Economic Growth as a Moral Problem
For millennia, economic history was a flat line. Our conviction that development is the norm is a myth of normalcy: growth as a historical anomaly resulting from a brief slice of history. Daniel Susskind deconstructs this illusion, analyzing the journey from the demographic trap to the era of AI. This article explores how to unleash the power of ideas to save both the planet and social cohesion.
From the Malthusian Trap to the Power of Ideas
For centuries, the Malthusian trap prevailed: demographics offset wage growth. Every technical advancement resulted in population growth, which dragged the standard of living back down to subsistence levels. The breakthrough came with the Solow model, which identified the Solow residual: the elusive engine of productivity—a "gift from outside" that economics long struggled to explain.
It was Paul Romer who proved that ideas drive endogenous growth. Unlike material objects, ideas are non-rivalrous: one "recipe" can serve everyone simultaneously. Joel Mokyr complemented this with the Industrial Enlightenment: science unlocking the potential of machines through the fusion of theory and craftsmanship. It was this unique culture of knowledge-seeking that allowed humanity to make its "Great Escape" from Malthusian stagnation.
The Growth Dilemma and GDP Fetishism
Today, GDP fetishism: a flawed measure of social well-being created for wartime needs, has become a political idol. Susskind describes the growth dilemma: the conflict between GDP and planetary boundaries using a specific logic: growth (P) allows us to avoid poverty (Q), but without change, it leads to catastrophe (R). The solution is not strong vs. weak degrowth—a choice between recession and stagnation. Instead, the author postulates GDP minimalism—treating it as a technical indicator of production rather than a moral compass.
Global approaches to this problem vary by region. North vs. South is a dispute over the right to development: the US bets on technical optimism, Europe on normative constraints, and the Gulf States on escaping resource rents in favor of a knowledge economy. Each of these models seeks a way to maintain prosperity without destroying ecosystems.
Directed Progress and the Role of AI
At the heart of this new vision stands artificial intelligence: a new growth accelerator that could radically lower the costs of discovering new ideas. However, technology itself is not neutral. We need an ethics of growth: strategies for accounting for the costs of progress. Susskind proposes green decoupling and directed progress: policy sets the direction for innovation so that, instead of merely automating labor, it supports climate protection.
We must repay our climate debt: intergenerational justice requires us to use a low discount rate—recognizing that the lives of future generations are worth as much as our own. To ensure these decisions are not merely technocratic, mini-publics: citizens' assemblies save the debate, allowing randomly selected groups to resolve moral dilemmas based on expert knowledge.
Daniel Susskind: Limits and Risks of a New Vision of Growth
Susskind’s proposal carries risks: from technocratic paternalism to an insufficient response to the climate crisis. Is "weak post-growth" enough to stop a catastrophe? The author argues that only steering the trajectory of ideas can prevent a return to poverty. In a world of finite resources, can we direct innovation toward goals higher than GDP? The future depends on whether we define development as quality, not just quantity.
Can we reverse course and direct innovation toward goals higher than just increasing GDP? Or are we destined, in our pursuit of progress, to eternally balance on the edge of catastrophe?
📄 Full analysis available in PDF