The Growth Delusion by David Pilling
This book was written by David Pilling, a former reporter at the Financial Times with over 20 years of experience. It came about when Pilling, after years of reporting, realised that the Gross Domestic Product (GDP)— the statistical basis of our global economy, no longer made sense in the context of our modern day. Economists and governments proudly exhibit high GDP levels and claim to have achieved a high standard of living, yet closer inspection on the ground tells a very different story. Pilling also found that aside from actual economic realities, metrics like the standard of living also heavily depend upon environmental and social issues. Pilling goes on to examine the commonly held concept of rampantly consuming to boost the “economy” and argues that overconsumption is simply destroying the natural environment and depleting our limited resources.
“Economics can present a distorted view of the world. So much of what is important to us, from clean air to safe streets and from steady jobs to sound minds, lies outside its range of vision.”(Pilling, 2018, p.13)
“The Growth Delusion” shows us that our current actions of overconsumption are wrong and economic measurements based on consumption are oversimplified. A concept born during World War II, GDP can be defined as the total value of all final goods and services produced for the marketplace during a given period, within the country’s borders. The very definition of GDP omits the natural capital— the source of all human activity. The book goes on to detail that a better solution might be to embrace environmental economics by incorporating sustainability in economic equations.
“Economic growth has become a fetish, a proxy for everything we are supposed to care about and an altar on which we are prepared to sacrifice it all.”(Pilling, 2018, p.11)
COVID-19 is a perfect starting ground for the implementation of environmental economics. With the prolific implementation of remote workplaces and a temporary reduction of harmful industrial activity, this disease has given an opportunity for governments to implement sustainable strategies. They can begin by incorporating sustainability into the economic equations and by embracing sustainable financial products. Investments into pollutive sources like coal and oil companies should also be phased out, and though this may seem like an impossible task, it is very much within our reach.
This book was well-written and is suited for anyone to read, even for those without an economics background (like me!). Before reading this book, I only had an elementary understanding of economics, yet I was able to follow the book’s narrative very easily. The Growth Delusion is hence suitable for all avid learners and can provide a fresh perspective on the changing economic situation of the world, and how we could better reflect economic realities with a more holistic and humanist system.
I was shocked to learn that our layman understanding of the economy is vastly insufficient where we have always been focused on short-termism— the pressure to focus on quarterly or monthly portfolio performances, yet this is unsustainable and damaging to nature. Furthermore, this book got me interested in complex financial issues, and I took an online course on UN CC: Learn (Fundamentals of Sustainable Finance). One of my biggest takeaways from the course was that the transition to 100% clean energy is easier now than before due to advances in technology, so in the long term, the amount of investment needed for a complete transition to clean energy is realistically possible (so we should stop believing that it’s not!). Furthermore, I also read about the 2008 financial crisis and watched “The Big Short” on Netflix (you should check it out) which provided a scintillating overview of the crisis’ timeline.
What has become clear after all my readings is that the transition towards a different, more sustainable system will be a long and challenging process. Our financial institutions and systems are deeply rooted in the traditional economic worldview, but with sustained effort, we can begin to embrace greener economics.
Written by: Letitia