Progress and Economic growth, argues Daniela Kolbe, are never ends in themselves. Under what conditions is growth good for society? And what kind of growth? A well-designed, intelligent indicator won’t resolve any political conflicts, but it will make for a more objective debate.
My home town of Leipzig is the most beautiful city in the world. Lots of greenery, a lively, diverse cultural scene, low rents and a pervading sense of recent history make the city a really great place to live. But I do worry about the level of unemployment. It may be falling, but it is still too high. We need more full-time jobs in Leipzig with proper national insurance cover. Many such jobs could come from service industries such as the booming logistics sector. Leipzig-Halle airport is the main logistics hub for the region, along with the city’s main railway station and direct links to the autobahn network. The airport is permitted to handle night flights, and this together with the logistics companies based here provides work for many people, which gives them an income, social security and a meaningful occupation.
However, some of these jobs are poorly paid and far from secure. And the airport has created problems for people living close to the flight paths for take-offs and landings. Not only have they seen the value of their properties fall, but the constant exposure to high noise levels is causing their health to suffer – not least because of the night flights, which disturb their sleep. So should we see the airport as a progressive project? Or would it be more progressive to shut it down?
There’s no simple answer to this question. “Progress” means different things to different people. It can refer to the individual’s desire for greater economic prosperity and intangible wellbeing. It can also refer to a society’s general belief that more of everything is better. The example of the airport shows that the one-dimensional, non-reflexive definition of “progress” has had its day. The progress we need today is a progress that takes account of human needs. Instead of confronting the individual as an abstract imperative, insisting that we must all “make sacrifices in the name of progress”, it presents itself as a concrete improvement in the individual’s life situation, through and in harmony with a better quality of life for all. New progress in this sense is only worth pursuing as an idea if this dialectic is taken on board and put into productive practice.
Progress and The Role of the Enquete Commission
The Enquete Commission on “Growth, prosperity and quality of life” established by the German Bundestag is charged with translating into the political arena the ongoing debates in society about the conditions and forms of a new social progress. Economic, social and environmental questions all have an equally important role to play here. In the discussions to date it has become clear that a traditional growth trajectory that aims at the unthinking accumulation of money and goods, regardless of the social and ecological consequences, has proved an utter failure, and is no longer capable of commanding a social majority. The global financial and economic crisis, which has now been rekindled in the form of a currency crisis, has undoubtedly brought us more quickly to this realization. At the same time steadily dwindling resources, irreversible climate change and the end of the atomic age, so dramatically brought home to us by the Fukushima disaster, all serve to remind us of the ecological constraints on our present economic system. And all of this feeds into the Commission’s deliberations. In our examination of the factors that affect our future prosperity we are also looking at demographic trends in Germany and Europe. So the discussion about the relationship between growth and prosperity is not some abstract, theoretical debate: it is driven by the very real crises of our time, to which we need to find answers.
For me the really key question is not “Growth – yes or no?”, but “Under what circumstances does what kind of growth lead to more prosperity, a better quality of life and social progress? What exactly is it that we want to see grow?” In other words, the debate about a new kind of progress needs to focus on the conditions that make the attainment of these political goals possible. Economic growth is the means, but it can never be an end in itself. Take for example the level and distribution of incomes. Many studies of human satisfaction suggest that a person’s level of income is by no means the only material, objective basis for measuring subjective satisfaction. How satisfied people are with their lives is influenced much more by the distribution of incomes and wealth within a society. In the light of this it seems very doubtful whether greater inequality is a price worth paying for increased growth. The days when “just inequalities” could be put forward as a political program and to some extent promoted in political practice, not least by Social Democrats, must be consigned firmly to the past. It is time to resurrect, and actively pursue, the political goal of a more equitable distribution of income and wealth.
Intelligent Indicators for Progress
There are other dimensions to prosperity, of course, apart from a fair distribution of incomes. These include work, education, healthcare and participation. Precisely because growth as such is not necessarily a good thing or a bad thing for many of these aspects, we urgently need instruments for measuring prosperity that are both intelligent and transparent. The various dimensions of social prosperity must be documented in an all-encompassing prosperity indicator.
In its efforts to develop such an indicator the Enquete Commission is engaging productively with the international debate on reforming our system of economic reporting. It sees its work as Germany’s contribution to the “Beyond GDP” debate that is now exercising international institutions such as the EU or the OECD, as well as various forums of civil society. There is broad consensus within the Commission on the critique of the shortcomings of GDP, especially where it is misused as a generalized measure of a society’s wellbeing. All the members of the Commission are agreed in principle on the need to develop other indicators of prosperity apart from GDP. The various experts and MPs involved in this exercise are currently engaged in discussions about how to accomplish this in practical terms.
What is clear is that no indicator, however sensitive, can resolve conflicts between competing political goals. The necessary decisions still have to be taken by democratically elected representatives of the people. But an all-encompassing indicator of social progress does allow us to describe the various dimensions of prosperity and quality of life in clear terms, and to see how they relate to one another. In the words of the report of the Stiglitz Commission, appointed at the behest of the French government: “What we measure affects what we do”. True social progress can only be measured by indicators that speak to the real needs of people.
This post is part of the ‘Basic Values Debate’ jointly organised by the Friedrich-Ebert-Stiftung and Social Europe Journal. The German original first appeared in the Fortschrittsforum (translation by Allan Blunden). Read more on the subject: At the limits of Growth: The Promise of New Progress