growth religion

Rev Giles Fraser on economic growth

Rev Giles Fraser came to public attention during the Occupy camp outside St Pauls. As a canon there, he sided with the protestors and shone a light on the compromised position of the church. He rather than support the forced removal of the protestors.

This week I caught him on the radio as I was giving little Zach his breakfast, doing the Thought for the Day.

“One of the problems the whole idea of sustainability will always come up against is the shared assumption of a great many political parties, that economic growth is always and everywhere an unqualified good thing.

Of course I understand the argument that, in periods of economic decline, stimulus and growth may be necessary. You cannot make a thin man fatter by putting him on a diet. But, to continue the metaphor, neither is it healthy to think in terms of continual weight-gain. This is why New York has recently banned the sale of super-size fizzy drinks. Bigger is not always better.

And so it is with the economy. Growth has become an addiction. The fact that Europeans have borrowed billions and billions of euros in order to finance this addiction is one of the things that’s behind the current financial crisis.

The Christian side of all this has to do with a respect for limits and the idea that there is such a thing as having enough.”

Good words. You can hear the .

4 comments

  1. Amen. When I was still a boy my Grandfather (a banker) taught me not to spend money on things I don’t need and never to sign contracts I don’t fully comprehend. (Unfortunately the latter lesson I later had to learn myself the hard way). He was a banker trained in pre WWII Europe. Before money had become completely disconnected from the real world of things and beings.

    There is such a thing as enough. It is painful that this has to be stressed. But I think that it is widely understood now that economic growth is more than an addiction – it is a built in requirement, an algorithm, a function underlying our financial system. People are manipulated into being addicts (–> artificial demands) in order to keep “the market” running.

    About the borrowing… how was it in Spain? Banks gave credits to real estate developers who, in the end, couldn’t sell the new estates because the market had slowed down. But the interest doesn’t care: it wants to be paid. It has to be paid. Has it? But it can’t. So now the tax payer has to pay the interest. Why exactly? I do not see that “Europeans have borrowed lots of money”. I see that there were shady deals between banks and developers. I see “grand theft” tax evasion. I see that banks apparently – unlike all other businesses and individuals – do not have to carry their own risks. The bank gave the credit. When it defaults, it is the bank’s business risk. Why should it be otherwise.

  2. Exactly – this is why interest is so damaging, because it requires a return whether or not the enterprise succeeds. The financial industry wins if it lends responsibly, and wins if it lends irresponsibly. A true partnership would share the risk as well as the rewards, a principle best articulated today in Islamic finance.

  3. Yes, we typically, (all to often), are interested in cooperation with others IF we hope to benefit, but we’re not interested if it turns sour and we have less to gain than we hoped for, then cooperation is forgotten. The ‘big boys’ are no different, but we must try to find a way to make them behave better!
    In addition to the REV.’s comment – We also generally fear being left behind so we never think we have enough if there is more to be had. And furthermore, we not only want more growth regardless of obvious limits, but we want to control the environment as well, which adds insult to injury for all of us. We can only try to understand and help.

  4. Good point Stefan & Jeremy and I think we can further. Growth is not just a product of our financial system – with interest on loans – it is a built in tendency within competitive market economies. At the micro level, business must invest to make more money, in a never-ending spiral, just to survive in competition (then to dominate when they become massive MNCs). In short we don’t just have an economy with growth, with have a growth economy. In order to be ‘healthy’ this (global) economy must have 3 % per annum growth on pain of rising unemployment and/or recession (look at Europe now). Of course there is a powerful culture of consumption which is vital for the functioning of the growth economy, but if people abandoned this en masse, you would quickly have large scale recession/depression. We need planned de-growth, then (at least) tight (democratic) social control over market forces. So the Rev is right – we are addicted to consumption/growth…but the problem is much deeper than that, and the sustainable steady state economy he wants requires unprecedented economic/political/cultural changes…

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