5.3.2 Economic growth: System traps

In 2022, British Prime Minister Liz Truss stood up at a major conference and declared that her government's core mission was economic ‘growth, growth, growth.’ She promised to cut taxes, remove regulations, and do whatever it took to expand the economy. 

Her speech made headlines around the world. Yet by then, many leading economists, even from mainstream organisations like the United Nations and the World Bank, had already warned that endless gross domestic product (GDP) growth cannot deliver true wellbeing or protect the planet. Despite growing evidence, many political leaders still cling to GDP growth as the main sign of economic success because the structures of finance, business, and politics demand it.

The short video below captures some excerpts from Truss’ speech, also showing a protest against it.

The economist Simon Kuznets, who helped design the way of measuring the size of the economy, warned that ‘the welfare of a nation can scarcely be inferred from a measurement of national income.’ Yet today, nearly all states still focus on growing GDP as a primary economic goal. Why?

Growth dependency is a system trap (Section S.9), a situation where the way a system is built creates ongoing problems that are hard to solve. Economic growth is deeply embedded in the structures of money, business, politics, and society. Governments, businesses, and households all rely on continuous expansion of GDP. Even when we and our leaders recognise the environmental and social damage that growth causes, we struggle to shift direction.

There are two main groups of reasons why the world is stuck chasing economic growth:

• financial drivers that make constant growth seem necessary;

• social and political drivers that make growth the easiest political option.

Many companies also make big investments based on the idea that growth will continue. This can lead to stranded assets, factories, equipment, or buildings that lose value when demand doesn’t grow as expected. For example, if states act to reduce fossil fuel use, oil companies could be left with refineries and pipelines no one needs. These losses show how risky it is to build an economy on the promise of endless economic growth.

Concerns about public and private debt

States and individuals often borrow money today, expecting higher incomes tomorrow. States borrow to fund hospitals, schools, roads, and other services. Individuals borrow for homes, education, or to start or fund businesses.

If economies grow, future tax revenues and higher wages can easily repay the debts. But if growth slows, paying off these debts is harder. This can lead to cuts to state services, rising poverty, and political instability.

Technological threats to employment

New technologies make businesses more efficient, meaning they can produce more goods with fewer workers. While this sounds good, it can mean fewer jobs are available. Without growth, there might not be enough jobs available to employ everyone who loses their job to efficiency improvements.

Growth creates new jobs by creating new products, services, and entire industries. If growth stops, more workers may not have a job and may not be able to meet their needs unless we find new ways to share work and wealth, or guarantee the essentials to everyone.

Consumer culture

Today, wealthy societies are built around consumption. Advertising, social media, and cultural norms all encourage people to buy more new clothes, faster gadgets, bigger cars. Buying goes far beyond need and has become a way to show status and success. This is called aspirational consumption.

This culture of constant consumption creates powerful economic pressures. Businesses depend on people wanting the latest products. States depend on business growth to protect jobs and incomes. If people started choosing simpler lifestyles or buying much less, it would challenge business models and shake the whole economic system. In this way, consumer culture locks societies into a pattern where endless buying feels necessary for economic survival.

To sum up, economic growth has become a system trap. It is wired into how money is created, how businesses operate, how social status is measured, and how political power is exercised. Even when leaders recognise that endless growth is impossible on a finite planet, they face overwhelming pressures to continue.

Escaping this trap will require major changes: new ways of creating money, different expectations for businesses, fairer sharing of wealth, and new narratives about what success means.

Concept: Systems

Skills: Thinking skills (critical thinking)

Time: varies depending on the option

Type: Individual, pairs, or group

Option 1: Education is part of the problem

Time: 20-40 minutes depending on length of discussion and whether students do the extension.

With other students, do a quick brainstorm:

What things do people usually want to grow (for example, followers on social media)? List as many as you can think of.

Individually, reflect and write a short paragraph responding to this prompt:

We are taught that growth means health or success. But in nature, not everything grows forever. And growth is not always good. What examples can you think of where growth becomes a problem, or where stopping or shrinking is necessary for balance?

In small groups, share your answers and discuss:

1. Where does the idea that ‘growth is good’ come from? Where have you heard it?

2. How does this idea shape the way people think about success in life, business, or society?

3. Can you think of examples from nature or society where stability, balance, or even decline is healthy?

4. Return to the idea of economic growth. Why might it be difficult for people, including politicians, to imagine success without economic growth?

Extension:
Create a visual metaphor or slogan that challenges the assumption that growth is always positive, e.g., ‘Grow until you burst?’ or ‘A healthy forest doesn’t grow forever.’ Display and discuss in class.

Option 2: Reflecting on the financial, social and political drivers of growth

Time: 30-40 minutes depending on how long it takes to review the drivers

As a class, review the eight drivers of growth dependency (financial + social/political) listed in the textbook. In pairs or small groups, pick two drivers (e.g., debt-based money and consumer culture). Discuss:

• Why does this driver make it hard to slow or stop economic growth?

• Who benefits most from this system?

• Who is harmed or left vulnerable?

After discussing your two selected drivers, reflect on them more deeply:

• Which of the two drivers you discussed seems most urgent to change — and why?

• Which one do you think would be hardest to change — and why?

Each group presents one insight or quote from their discussion to the class.

Option 3: Futures thinking

Time: 30-40 minutes, depending on how much time is allocated for sharing

Choose one driver of growth dependency (e.g. debt-based money, consumer culture, or geopolitical competition). This is the system trap you will focus on.

Individually, answer the question:

• If I wanted to help solve this problem in the real world, what kinds of skills or knowledge would I need?

Think beyond school subjects. Consider skills like persuasion, data analysis, digital design, campaigning, community organising, legal knowledge, or storytelling.

In small groups, each student shares the driver they chose and the skills they identified. Together, discuss:

• Are any skills common across different traps?

• Are there any unexpected or surprising skills that might be important

Ideas for longer activities and projects are listed in Subtopic 5.5

Coming soon!

• Can the economy grow forever? A short TED-Ed video explaining economic growth and outlining the green growth-degrowth debate. Difficulty level: easy

• Doughnut Economics: Two short videos related to economic growth. Difficulty level: easy

  • Change the goal

  • Be agnostic about growth

• What is economic growth and why is it so important? An article from Our World in Data about the relationship between production of goods and services and human wellbeing, different ways of measuring economic growth and economic inequality. Difficulty level: medium.

• Our obsession with economic growth is deadly - an engaging 25-minute video explaining the problems stemming from endless economic growth. Difficulty level: easy.

• Tipping Points: The true story of the Limits to Growth - a fascinating 3-episode podcast about the original research behind The Limits to Growth report that first sounded the alarm about the potentially existential damage our economies were inflicting on Earth systems. The podcast also tells the story about how economists, businesses and governments undermined and discredited the research. Difficulty level: medium

• Exceeding Earth's Safe Limits with Johan Rockström – In this interview, Professor Johan Rockström discusses the planetary boundaries framework, highlighting how human activities are pushing Earth's systems beyond safe operating limits. Difficulty level: medium.

• The Unbearable Anthropomorphism of Our World in Data - an article critical of the poverty data used often to claim that global poverty has declined dramatically over time. The article points out that rising GDP per capita levels hide the fact that in the drive for economic growth, many people have been forced off lands that sustained them for millennia. Moving to waged labour looks like they escape poverty because they have monetary incomes, but the quality of life for many has worsened because they can’t meet basic needs any longer and traditional ways of life that brought social cohesion have been destroyed. Difficulty level: medium

• Institute for New Economic Thinking Lectures on[ECO]nomics

  • Planetary Boundaries - [ECO]NOMICS Part 3 - In this video lecture, Professor Juliet Schor explains planetary boundaries and why we need to live within them. She counters arguments often put forward by mainstream economics that there is a tradeoff between protecting the environment and our ability to consume goods and services. Difficulty level: medium

• Eradicating poverty beyond growth: Olivier De Schutter - a brief speech by the UN Special Rapporteur on extreme poverty and human rights about the need to move beyond the growth goal to eradicate poverty. Difficulty level: easy

DEAL. 7. Thrive beyond growth, Version 1.0 November 2024. https://docs.google.com/presentation/d/16dH5hAeX7h3ynjd-nzkbywEebdXDdWe57lpoBw7M598/edit#slide=id.p98

Jackson, T. (2017). Prosperity without growth: Foundations for the economy of tomorrow (2nd ed.). Routledge.

Hickel, J. (2020). Less is More. London: William Heinemann.

Kallis, G. (2018). Degrowth. Agenda Publishing.

Meadows, D. H. (2008). Thinking in systems: A primer. White River Junction, VT: Chelsea Green Publishing.

O’Neill, D. W., & Dietz, R. (2013). Enough is enough: Building a sustainable economy in a world of finite resources. Routledge.

Parrique, T. (2019). The political economy of degrowth [Doctoral dissertation, Université Clermont Auvergne & Stockholms universitet]. HAL Open Science. https://theses.hal.science/tel-02499463/document

Pilling, D. (2018). The Growth Delusion. London: Bloomsbury Publishing.

Raworth, K. (2017). Doughnut economics: seven ways to think like a 21st century economist. London: Penguin Random House.

Roberts, R. (2023, January 22). Unpicking growth’s triple lock. Volans. Medium. https://medium.com/volans/unpicking-growths-triple-lock-4ca5f241206e

Coming soon!