Doing Business in a Postgrowth Society

Excerpt from James Gustave Speth's article in Harvard Business Review, September 2009

'Corporate leaders by and large seem to assume that economic activity in affluent countries can (indeed, must) continue to expand, the more the better—despite mounting evidence of growth’s negative effects on the environment and much more. They need to get used to the idea of a postgrowth society.

Just as unlimited population expansion is untenable, so is unlimited GDP growth. Yet the open-ended commitment to economic growth persists, and it is now creating more problems than it is solving. It undermines jobs, communities, the environment, a sense of place and continuity, and even mental health. It fuels a ruthless international search for energy and other resources, and it rests on a consumerism that is manufactured by marketers and failing to meet the deepest human needs.

Soon, developed countries will begin the move to a postgrowth world where working life, the natural environment, communities, and the public sector will no longer be sacrificed for the sake of mere GDP growth, and where the illusory promise of ever more expansion will no longer provide an excuse for ignoring compelling social needs. A postgrowth society will involve less consumerism and higher prices; quality of life will improve in ways too long neglected.

The economic crisis is already teaching us to live more simply. Being less focused on getting and spending (in part because there is less to spend) is helping consumers rediscover that the truly important things in life are not at the mall or, in fact, for sale anywhere. Materialism, we now know, is toxic to happiness.

...Of course, it is abundantly clear that even in a postgrowth society, many things do need to grow, such as the number of good jobs; the incomes of the poor; the deployment of climate-friendly and other green technologies; the availability of health care; security against the risks of job displacement, old age, and disability; and investment in public infrastructure and environmental amenity. We need targeted government policies to address such objectives. Of particular importance are policies that temper growth while improving social and environmental well-being—policies establishing, for instance, shorter workweeks and longer vacations; greater labor protections, job security, and benefits; restrictions on advertising; a new design for the twenty-first-century corporation, one that embraces rechartering and stakeholder primacy rather than shareholder primacy; rigorous environmental, health, and consumer protection; greater economic and social equality; heavy spending on public services; and initiatives to address population growth at home and abroad.

...A great imperative countries will face in the years ahead is building a new, sustaining economy. Sustaining people, communities, and nature must henceforth be seen as the core goals of economic activity, not the hoped-for by-products of GDP growth, market success, and modest regulation. The challenge will be to reinvent the economy, not merely restore it.'