Ever since it was adopted at the Bretton Woods Conference of 1944 as a global standard for measurement of economic growth of a nation, GDP has been the bread and butter of economists and governments alike. Modern economics would be in a no-man’s land without it and governments would lose their legitimacy if they cannot ensure its growth. In traditional economics, GDP is based on production, consumption and the use of earth’s resources, but it cannot distinguish between good and bad consumption, neither can it reflect how its growth gets distributed and hence cannot capture inequality.

It also does not count the natural capital and ecosystems of a country, it assumes that natural resources are free and accounts for them only when they are extracted, commoditized and sold. In other words, GDP measures the quantity of growth without any reference to quality, as Senator Robert Kennedy aptly said in 1968, “Our gross national product does not allow for the health of our children, the quality of their education or the joy of their play.

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It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country ~ it measures everything, in short, except that which makes life worthwhile.” Almost two-thirds of India’s GDP comes from consumption, like most other nations, and this consumption-driven growth of GDP is based on the increasing use of energy.

Our energy basket is still overwhelmingly based on polluting fossil fuels, and GDP increases are causing unprecedented pollution and global warming leading to environmental catastrophe that is staring at our face. GDP growth in emerging economies like China and India has generated a sizable and affluent middle class whose conspicuous consumption is increasingly making ever more demands on earth’s limited resources.

Every stage in the manufacture of a product or its disposal exacts its environmental costs in the form of habitat destruction, biodiversity loss and pollution. Ever since the industrial revolution, our capitalist socio-economic system founded on growth without limits led to the twin crises of climate change and destruction of the environment. Sustainable technology is a myth ~ even solar-powered electric vehicles or wind turbines have physical limits and exact their environmental costs.

Environmentalists measure sustainability not only in terms of the carbon footprint but also in terms of another indicator called the material footprint (MF) which is the aggregate quantity of biomass, metal ores, construction minerals and fossil fuels used during production and consumption of a product. The global MF has increased by 70 per cent from 43 billion metric tonne (MT) in 1990 to 92 billion MT in 2017 and is increasing faster than both population and GDP.

Most of it is due to the high-income nations which had a per capita MF five times more than that of the lower middleincome countries like India. The MF of high-income countries is also greater than their domestic material consumption, indicating that they consume primary materials extracted from other countries. It is this offshoring of production to meet the demands of rich nations that is driving the ecological devastation in poorer countries.

We hoped that technology would be the answer to decouple growth in material use from economic growth, but in reality, it became another vehicle for satisfying the unlimited greed of corporations and more efficient destruction of the environment. Besides, there are also physical and economic constraints to what it can do ~ examples are quantum physics or the second law of thermodynamics which places inexorable constraints on technological solutions. One hears talk about recycling or circular economy, but 100 per cent circularity is an impossibility.

If material inputs are to match our recycling capacity, the economy has to be hugely downsized to become a very slow economy. While efficiency is limited by the laws of physics, there is no limit on the socioeconomic demands for consumption. Further, a low-income country requires exponential economic growth to catch up with the others, which will only increase the MF. Rich economies are not going to downscale their production and consumption, and greening of production is not going to address the problems.

The capitalist system based on higher consumption has not only led to the present environmental crisis but also caused extreme inequality and severe financial instability, throwing the entire world into turmoil from time to time, as last seen in 2008. The inescapable conclusion is that it is impossible to decouple material extraction from economic growth.

To make the world sustainable in the long run, growth as measured by GDP must reduce drastically, but it would mean severe economic recession with cascading effects like collapse of stock markets, bankruptcies, unemployment and non-availability of credit leading to denial of human needs and resultant social chaos, which will make these choices unacceptable.

The stakeholders in development are the states, corporations and individuals ~ especially the super-affluent consumers in a society who drive the norms of consumption. Humanity is not yet ready to consider the idea of compromising the GDP growth, as shown by Sustainable Development Goals (SDGs) adopted by the UN. While the SDG-8 aims at continued global GDP growth around 3 per cent to eliminate hunger and poverty, it contradicts SDG-12 on Responsible Consumption and Production and SDG-13 on Climate Action.

These SDGs are simultaneously unattainable which makes the SDG framework inherently incoherent. In fact, the SDGs do not cover sustainable production and consumption, indicating that the world is not yet ready to abandon its cherished model of growth that will ultimately lead to the decay of the planet. As George Monbiot wrote in The Guardian, “Capitalism is killing the planet. It’s time we stop buying into our own destruction”.

The question is ~ do we have any alternative? In 1973, in his book, Small Is Beautiful, E F Schumacher argued that capitalism had brought higher living standards at the cost of deteriorating social values and depletion of natural resources which are treated as expendables instead of capital. He warned against the “bigness” of large industries and large cities that would inevitably lead to the depletion of those resources.

Questioning the necessity of ever-increasing growth, he advocated the use of intermediate technologies based on simple tools rather than advanced machines to improve people’s well-being. Studying villagebased economies in Myanmar, he harped on the philosophy of “enoughness”, stressing that people and Nature are interdependent.

Citing Buddhist principles, he suggested that economic growth has to harmonise with spiritual values, and that “it is not a question of choosing between “modern growth” and “traditional stagnation” but to find the “right path of development, the Middle way between materialistic heedlessness and traditional immobility, in short, finding the tight way to livelihood.”

These ideas are also deeply ingrained in ancient Indian philosophy. In line with these ideas, some alternative economic models have emerged, focussing on multi-dimensional social wellbeing and environmental sustainability, instead of merely GDP-focussed growth, like Kate Raworth’s Doughnut Economics (2012). In her model, the safe and just space for humanity to operate is a narrow one between the conflicting demands of human needs and environmental sustainability.

Growth may necessarily be encroachment upon Nature, but encroach upon her one step too far, and her retribution starts shaking the very foundation of human well-being. Another alternative growth model is called “Green Growth” promoted by the OECD, the EU and the World Bank which aims to foster “economic growth and development while ensuring that natural assets continue to provide the resources and environmental services on which our well-being relies”. It relies on scientific and technological innovations like eco-design, green innovation, etc. that promote sustainability.

There are also theories about post-prosperity or managing without growth, that is, by decoupling economic growth from social well-being. These approaches would need redefining our ideas about welfare state, labour markets, capitalism, healthcare, pension system etc. to make them independent of GDP, which cannot come without significant changes in our value system and culture.

This will necessarily lead to reduced consumption and production, cap trade and business profits, encourage green investments and must assure a universal basis income with reduced working hours to satisfy the basic human needs. These theories believe that such changes, difficult though they are to implement, can be brought within the prevailing capitalist market system and democratic states. A variation is the theory of “post-growth capitalism,” in which production for profit would continue, but the economy would be reorganized along very different lines. In “Prosperity Without Growth: Foundations for the Economy of Tomorrow” (2009), Tim Jackson, a British academic, calls on Western countries to shift their economies from mass-market production to local services such as nursing, teaching, and handicrafts ~ that could be less resource-intensive.

“Prosperity consists in our ability to flourish as human beings ~ within the ecological limits of a finite planet,” Jackson wrote, “The challenge for our society is to create the conditions under which this is possible.” Major economies are already experiencing what is known as “secular stagnation” as a result to ageing population, higher life expectancy, low consumption and low investment.

But even a 2 per cent growth in an advanced economy like the USA can expand the GDP significantly over time, doubling by 2055 according to some estimates. The choices that humanity has to make will be all-important for the future

(The writer is a commentator, author and academic. Opinions expressed are personal)