Tune to any news channel and you’re bound to hear the question: Is the United States in a recession? Two consecutive quarters of a negative gross domestic product is, by definition, a recession and the consequences of surviving such a fate are predicted by economists to be dire.
The concept of an economic recession is based on the widely accepted economic principle that continued growth as measured by GDP is the only road to wealth and progress. Economists would have us believe that if Americans continue to work themselves to death producing “goods,” “consume” endless amounts of useless and short-lived goods, and increase the “productive” population while decreasing the numbers of the “unproductive” population, everyone will benefit from the rising tide. While this formula may work for undeveloped areas of the world, maybe it’s time to rethink the impact of constant growth on our own country.
In the July 17 New York Times Magazine, 84-year-old economist Herman Daly, emeritus professor at the University of Maryland School of Public Policy, explained his principle of a steady state economy. He argues that constant growth has created a culture in which the costs of growth exceed its benefits. Take as costs, for example, increasing destructive storms due to climate change or difficulties feeding an exploding population or needless deaths due to easily available powerful weapons in the hands of the mentally ill or all-powerful autocrats. Daly proposes replacing GDP with the Index of Sustainable Economic Welfare, which makes use of both the negative and positive values behind economic activity to calculate the state of our economy.
According to the 2019 Federal Reserve Survey of Consumer Finance, the amount of wealth available in the U.S. that year equated to an average net worth of $748,800 per American household. As it is, the top 10% of households own 76% of all wealth in the U.S., while the bottom 50% of households own just 1%. Our problem is not lack of productivity or lack of wealth but faulty distribution of wealth.
I’m not against wealth. As singer Tina Turner said, “I’ve been poor and I’ve been rich, and rich is better.” But definitions matter. Does anyone really need $60-plus billion dollars to be considered rich? Does anyone really deserve to live a life of penury, lack, disrespect and worry? Rich should mean meeting basic security and nutritional needs, while living a “rich” life of loving relationships and the enriching use of talents.
In the steady state economy that Daly proposes, the rich countries of the world would cut back on excess consumption, not constantly feed a steady desire for more stuff. During the COVID-19 lockdown, the U.S. population dutifully sat at their computers, ordering more and more goods, which are now piling up in retail warehouses awaiting their place in landfills. We should look to Dante’s wisdom as expressed in The Divine Comedy: All humanity is full of desire; what gets us in trouble (Inferno) is choosing the wrong objects of our desire. When do we start to value life-affirming riches over consumer goods?
Read Daly’s stimulating interview and think about it. It might prompt you to clean out your garage so you can park your car. It might prompt us all to think of our grandchildren and aim for a steady state economy versus constantly feeding GDP by producing more and more stuff. It might help us look to a future of peace and security for all Americans, not just the top 10%.
Katherine Burgess is a retired Pueblo Community College instructor of history, ethics and humanities.