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The End of Economic Growth

A Preservation Institute Publication


This book is no longer in print.

Its content has been incorporated (in slightly altered form) in a newer book, The Politics of Simple Living, .


"Charles Siegel has managed to make this book both readable and pro-active. His assessment of the counterproductivity of our economy and consumer society is persuasive, lucid, fact-filled, and especially timely in an era when we must decide how much is enough for ourselves - and for a sustainable planet."

- Jane Holtz Kay, author Asphalt Nation


Excerpts from The End of Economic Growth

From Chapter 1: The Limits of Human Needs

Per capita Gross World Product (GWP) grew by more than 2 percent annually between 1950 and 2000. Projecting this growth rate, we find that:

  • Before the middle of the twenty-first century, per capita GWP will be higher than America's per capita Gross Domestic Product (GDP) was in the 1960s.
  • Before the end of the century, per capita GWP will be higher than America's per capita GDP is today.

If economic growth continues, the world could become affluent during the twenty-first century, as the United States and Western Europe became affluent during the twentieth century. But ecological constraints threaten to stop growth. Global warming has already begun and could cause substantial damage by the end of the century. The age of cheap oil seems to be ending, and there are predictions that petroleum production will peak and begin to decline soon, causing prices to soar.

We often hear that we are reaching the limits of growth because of ecological constraints, but we rarely hear that we are also reaching the limits of human needs. Many Americans have become disillusioned with economic growth during the last few decades, not only because of the environmental problems it causes but also because the rising standard of living seems to bring diminishing satisfaction.

We need to ask when growth should end because people have enough. Policies to deal with ecological problems can be successful only if we also develop economic policies that recognize the limits of human needs.

From Chapter 2: Health Care at the Limit

During the last fifty years, American spending on health care has soared. But life expectancy is increasing much more slowly than it did in the early twentieth century. Spending more on health care no longer brings much benefit, but affluence has become a major threat to health, as Americans eat more fast food, become less active physically, and face an epidemic of obesity. It is widely agreed that the most important things Americans can do to improve our health is to give up cigarette smoking, to eat better diets, and to exercise - not to spend more on health care.

America spends more than twice as much per capita on health care as the average for other industrialized nations, but has lower life expectancy than the other industrial nations (Figure 2). We clearly have reached a point where spending more on health care is not as important as other factors.

When we compare all the nations that are members of the World Health Organization (WHO), it is clear that higher health care spending stops increasing life expectancy significantly when spending is over $1,600 per capita, far less than one third of the United States' $5,711 per capita (Figure 3).

Though it no longer brings health benefits, economic growth now causes threats to health that are very real. Today's most common diseases - such as heart disease, cancer, obesity, hypertension, and diabetes - are the by-products of economic "progress."

Though life expectancy is still increasing, studies have shown that American children are less healthy overall than they were three decades ago, and middle-aged Americans are less healthy than they were a decade ago.

From Chapter 3: Education at the Limit

Education is another key example of the failure of growth. Spending on education has soared, but during the 1960s and 1970s, student achievement declined dramatically at the same time as spending increased dramatically. Achievement is still at much lower levels than in the early 1960s, when spending per pupil (after correcting for inflation) was less than half of what it is today.

Since the Coleman Report, published in 1966, the studies have overwhelmingly shown that spending more on education does not improve academic achievement. The quality of schooling has much less effect on achievement than the quality of family and community life.

Academic achievement declined, because spending more on schooling brought negligible benefits, while economic growth brought real costs to the quality of family and community life.

The United States spends far more per student than the average of the other industrial nations, but our reading scores are worse than average (Figure 7).

We can do a broader international comparison using the scores on the Trends in International Mathematics and Science Study, the most extensive international effort to test for academic achievement. Based on the data available (Figure 8), it seems that increased spending might stop improving achievement at one-third of the US level, and it seems that increased spending clearly does stop improving achievement at under two-thirds of the US level.

From Chapter 4: Neighborhoods at the Limit

The history of the American city is another key example of counterproductivity. At first, growth made our neighborhoods more livable, as we moved from walking cities to streetcar suburbs. But during most of the twentieth century, growth made our neighborhoods less livable, as we moved from streetcar suburbs to freeway-oriented sprawl.

Streetcar suburbs felt spacious and quiet, but their most important form of transportation was still walking - though they were one-tenth the density of the traditional walking city. Streetcars were used for commuting to work and for occasional trips to other parts of town, but everyone lived within walking distance of Main Street or of a neighborhood shopping street.

After World War II, when the federal government actively promoted suburbanization to stimulate economic growth, the typical middle-class neighborhood was a freeway-oriented suburb with homes on quarter-acre lots: to buy groceries, you had to drive on high speed arterial streets, with nerve-racking traffic. During recent decades, we have continued to consume more land and to travel longer distances every year (Figures 10 and 11).

Post-war suburbia, with housing on one-quarter acre lots, is less livable than streetcar suburbs, with housing on one-tenth acre lots. All the extra land that we consume does not give us more livable neighborhoods.

All the extra money that we spend on transportation - on our freeways and our two or more family cars - does not make it quicker for us to get around. Research has shown that the amount of time that Americans spend commuting to work remained constant from the 1840s, when suburbanization began, through 1990, despite the vast changes in technology during that time. The total amount of time that Americans budget to transportation also tends to remain constant, about 1.1 hours per day. As speeds have increased, suburbs have sprawled and malls have gotten bigger, and people have driven further to get to their jobs or go shopping.

After remaining constant for 150 years, the average American's commute time began to increase in the 1990s. The average commute is now 25 minutes, up 18 percent from its historic norm. Almost 10 million Americans drive more than an hour to work, 50 percent more than in 1990, and over 3.4 million Americans drive more than an hour and a half to work, twice as many as in 1990. These "extreme commuters" with a round trip of over three hours a day are the fastest growing group of commuters.

From Chapter 5: Compulsory Growth or Choice

Much of what we spend on health care, education, suburban housing, and transportation is wasted. But if we eliminated this sort of waste, what would happen to the unemployment rate?

The automobile and suburbia were the mainstays of the post-war American economy. At that time, city planners knew the freeways and suburbs were wasteful, but they considered this a good thing. One of the most authoritative urban planners of the time said we were right to rebuild our cities around the automobile, because "A certain kind of planned waste is healthful for an economy of abundance ... as long as it follows and supports the general tide of growth and progress...."

For many decades, Americans have believed that we need growth, whether or not we are producing anything useful, purely to create more jobs. There is absolute consensus that we need to create jobs: all the politicians promise the voters that they will provide more jobs than their opponents.

Is growth really needed to combat unemployment, as everyone seems to think? Or can we choose our standard of living?

 

 
The Natural Environment: The Social Environment