By Matt Burke.
Much of our work within the E4A project draws from an important insight that we should not conflate human well-being with increasing economic activity. In a recent blog post, research economist Warwick Smith challenges us to question both the possibility and desirability of unending economic growth on a finite planet. We will need to build a new economy based on a clear understanding that beyond some point, economic growth can no longer be sustained biophysically nor offer meaningful gains in our quality of life. The folks at Happy Planet Index have developed an alternative measure of economic efficiency that draws from this understanding. If we want to retain GDP as an economic measure, we could take Josh Farley’s suggestion that GDP could serve as a very useful indicator of economic costs. The macroeconomic policy goal then would be to increase our well-being with as low a GDP as possible. Given a stagnating global economy, we likely need to change our expectations of the prospect of perpetual economic growth anyhow. Fortunately, as Warwick and others have pointed out, the inevitable may also be the more desirable, if we can shift our priorities.