On The Subject of Growth

From Tom Lines part of the Occupy Economic Working Group.

Growth has multifarious aspects, some of which are substantially un-resource related. But resources almost always come into it somewhere. Let’s have a look at it. Growth generally refers to increases in gross domestic product (GDP), the great talisman of economic policy, and it all derives from what goes into that statistic. You will have heard of businesses trying to achieve more ‘value-added’: every time they do so they increase GDP a little bit because the market value of production is what GDP measures. It can come from many sources because, in the last analysis, values are essentially subjective.
Take, for example, ready-made meals sold at a supermarket. Being a shop, it classes as part of the ‘service’ economy (as opposed to industry and agriculture). Every supermarket sells things at three or four different ‘value’ levels: a cheap and cheerful version, given some brand name like ‘Basics’, a middling one which might only bear the company’s name, and a more expensive one with a mouth-watering title like ‘Truly Irresistible’. They might also sell one or two ‘niche’ versions, like organic or fairtrade. Now, between the three main value levels there isn’t usually much difference in production costs: maybe a slightly more expensive cut of beef (or horse?) in the little bit that is meat, or the addition of more salt, sugar and fat to make it taste better (and give you a heart attack sooner). But Truly Irresistible might sell for twice the price of Basics. That is classed as extra value, and it is conjured – as our Positive Money friends would say – out of thin air, so it does not make much more call on the earth’s resources. So far so good.
Nevertheless, although retailing is classed as a service, it obviously uses a lot of stuff. The ready meal might require beef; maybe some pasta or spuds to go with it, a lorry to carry it halfway across the country from the company’s warehouse to your shop in Oxford, fuel to keep the air cold in its open-fronted chill cabinet, and so on. So even growth in many ‘service’ sectors is predicated on using or extracting more stuff, i.e. industrial or agricultural production.
Take another example. Suppose you fly to Sydney – or just Birmingham. The flight too is a service as far as GDP is concerned: you don’t eat the plane but you go somewhere in it, and then it takes some more people back to where you came from. But the plane itself was manufactured in Toulouse or Seattle, you go through a couple of airports which someone had to build and then eat a plastic meal or two (if you’re lucky), produced in much the same way as the supermarket’s; meanwhile the plane will spew a lot of nasty stuff into the atmosphere as you go. So growth in this service sector also entails the production, use and emission of stuff.
Let’s put this in proportion, as best I can. I found it quite difficult to find ready historical data, but here goes. Here are the figures over 30 years (1970-2000) for worldwide GDP and the production of a few important commodities from which things are made or energy is generated. As you see, GDP increased by quite a lot more than the commodities, but they still went up a fair amount all the same. The representative data I have found, for the years 1970 and 2000, are:

¹at ‘constant’ 1990 prices, so that inflation doesn’t interfere!

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