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What's so good about growth?

15 Comments

It occurs to me that sometimes we confuse growth and development.

I have been reading Donella Meadows’ excellent book “Thinking in Systems“. In it she tells the tale of Jay Forrester, one of the early proponents of systems thinking, who when asked by the Club of Rome in the early 1970s to show how major problems of poverty and hunger, environmental destruction, resource depletion, urban deterioration and unemployment might be solved, alighted on a clear leverage point: growth.

Not just population growth, but economic growth. Growth clearly is the solution to many of these problems. What Forrester revealed was not that world leaders didn’t understand that growth was important. The problem was that they were pushing it in the wrong direction.

As has now become much more obvious than it was then there are limits to our resources, and growth has costs as well as benefits. For example, economic growth has led to increased CO2 emissions, and therefore risk to the climate.

So this raises a major question. Why in the face of knowledge about the dangers of rampant growth do we continue to push this lever in the wrong direction? Why are we so obsessed by getting back to rapid economic growth?

I’ll suggest a few reasons; you can probably offer more:

  • It has worked in the past. Economic growth has helped us reach the standard of living we now have in the developed world, and is helping raise living standards in the developing world. And, of course, we tend to think that if something has worked in the past that it must still be a good strategy.
  • Growth impresses us. When we see a sunflower shoot up or a child suddenly grow long legs it is impressive, and it does feel good. There’s something attractive about that power. We’re temporarily in awe.
  • We’re told again and again that we benefit from growth, and, of course, sometimes we do. Growth does have benefits.

But we need to be careful. Growth can mean a lot of different things. As Nassim Taleb has said there is something not quite right when growth leads to extreme imbalances – for example, in wealth. For example, randomly gathering 1000 people then adding the heaviest person on the planet would only add perhaps 0.3% to the total weight of the group.

But doing the same thing according to wealth and adding the richest person would lead to much great variance. The richest person would be worth some 50 billion dollars versus a total of 1 to 2 million for all the others put together. As Taleb suggests, and recents events seem to have shown, these imbalances can greatly affect us.

So we need a clearer a definition of growth. And different types of growth: slower growth. No growth. Negative growth. Progress towards goals that matter, rather than just growth for growth’s sake. Development, in the sense of gaining maturity, not growth.

Conscious growth?

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Author: Pete Burden

Strategy, Leadership and Organisational Coach I am an experienced strategy, leadership and organisational coach. I work with the MDs of purpose-led businesses - people using the freedom, flexibility, and practicality of business to disrupt the world in positive ways.

15 thoughts on “What's so good about growth?

  1. Great post Pete.

    I think there’s a fourth, very human and deep rooted reason for us to crave growth. To our descended-from-apes selves, growth means more personal rewards: A bigger house. More ‘resources’ with which to attract a mate. This instinct doesn’t have an ‘off’ switch when we’re comfortable. We always want more. We are greedy animals and growth feeds us.

    Re-training ourselves to be satisfied by less material and tangible rewards is a big challenge because we’re fighting human nature (although I strongly believe we have it in us to develop in this way.)

    I completely agree agree with your point about redefining growth. At the moment the accepted definition is capital growth, but our view of capital is narrow: Money. When we learn to value social capital; environmental capital; human capital etc as much as money then we can look for growth and balance in all these areas and we’ll be richer for it.

  2. Excellent point Tom. I am sure greed feeds us. And challenging this is a vitally important activity.

    But I wonder if it really can be innate?

    After all, for most of human history (say a couple of hundred thousand years?) we haven’t had bigger houses or more resources with which to attract a mate. Until maybe 10,000 years ago weren’t people mainly nomadic?

    More houses and animals and crops etc only made sense once we settled down.

    In evolutionary terms 10,000 years doesn’t sound very long.

  3. Pete,

    You would think you were stating the obvious, but you are not.

    Most people in our society have been brought up to believe that economic growth is the key thing for humanity to thrive in our world. It is deeply ingrained in our education system, our economics and social systems even at a fundamental philosophical level of what is a human being.

    Now why, when and how did that come about?

    Why it developed was a natural progression from early Man to survive and be the fittest, over time driven by an addiction to acquiring power and status and fuelled by a legitimacy of greed. These are base qualities in us that need a powerful counterbalance in the system we are part of. That counterbalance was our natural world with us as a part of nature within it, not as a ruler of that world who has subjugated it to his own wants, disturbing a natural balance.

    When it occurred was from the very start of our creation, but it wasn’t until we had developed the more powerful tools, which could augment our frightening base qualities that we really started to do damage to the environment. The perfect storm occurred when an economic and political system was fashioned to legitimise and amplify this rape of the planet. It was called the capitalist consumer society and this has been encouraged for 200 years.

    What has resulted is a society that is encouraged to consume more, buy things we don’t need, do things we don’t need to do, and subscribe to the system which promises gains for those who fuel this machine of material growth and consumption.

    This system has changed people so that they are alienated from their natural environment, wasting and destroying its resources. This system has encouraged a hell-for-leather scramble to have a bigger piece of a seemingly ever growing pie, fuelling a population growth as fodder for the cake making and cake consuming machine. The system is defended and made stronger by those who have climbed to the top and stand to lose more if it was replaced and these people acquire power and means to keep the machinery and the fabrication going.

    What is needed is a new system or indeed a return to the original system where man is just one part of an organic system of living beings, sustained by a natural world of limited resources. We need a goal for humanity of sustaining this nourishing system and to shift from a material growth to a personal growth of well-being for us all on this planet.

    Duncan

  4. Peter, Very stimulating as ever. A couple of points :how would you sell this concept to shareholders as a board? Surely the entire capitalist system and culture is driven by the concept of growth? To change that culture is a bit like going out into Brighton and telling people to stop shopping and go home!
    Nevertheless I think you make some very important points. I personally like ideas that work with the market to regulate growth such as carbon trading. There could be more imaginative uses of tax. How about a tree tax? You have to pay to subsidise a forest if you commit environmental damage etc
    Personally I think I would be lost if you told me that I was to stop going for growth for the business. I don’t want to be rambling down country lanes and having sleeps in the afternoon like my retired Dad, just yet!!

  5. Justin, you got me thinking about how on earth could we switch our business economy to serve a more sustainable world.

    I suggest we introduce ‘A World Sustainable Market’.

    In today’s world, the economic model encourages and allows people to have the freedom to buy whatever they want, that is available, as long as they can afford it. This consumer market is driven both by what people want and also by what companies encourage people to buy. The driving force is for companies to grow their profits and nations to continually grow their total income.

    So how do we shift this economic model and its attendant social model, to serve a sustainable world?

    I think we will need to set up a World Sustainable Market and economy whose objective is to maintain the well-being of the entire world within the limitations of its resources.

    For instance, if a priority is to shift energy sources to less carbon dependent ones, then there could be encouragement for say, electric cars to be sold in the Market. Businesses would be encouraged by incentives, such as market price for product, investment; and also be influenced by regulation and disincentives.

    The market would reward companies for producing the things best serving the goal of maintaining a sustainable world.

    The World Sustainable Market would need to be governed like a World Bank, with power to exercise its policies and strategies. There could be subsidiary markets at trading area; country; and local district levels.

    People and companies will still be motivated in a capitalist economy, but the World Sustainable Market, would drive what products would be available at what price and what resources would be utilised. You could call it Capitalism for a Sustainable World.

    The aspect of fairness in society is another big and different issue.

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  7. Pete and Tom, Duncan and Justin: great discussion – my thoughts about this relate to extreme behaviours and what I’m considering as natural growth. More on my blog at freeranging.wordpress.com.

  8. I think growth is natural in a business context, but if we had a strong purpose and Earth focus for it, then I think we would have Jim Byford’s ‘Good growth’

    Well here is one such focus…..

    A couple of days ago I pinched off my son, James Lovelock’s latest book ‘The Vanishing Face of Gaia’ and read it with a great unease. Lovelock doesn’t pull any punches in this warning to the world that the point of no return for Earth has passed and the effects of Climate Change will, in a few decades, start to reap real destruction.

    If you think he could be right, then his suggested way forward does provide a clear objective for our business growth and a much focussed, war-like urgency to organise our scientific, engineering and business contributions.

    He believes that the best we can achieve is to recognise that most areas on Earth will soon be uninhabitable and that there will be just a few areas which can sustain life and one of them will be the UK. It is these pockets which carry the responsibility to become self-sustainable in order to preserve some of our species.

    So the urgency is to get the UK self-sustaining, in order to support its 100 million people within 30 years. We need to be self-sufficient in water, food, energy and provide accommodation and support for our wellbeing.

    It will need a strong leader to organise the UK business market to provide the resources we will need.

    This challenge to make UK sustainable should be full of opportunity and provide a strong purpose for all.

    I recommend the book.

  9. Duncan
    Completely agree. I paused from outlining the issue of focus which I take as the motivation to act on the big picture Lovelock paints.

    I think this focus is about intrinsic and extrinsic motivation. Dan Pink tackles this in his recent TED talk where he outlines Autonomy, Mastery and Purpose as drivers. Worth a look – inspiring stuff that starts with the individual and extends to a broader potential social impact.

  10. Duncan

    You paint a rather dark future.

    And I’m not really sure I understand the logic. In Lovelock’s world if most areas of the world are uninhabitable where have all the people gone?

    Unless he posits mass extinction events then presumably there is mass migration instead? Where do people go: presumably towards the habitable areas?

    In that case Britain won’t have a cosy 100 million people. It’ll be many more than that.

    The obvious response to that is “pull up the draw bridge”. Well, we know (from 9/11, from “Star Wars”/SDI) that this won’t work. In an age of nuclear weapons we simply can’t get away from each other. We really do share the whole planet with each other.

    That leads me to the conclusion that the only sensible approach is to start rapidly trying to mitigate the impact of climate change worldwide now – and at the same time build as much resilience and strength into developing countries as is humanly possible.

    Of course, we should aim for self-sufficiency here in the UK too. We’re in an incredibly powerful and rich country – and with some pain I think we’ve a good chance of becoming self-sufficient. And apart from anything else we can set a brilliant example and act as an experimental test-bed for other less well-off countries.

    Business can help with, and lead, on this.

    But the rest of the world isn’t like that. With more than a billion people living on less than $1 a day ($365 a year!) resilience is already low.

    In my view, we need to look at the whole system globally – not just what we do in the UK. Not having read the book I can’t say – but I guess Professor Lovelock would agree?

    Pete

  11. Pete,

    You are right Lovelock does think of the whole world, his Gaia approach is Systems Theory based and thus his suggestions here, at first, seem surprising.

    Lovelock does paint the darkest future and it is one we find very difficult to consider. He does think there will be mass extinctions and he thinks the best course of action is to at least save the species by preparing those parts of the Earth, least likely to be affected by adverse climate change, as safe havens for a population which is sustainable, hence the growth only up to 100m for UK. These will, as you suggest, need to be defended from being overrun.

    It sounds bleak.

    He says he has been driven to this partly by governments and organisations such as the IPCC (Intergovernmental Panel on Climate Change) pandering to politics and dogma instead of using the true scientific observations, which are more damning.

    He believes the situation is similar to the start of WWII in Britain, he was 20 years old, when people wanted to believe in peace and only woke up when the hostile forces were bearing down on them. He said it took strong determined leadership from Churchill to bind the nation into a single-minded effort to wage a difficult war. He is shouting out for similar now.

    He is saying we haven’t time to continue in a business-as-usual way, so the priority should be to sustain ours and other nations as viable sustainable habitats.

    I guess by UK giving a big priority to it being self-sufficient and sustainable, say within 10-20 years, this can act as you say Pete as “a brilliant example and act as an experimental test-bed for other less well-off countries.”

    As well as this, as a secondary priority we can contribute to helping other nations.

    When I look at the news and Internet, I see loads of discussion, research, opinions and projects on ways to counter Climate Change, but I don’t get a sense that anyone in the UK is organising and driving the activity to make us self-sufficient and sustainable within a 20 year period. I guess we will have to wait until there is the first real Climate Change disaster, maybe a food war, or mass starvation, or energy scarcity.

    Do you think the business community could take a lead in some way in helping to build and support the infrastructure of a growing self-sufficient network of supplies and accommodation for the UK? The politicians would also need to be dragged in to remove blockages in political and administration system of the country, such as planning laws.

    It would make a very interesting venture.

    Or maybe it is all in hand — I would like to think so.

    Duncan

  12. Can I suggest you read The Constant Economy by Zac Goldsmith there are plenty of interesting ideas in there, practical ones about growing in sustainable ways. Plus the New Scientist is running an excellent series under the theme of a blueprint for a better world.
    Goldsmith argues that the government as a buyer could be doing a lot more to use its purchasing power to buy local and buy organic etc which is interesting. He also puts forward the idea that company’s carbon emissions should be seen as a liability and a commercial disadvantage. There’s also a really good series of pieces in the Harvard Business Review about sustainability being the key to business innovation.
    Happy reading!

  13. Thanks Justin, those are some useful pointers.

    The Tories are hoping Zac Goldsmith wins the Richmond Park seat at the next election and in him, they may have upped their credentials on the Environmental front. See a review of Zac Goldsmith’s book from the current MP for Richmond Park, Susan Kramer, Liberal:

    http://www.newstatesman.com/books/2009/09/goldsmith-taxes-constant .

    You can see with politicians, all we get are battles about party lines, all gets compromised to serve the brand.

    I think it will take a determined business community to initiate and lead a successful programme for UK to be sustainable, with politicians in support, being fed necessary tasks to be done.

    Maybe it is better led by business people who can use their skills in driving a strategy to achieve concrete goals for UK self-sufficiency in products and services such as Energy, Food, Water, Health & People Care, Accommodation, Travel, etc. As in WWII, a more practical and single-minded UK civil government will be needed to provide and maintain an infrastructure to support and defend this UK-Self Sufficiency process.

    I tried to find out if the UK government were working on making the UK self-sufficient, but couldn’t find anything. Is there anything they are doing on this? The sort of thing I did find was DEFRA have a strategy on Food security which relies on the EU which I think is very dangerous after what we saw when every country was for themselves when there was an Energy supply scare the other year.

    I did see an article that Wales are aiming for self-sufficiency in Energy within 20 years:

    http://www.guardian.co.uk/environment/2009/may/22/wales-energy-efficient-plans

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