Growth

Many of the more delusional, socialist contributors to the Claverton Energy group of energy fantasists (as I labelled them previously to their founder member's apparent offence) are persistently and vehemently opposed to "growth". See, for example, a recent exchange of half-baked ideas on the subject of "Olduvai theory". But to be fair, this sort of nonsense is at least partly provoked by the frequent exposition of the opposite extreme: the naïve promotion of growth at all costs (popular amongst our political elites).

Of course, neither side bothers to define what it means by growth, and it struck me that the concept seems to be singularly ill-defined, at least in the context of popular philsophizing. At best, it seems to be mostly useless in its vagueness, and at worst, it seems to be the cause of much confusion and misunderstanding, leading to economic and philosophical errors, and hostility between groups who mean different things by the same term.

What these Clavertonians want is a shift to a more "sustainable" way of life (and energy system in particular). There's a whole other can of worms in the term "sustainable", but let's imagine for a moment that we could all roughly agree on what it meant. And let's say that the Clavertonians persuaded most people to share their preference. The economy would become more focused on sustainable goods and less focused on unsustainable goods. The share of sustainable goods in the economy would increase. Increased demand for and supply of these goods would cause not only their share of the economy, but the economy as a whole to grow (unless inhibited by bureaucratic inefficiencies). Growth would be synonymous with improved sustainability, rather than antithetical to it, as these Clavertonians perceive is the case at the moment. Would they still oppose growth in those circumstances? If not, why do they oppose growth per se now? What they really oppose is not growth, but the undervaluing (as they see it) of sustainable goods and the overvaluing of unsustainable goods. But starting from this misapprehension, they fall easily into other economic fallacies and socialist delusions.

Conversely, the "growth at all costs" crowd are pandering to mirror-image delusions. Some of them focus on GDP growth, forgetting that some things that are harmful to the economy and to people's welfare, such as monetary inflation or expansion of the bureaucracy funded by deficit spending, can give a short-term boost to GDP. Simple population-change can give a distorted impression - mass immigration will probably increase GDP even though it may not be beneficial to most people, but if we were to try to counteract that by referring to GDP per capita rather than plain GDP, we could be fooled into thinking that high mortality (whether natural or artificial) can be an economic blessing.

Others confuse growth with consumption, and seek any means to stimulate consumption (whether or not our propensities to consume and to save are reflected in a sustainable balance of spending and saving, or have been distorted by government policies) because they perceive that resumed growth hinges on resumed consumption, and that our general prosperity and wellbeing hinges on resumed growth. Actually, where (as in recent times) we have had substantial malinvestment and an imbalance of spending relative to saving thanks to unwise government action (or inaction), we need a period of creative destruction, rebuilding of savings and consequent reduction in spending, in order that the economy can return to a more realistic and satisfactory balance (until the next time that governments decide to screw it up).

Growth is not necessarily good or bad. It is the nature of the growth that matters. There will be many shades of opinion on what constitutes "good growth", but to oppose growth per se or promote it willy-nilly is like opposing or promoting discipline. A world in which there is no discipline and everyone does exactly what they want (the law of the jungle) would be chaotic and dissatisfying to most, but a world where the need for some discipline is abused, perhaps by an authoritarian power, is intolerable. The virtue of particular instances of discipline or growth depends on whether they enhance or reduce people's scope to move from a less to a more satisfactory condition.

And for that, there is no satisfactory metric, whether we are talking about discipline or growth. GDP is not a meaningful proxy for the latter, even for a "first-order approximation", nor is any other econometric index. Instead of approaching this with the objective of trying to measure the immeasurable, we should approach it from a philosophical or systemic perspective. We can say that, if we create the conditions that provide the greatest scope for people to move to a more satisfactory condition and be protected from unwarranted impositions by others, then the developments that proceed from those conditions are as "good growth" as it is possible to encourage, without trying vainly to put a figure on it.

The apparent vulnerability of this approach is that it could be argued that any system can be defended in this way. How are we to know what's right when we do not weigh the outcomes? A fascist or communist making the same argument would view whatever proceeded from the implementation of their philosophy as no grounds for its rejection, as the system is (to them) designed to produce the greatest benefit to the greatest number of people, and (by this argument) whatever proceeds from it must therefore be that greatest good in action.

But this is the timidity of the intellectual relativist. A follower of Austrian economics believes that the superiority of the classical-liberal system (and the inevitable failure of interventionist and socialist systems) is not just a matter of opinion dependent on empirical verification, but a logical fact, demonstrable by a priori reasoning. Even if others cannot be persuaded, a confident Austrian should have faith that experience will prove the truth of this assertion (as the repeated collapse of communist economic systems should have done for anyone with an open mind). And it is not as though a more sophisticated empirical approach is any more objective. You have to decide what to measure, and that requires you to make a priori value judgments about what is good.

Whether people will be misled by interventionist and socialist intellectuals (in the Hayekian sense) in the conclusions to be drawn from experience is another matter. Hopefully there is a limit to the number of times that proponents of interventionist fallacies can keep polishing the turds of theories that have been smeared on the pavement of history by the gumboot of events. They are having a good go at it again at the moment, but it seems to me that increasing numbers of people simply don't believe the bullshit of the intellectuals, though they may not yet be aware of the more credible alternative. For that we can thank the control that the intellectuals have over public discourse, and their outright hostility to a philosophy that denies the ability of clever people such as themselves to override the fundamental laws that govern human cooperation, to tweak those laws to improve the outcomes, or to know what is good for other people better than those people know themselves. It is the hostility to laissez-faire of the over-protective parent who fears to give their children their freedom, not because of the harm they fear may come to the children, but because they need their children's dependence to reassure themselves of their continued significance, wisdom and beneficence.