Prosperity without Growth

Everyone wants prosperity – for themselves and for others. But how do we even gauge how “well off” we are?

In our capitalist culture, we do this by tracking economic growth and evaluating our prosperity in terms of the rate at which our economy is expanding.

Why? Because we believe that the more money or material goods we have, the better off we are.

Alas, economic growth brings along certain problems.

In order to grow the economy, an increase in spending is encouraged at all costs, which ultimately leads to a debt economy. More specifically, sustaining economic growth incurs high levels of national debt (money borrowed by governments) and consumer debt (money borrowed by individuals).

Just think about the rise of consumer debt in the decade before the 2008 financial crisis.

In the UK, for example, consumer debt skyrocketed to unsustainable levels, more than doubling that of the previous decade, as many people borrowed large amounts of money to purchase their own homes and spent beyond their means using credit cards.

Yet if people are encouraged to get into such debt, this puts them under serious pressure should the economy become unstable – which is precisely what occurred after the 2008 crisis. Moreover, those who were hurt most by the collapsing economy were society's poorest, who struggled to pay off the debts they’d racked up.

Furthermore, in times of economic instability, governments borrow massive amounts of money to fund spending and sustain the desired economic growth. For example, following the financial crisis, governments nationalized failing banks, effectively taking on their debts. In the UK, for instance, bailing out the banks resulted in the doubling of the national debt.

And while a certain level of national debt is acceptable, higher levels are incredibly unsustainable.