Why we need the HPI

The myth of economic growth as progress has held sway for over half a century. But now, stimulated by the ongoing economic crisis and impending environmental and resource crises, alternative visions of progress, such as that represented by the HPI, are helping to raise the issue of the damage caused by an overwhelming focus on growth, and highlight the possibility of doing things differently.

During an economic crisis, it may seem inopportune to question the centrality of economic growth. Now more than ever, governments around the world are desperate to restart growth by any means possible. And yet we should not lose sight of the fact that economic growth is just one strategy to achieve well-being and, in terms of natural resources, a demonstrably inefficient one. Rather than pursuing growth at all costs, even if detrimental to well-being or sustainability, leaders should be striving to foster well-being and pursue sustainability, even if detrimental to growth. The horse and the cart need to be returned to their rightful places. As the UK’s Sustainable Development Commission, a public body that directly advises the Prime Minister’s office on sustainable development issues, eloquently points out in its report Prosperity Without Growth?:

the state has become caught up in a belief that growth should trump all other policy goals. But this narrow pursuit of growth represents a horrible distortion of the common good

Things have not always been like this. For most of the history of humanity, economic growth was a minor phenomenon: a side-effect, where it existed, of the pursuit of other goals. It only attained its quasi-mystical role when GDP was placed atop the podium of indicators with the development of the United Nations System of National Accounts, in 1947, when much of the world needed to be rebuilt following the war.

Some time since then, economic growth per se became less pressing a need for developed countries. But systems carry their own momentum, and even the wealthiest countries still pursue economic growth as if they were still struggling to recover from the war. The European Union’s focal strategy – the Lisbon Strategy – is pivoted on growth. Since 2005, OECD has published an annual report entitled Going for growth which attempts to untangle how member states can quicken the pace of their GDP growth.

Biologists talk about physical growth as a process which has an optimum level beyond which further growth is not beneficial, and can indeed turn malignant. Economic growth can be subjected to the same analysis. Aside from the obvious environmental impacts which we have already discussed, there is gathering evidence that an obsession with growth may have led us to ignore other aspects of life critical to our well-being. This is where the HPI has a crucial role: pointing us towards a new vision of progress which does not depend on ever increasing growth.