The Growth Delusion
Of all the “fun facts” in David Pilling’s engaging book on the multiple failures of neoliberal economics, this is the most revealing. Back in the late 1980s, after Thatcherism had had almost a decade to work its tax-cutting, deregulatory charms on Britain, the country’s top economists were puzzling over why Italy had overtaken Britain as the world’s fifth-biggest economy. Italy, with its red tape, constantly changing governments and apparent culture of idle Mediterranean pleasure, was enjoying more economic growth than a nation of thrifty shopkeepers.
But the Italians had recalculated the way they measured their off-book economy to include the activity of … the Mafia. Its crimes now counted as a legitimate part of economic growth. So too in Colombia, where the cocaine trade was included in official statistics so much so that growth took a hit in 2010 after the collapse of the Medellin cartel.
In the Netherlands, the prostitutes who loll about in the brothel windows also contribute to “economic growth”, as do the gun manufacturers and sellers in the US. By contrast, Japan, blessed with low crime and unemployment, long life expectancy, high-quality food, housing and medical care and almost no drug use, is supposedly a basket case.
Pilling demolishes the idea that economic growth is the best barometer of a nation’s wellbeing: “One problem with growth is that it requires endless production and, its close cousin, endless consumption ... For our economies to keep on moving forward, we must be insatiable.”
For the best part of two decades, China has been the poster child of economic progress. But 40 per cent of its river water is undrinkable and 15 per cent is completely unusable. Soil erosion is so serious that it is down to a few feet and in some places just a few inches. But the black, nutrient-rich soil in parts of Africa, which can lie idle for a season or two to allow it to regenerate, is an unproductive natural asset.
If Pilling was a sceptic, it was among apostles of neoliberalism at the Financial Times, where he worked for 25 years. Now covering Africa, he argues there are better measurements of national good, such as life span, median income, reafforestation (Norway, for example, trebling its tree cover in the past 100 years) and higher literacy. The Growth Delusion is not a warm and fuzzy celebration of “gross national happiness” or any similar fad. It is a statement of common sense. PT
Bloomsbury, 352pp, $29.99
This article was first published in the print edition of The Saturday Paper on Feb 24, 2018 as "David Pilling, The Growth Delusion". Subscribe here.