account of people’s wellbeing. There are many to cite, from the EU to the World Economic Forum to the World Bank to the former head of the UK Civil Service to a report generated by prominent economists. Given space constraints, this from the OECD, gives a flavor:
it is widely understood that GDP is a measure of economic production, rather than of people’s well-being…GDP does not capture important elements of living standards, such as leisure time, health, social connections or the quality of working environment; it does not reflect inequalities, which are important for the assessment of the well-being of any community of people; and it is blind to the effects that changes in the scale of economic production may impose on the stock of resources that sustain well-being over time, including natural resources.
What sort of economic system and goals would put wellbeing to the fore? A Wellbeing Economy positions the economy in service of human flourishing and true freedom; less precariousness and more dignity; fewer dirty industries and more businesses who put their workers and communities front and center. It is a broad, inclusive agenda that understands that economic systems which operate efficiently and effectively will support human needs and do so in a way that recognizes ecological health and biophysical boundaries, as highlighted by the UK Treasury commissioned Dasgupta Review.
To the extent that we agree on goals such as everyone’s rights to eat, to live a life free of poverty and oppression, and our shared concern for humanity writ large, the work and tools Tupy and Pooley bring will no doubt be necessary in pursuit of a Wellbeing Economy, so long as we can meet on the need to recognize the distinction between means and ends. In those efforts, we welcome their thinking about abundance and human ingenuity. But for those who aspire to a thriving life, accessible to all, markets and prices alone will always remain insufficient.