I spoke at the Cambridge Union in a debate with the motion “This House would prioritise economic growth over everything else”. You can watch the debate here. The post below is a blog post written from my notes.
I think the concept of growth can be very abstract. It’s easy for our eyes to glaze over amid all the chatter of percentage point changes and figures with varying amounts of zeros after them. And, don’t get me wrong, there will be numbers in the blog post. But I’d like to humanise it for a moment.
My mum was raised in absolute poverty. She never talks about it in those terms, but she has stories about what her childhood was like that make it clear. She lost an infant brother to typhoid. She says that her mother was an early feminist because, when there wasn’t enough food, she fed all her children the same amount and didn’t divert calories to her sons. This kind of life is unimaginable, not just to us in the UK, but also to most people in India today.
Hospitals cure tuberculosis and typhoid more often than they don’t, my cousins are all software developers, and – like in the UK – lots of Indians now struggle with too much food, not a lack.
Virtually all of this is down to economic growth. The story of India since the 1960s is one of increasing GDP. In 1960, it had a GDP per capita of about $83, a literacy rate of only 20%, and a childhood mortality rate of about 16%. Nowadays, those figures are $2000, 77%, and 2.7%. Why? A steady project of open trade, education, and institution building has turned India from a country of illiterate agricultural workers to a country with a young and well educated population, ready to join the global economy.
It is important not to mistake growth for GDP. GDP is to growth what positive LFTs are to Covid cases, or a map is to a physical territory. When we talk about increasing growth, we are talking about increasing the amount of stuff people have, and how easily they can get that stuff. It’s a measure of how well humans have been able to bend the natural world to our desires. We know that for most of human history almost everyone worked in harvesting and finding food, policing and war, or child rearing, and that the surplus after those necessary tasks was very small. But something happened in the Industrial Revolution that made all those tasks much more efficient and freed time up to pursue art, science and leisure. Growth is, to an extent, a measure of that surplus.
We also recognise that Spotify giving us access to all the world’s music is more valuable than a library of CDs. And the fact that our GDP statistics fail to value Spotify more than those CDs is a clear failure of the measurement of growth, as opposed to the concept of growth. Let us not mistake a conversation about prioritising economic growth for a conversation about prioritising GDP.
I reject Maslow’s hierarchy of needs – I think you can still enjoy music even if your parents don’t love you. But it describes a key human phenomenon, which is that when we are able to, we satisfy our basic needs.
Take child mortality as an example. In the year 1800, about half of all children who were born died before the age of five. Now, 96% of children survive to the age of five, and the four per cent who die live mostly in the poorest countries in the world. It’s clear that when people have the resources to do so, they’re better able to keep their children alive. Similarly, as economies grow, we see countries spend more on education. And we also see that economic growth is linked to women’s empowerment, democracy, and other things most people view as social goods.
Now you might say, if you care so much about child mortality or education, why not prioritise them instead?
Well you can only have one priority, and I think if we actually prioritised low levels of child mortality or CO2 emissions our world would look pretty dystopian. Say we prioritised low child mortality? Well we could do this by prohibiting new babies – if there aren’t any to begin with, there can’t be any to pass away. Or, we could take control of expectant mothers, banning them from anything unsafe or pleasurable in life, and then seize the children and make sure they are raised in pristinely clean and safe environments.
As Sam Bowman – my debating partner on the night – said, in his opening speech, economic growth is a Swiss Army knife, which gives us the ability to cope with our problems much better. It gives us the ability to make the tradeoffs that suit our situations, be they at the level of the family or nation.
I’m very keen to assert that this should not be a left/right debate. I lean to the right and I believe all my opposition is on the left, but almost every significant political thinker on either side of the political spectrum is pro-growth and has built their economic platform around it. Thatcher cut taxes and spending because she thought that would grow the economy. Stalin, similarly, used gulags and quotas as a means for making the soviet people better off. Even Scandinavian Social Democracies target economic growth and then redistribute it later.
So let me throw off all my scepticism about taxes and propose a thought experiment. What happens if we take all the wealth and resources in the world, stop growing, and redistribute it?
Global GDP per capita is about $12,000. In that scenario we would all be slightly poorer than the average person in Iraq, where child mortality is 2.5 per cent. That would be a very good start. Assuming that we don’t destroy any useful institutions in the process, the world would certainly be a better place. With Iraq’s infant mortality made global, we’d save about 2 million babies in total.
But in the rich world, we’d experience a real shock as we became less like a rich western country and more like a middle income country. Our infant mortality rate would go up by an order of magnitude and our adult life expectancy would fall by about a decade.I think, in that scenario the issue of economic growth would be of vital importance to us
Okay, so what if we say that poor countries should prioritise economic growth but that in wealthy countries we have done enough. Maybe you think there is very little to be gained if the UK gets as wealthy as the average person in Norway or Switzerland, and that it isn’t worth the effort.
I have two key responses to this. First is that a large part of the way countries get wealthier is by selling things to people from abroad. China would have struggled to get wealthier if they weren’t able to sell consumer goods to the west. By getting wealthier and being open to trade, saying nothing of the foreign aid and charitable spending that people in rich countries do, we make the rest of the world better off too. By deprioritising growth we would, effectively, be sacrificing the wellbeing of people abroad.
My second response is that I don’t think people in the UK are as wealthy as I would like us to be. If we distributed all the money in the UK evenly, and government spending stayed about the same, we would have a post-tax income of about £18,000, which is about the same as a PhD stipend. I would struggle to live a full adult life on the income of a student. As a nation, we are already struggling to afford many of the things that we believe people in the modern world should be able to access – like heating and childcare.
So maybe you respond by saying that the opposite of prioritising growth isn’t the same as stopping it. We can choose to allow growth to happen, maybe make it our second or third issue, and but prioritise something else.
I argue that we actually make a huge difference by just choosing to prioritise growth. In rich countries economic growth is standardly between about one and three per cent.
If the UK had sustained economic growth of about one per cent, in a generation, about 30 years, a person on minimum wage would go from earning about £18,000 to earning about £25,000. Not a massive difference, but better than nothing. At three per cent growth, they would be earning £45,000, similar to an average professional today. At five per cent growth, which is what America managed during their period of major growth, they’d be on about £80,000 – a salary for a senior doctor or software engineer.
On a global scale this is even more impressive. Let’s go back to India, because it is close to my heart. Indian GDP per capita is $2,000. At a rate of one per cent growth, they would be as wealthy as someone from Lebanon, with an infant mortality rate of about one per cent. That’s fantastic. At three per cent, they’d be as wealthy as Thailand, with a child mortality rate of about 0.6%. That’s even better. At five per cent growth, they would be as rich as Greece. That’s almost unimaginable.
The reason we want to prioritise economic growth is because there are hundreds of trade offs we have to make for economic growth – decisions about where to build houses, which taxes to raise,cut, or reform, and where to prioritise spending. By effectively prioritising growth, we can move from our sluggish one per cent growth up to two, three or maybe five per cent growth.
In truth, there are lots of things that I value more than economic growth. However, there is only one thing that I can think of that makes all other problems that bit easier to solve. Economic growth gives us the resources to tackle climate change, to feed the hungry, and heal the unwell. The surplus created by a modern economy is the reason that so many of us are now able to dedicate to anything other than survival. Survival is a given – now we can turn our minds to art and science. We’ve seen miraculous progress over the last few hundred years, but we shouldn’t be content when so many people sill go without the luxuries we have come to think of as every-day convenience. For that reason, I say that we should prioritise economic growth.