Beyond the Growth Fetish

Is money really making us miserable?

Daniel Ben-Ami

Topics Politics

A new book by Clive Hamilton, the head of the Australian think-tank The Australia Institute, argues against what he sees as a contemporary obsession with economic growth.

In Growth Fetish, Hamilton admits that, in the past times of scarcity, growth was beneficial – but he argues that in today’s era of superabundance development no longer leads to subjective wellbeing. To support his argument, he quotes opinion polls showing that people in prosperous societies are often unhappy with their lives, and points to the rise of psychological disorders in the developed world. His view is that today’s constant striving for growth simply reinforces misery: ‘Economic growth does not create happiness: unhappiness sustains economic growth.’

Hamilton’s thesis is essentially based on the fact that over the past 30 years people have become less happy, while at the same time the economy has grown. While it probably is true that more people are diagnosed with psychological disorders now than in the past, this hardly means that economic growth is to blame. There is no straight line between higher GDP and the amount of Ritalin prescribed to schoolchildren.

A more likely cause of unhappiness is the miserabilist character of contemporary debate – a miserabilism that Hamilton is part of. His downbeat view that economic growth is unsustainable and the cause of misery has become something of a consensus today. There is a widespread pessimism towards progress, and a tendency to worry about the downsides of development.

Hamilton casts himself as a heretic, showing up the ‘growth fetish’ of mainstream society. The cover describes the book as ‘the first serious attempt at a politics of change for rich countries dominated by the sickness of affluence’. Where books often carry a dedication it instead quotes George Bernard Shaw’s aphorism that ‘All great truths begin as blasphemies’. Hamilton approvingly cites EJ Mishan, an economist at the London School of Economics who published a book attacking economic growth back in 1967, but goes on to say that: ‘While doubters such as Mishan could find a publisher in the 1960s, the economic and political changes of the 1970s put an end to that.’

Hamilton seems to believe that neo-liberals, free marketers who believe in economic growth at all costs, have taken over the world. Although he recognises the existence of the Third Way he sees it as accepting the key assumptions of neo-liberalism. Apparently Hamilton is the lone heroic figure willing to stand up to the neo-liberals who threaten humanity with destruction.

Yet for anyone familiar with the contemporary discussion of economic growth, such claims are remarkable – and the notion that Hamilton’s ideas are ‘heretical’ in today’s context is absurd. At the London launch of Growth Fetish the prime minister’s head of policy, Geoff Mulgan, made the point that ‘growth scepticism’ has been going on for 30 years (in fact, you could argue that it has been 40). A huge literature has sprung up arguing that economic growth has to be checked in some way.

As far back as the early 1970s, books such as the Club of Rome’s The Limits to Growth and EF Schumacher’s Small is Beautiful were worldwide bestsellers. More recently some of Britain’s best-known columnists have put forward such ideas, including Will Hutton, George Monbiot, Richard Tomkins and Polly Toynbee – as have think-tanks such as the Fabian Society and the New Economics Foundation. Indeed, there is even a Journal of Happiness Studies, which focuses on subjective wellbeing rather than the objective benefits of growth (1).

Nor is scepticism towards economic growth restricted to intellectual debate. Britain’s economic policy under chancellor Gordon Brown could also be seen as based on growth scepticism. Brown continuously emphasises that stability is a pre-condition for economic growth, with his mantra that there can be ‘no return to boom and bust’. Under New Labour, economic growth is only seen as acceptable if it can be slow and steady.

The idea that economic growth has to be checked is also prevalent in the discussion of developing countries – indeed, since the Brundtland Report called for ‘sustainable development’ in 1987 this has become orthodoxy. In 1990 the United Nations began publishing annual ‘Human Development Reports’, which emphasised the factors in development besides growth (2), and launched a ‘human development index’ including life expectancy and literacy as well as income to measure wellbeing. Amartya Sen, an Indian development economist and adviser to the UN, even won a Nobel Prize in 1998 for his role in defining ‘human development’ (3).

Of course, those who would argue for no growth or a decline in economic activity are a tiny minority. Only deep greens explicitly put forward such a position – partly because mainstream environmentalists are sensitive to how unpopular it would be among the general public. The orthodox view, which is advocated by Hamilton, tends to cast doubts on the benefits of economic growth, focusing on problems such as environmental degradation, unhappiness and inequality.

Growth Fetish is interesting because it is an eloquent statement of the contemporary orthodoxy on growth. Indeed, the fact that it is written as a criticism of the supposed mainstream view probably gives it more appeal in these cynical times.

There is a nauseating undertone of elitism in Hamilton’s work. In his view, the marketing industry, including advertising, plays a key role in shaping individual desires. He refers to ‘gullible consumers’ and goes on to argue that ‘today’s average consumer may be an everyday victim of foolishness and feeble-mindedness in their consumption behaviour’. Presumably Hamilton has achieved an inner state of enlightenment that somehow makes him immune to such powerful forces.

Hamilton’s solution to such problems is a ‘politics of happiness’ he describes as ‘Eudemonism’, which does not depend upon ever-increasing levels of consumption. After making it clear that he supports the market in principle, Hamilton goes on to argue for shorter working hours, restrictions on advertising, new statistical measures of wellbeing, new forms of taxation and the implementation of ecodesign principles. He also implies that he favours some kind of intrinsic religious belief, but is vague about what form this might take.

Far from being characterised by a growth fetish, contemporary society is defined by low expectations about what is possible, and anxiety about possible side-effects of progress. Any attempt to strive for a better life is likely to be viewed with scorn and perhaps even presented as dangerous. Yet economic growth is a central part of human progress. The main problem today is that more growth is needed to help the world’s population overcome the scourge of scarcity.

Whatever people’s subjective sense of wellbeing, there remains a huge amount to be done to raise living standards, even in the more developed countries. For instance, we are constantly being told that there is a demographic problem that means that the elderly cannot expect a reasonable standard of living. But with greater economic growth it will become possible for the elderly and others not able to work to have higher living standards.

In addition to allowing people to have more consumer goods – including the flat-screen televisions that Hamilton likes to sneer at – growth has other potential benefits, such as allowing greater free time. Money might not make you happy, but it can give you the time and means to find out what does.

Growth Fetish, by Clive Hamilton, is published by Pluto Press. Buy this book from Amazon (UK) or Amazon (USA)

Daniel Ben-Ami is the author of Cowardly Capitalism: The Myth of the Global Financial Casino, John Wiley and Sons, 2001 (buy this book from Amazon (UK) or Amazon (USA)). He is also a contributor to Cultural Difference, Media Memories: Anglo-American Images of Japan, Continuum International Publishing Group, 1997 (buy this book from Amazon (UK) or Amazon (USA)).

Read on:

Economic Misery, by Benjamin Hunt

spiked-issue: Economy

(1) See the Journal of Happiness Studies

(2) See the Human Development Reports

(3) Amartya Sen – official Nobel prize press release

To enquire about republishing spiked’s content, a right to reply or to request a correction, please contact the managing editor, Viv Regan.

Topics Politics


Want to join the conversation?

Only spiked supporters and patrons, who donate regularly to us, can comment on our articles.

Join today