Living in a post-growth world
Economic growth is a hell of a drug. But what do you do when the well's run dry?
The American economic system is built around the assumption of growth. Our unofficial motto regarding the economy is If it ain't growin', it must be dyin'! Policy makers will jump through any hoops necessary to protect and ensure growth. Focusing on economic growth has been the American way since its founding, especially so in the decades after World War II. It's served (at least some of) us well. But there's one big problem with this model: the era of assumed economic growth is coming to an end.
At the end of World War II, America made the best deal in the history of deals. We told the rest of the world we'd protect the seas and enable trade routes on one condition: the rest of the world had to participate in our economic system. This proposal created the ultimate win-win scenario. The rest of the world got protected access to otherwise unavailable markets, and America got more of that international cold, hard cash. And, for 80 years or so, the world order was relatively stable, at least in comparison to the majority of world history.
But all good things must come to an end, and so here we find ourselves in a post-COVID world, as America is withdrawing from the world and isolating. Why are we doing this? Put simply, the world has gotten old. Baby Boomers are retiring and we don't have enough young people to replace them. Old people don't produce and they don't consume at the same levels of young people. Old people instead sit in their retirement homes and clip coupons until it's time for Senior Hour at the local Country Kitchen Buffet and then they scoot back home for bingo.
Building an economy around old people is a recipe for disaster. So, America is saying 'Bye Felicia' from the rest of the world and working to GTFO. Maybe I wouldn't worry if I saw an alternate path. But growth is all we know. And we're like that guy in the VIP section of the nightclub rising his head from the table, his nostrils and upper lip crusted with white dust, as we cry What do you mean there's no more coke!?
We don't appear to have a Plan B because we still talk about the economy in terms of growth. If we had another model of economic success, we'd have started using it by now—ya know, for the vibes.
A post-growth world means less opportunity to go around. What does this mean for those already struggling? And what happens when people unfamiliar with struggling now have no other choice? If you want to keep societies from rebelling and calling for heads to roll, your best bet is to give them everything they need to prosper economically. But what do you do when that's no longer possible?
Every generation following the Baby Boomers has had to live in the shadow of Boomer expectations: get your diploma, get a job, bust your ass, prosper. The Boomer formula for success may have served a person well in 1965, but not so much in the 21st century. The game has changed and the goal posts are constantly moving with each financial crisis or recession, which brings me back to my main point: we must stop measuring success in terms of the old economy. The days of effectively 0% interest rates and assumed economic growth are over. Also, we failed to invest in critical infrastructure in the best of times because we were too busy chasing down that metaphorical economic cocaine; I doubt we'll start investing in infrastructure now when capital is more costly with less return.
So what follows? What do we replace the old economic model with? How do we define and measure success going forward?
I won't pretend to have the answer. I wish only we knew the powers that be were asking the same questions rather than focusing on chasing outdated metrics, which doesn't feel like a SMART goal to me.
Jake LaCaze tries to play it cool, but these are the kinds of thoughts that keep him up at night.
