By: Lorenzo Fioramonti
The election of Donald Trump might have come as a cold shower but it was to be expected in a world that’s increasingly frustrated with a profit-obsessed globalised economy. Not only have jobs been lost and inequalities increased, but the exploitation of natural resources and the conflicts it fuels have triggered a massive exodus of refugees and economic migrants. These developments are threatening to tear entire societies apart. Wealth has amassed at the top, in ever fewer hands.
Against this backdrop, Trump’s promise of protectionism has found appeal among many people marginalised by neo-liberal globalisation. The paradox is that Trump himself is a staunch capitalist, who has massively benefited from the globalised economy he claims to oppose.
While the popular sentiments that gave rise to Trump are understandable, the solutions offered are damaging to the very people whose interests they claim to promote. Yes, we need to challenge economic globalisation but not to build walls and segregate societies.
To the contrary, we need more integration and co-operation. We need a system that levels the playing field between the big corporations benefiting from globalisation and the many small businesses and workers who have lost out. In a word, we need a new economic system that pursues social well-being rather than growth. In my new book, The World After GDP: Economics, Politics and International Relations in the Post-Growth Era, I argue that this shift is only possible if we recognise that our obsession with global economic growth is the source of many tensions societies face.
Our model of growth, represen-ted by the gross domestic product (GDP), has portrayed globalised markets as the driving force of prosperity. It’s also pushed for increased production at all costs.
As a result, industrial value chains have shifted to the Far East, with corporations taking advantage of the cheaper local workforce. This has triggered resentment among workers elsewhere and generated a massive ecological degradation.
The 2008 collapse was a wake-up call. But apparently it wasn’t loud enough if we consider that both former US president Barack Obama and incumbent Trump have filled their governments with investment bankers.
The quest for growth has destroyed informal economic systems, which are a critical safety net for many, and replaced them with formal market activities, which benefit a few.
It’s created incentives for economies of scale leading to the supremacy of big companies. It favours competition over co-operation, portrays the exploitation of nature as progress and reduced citizens to consumers.
We have seen this madness playing out in Africa too, where the "Africa rising" mantra has been used as an excuse to accelerate the exploitation of people and nature, while presenting it as a successful development story. The good news is that the international community is ready to shift to a post-GDP idea of prosperity. I believe this is a crucial opportunity to turn the global economy upside down.
Many calls have been made by institutions, from the UN to the World Economic Forum, for a shift to a new definition of prosperity.
This points to a focus on inclusivity and sustainability, rewarding countries and companies that increase well-being and punishing those that undermine it (often because they are hooked on growth). And the Sustainable Development Goals could offer the much-needed entry point to change the rules of the game.
Indeed, when the social and environmental costs of growth are taken into account, a completely different picture of development emerges. Take India and China, the two rising stars of the growth ideology. They are expected to spend hundreds of billions of dollars annually to address the crises generated by pollution, contamination and social inequality. These costs are conveniently disregarded by GDP, but they are real and hefty.
A UN-sponsored study shows some of the largest multinational corporations, from the fossil fuel sector to mining and intensive food production, are responsible for more damage to society and the environment than the revenues they generate.
With a post-GDP framework, it becomes evident that global trade bears more costs than gains because of its impact on the environment and society. We should rather pursue regional trade systems empowering communities to build equitable and sustainable local economies. Renewable energy becomes a no-brainer as profitable, cheap and empowering.
A post-growth strategy would result in putting people and their ecosystems at the centre of development policy. This would help the building of a different economy from the bottom up. The outcomes would include creating decent jobs. By moving beyond growth, we can escape the anachronistic and simplistic solutions represented by Trump.
Lorenzo Fioramonti is author of The World After GDP: Economics, Politics and International Relations in the Post-Growth Era