Spirituality & Economics: The Meaning of Growth

The Sydney University Evangelical Union, for whom I work, is currently in the midst of a three-week campus mission. Today (Friday August 2, 2013) we held an event called ‘500 Seconds,’ where speakers had 500 seconds to talk about spirituality as it relates to a particular area of life. Here’s my contribution.

In our world, the economy is king. It governs governments, directs our fortunes, makes and breaks our hopes and dreams. Newspapers devote whole sections to it; words like debt and deficit, budget and surplus, inflation and consumer confidence dominate our front pages.

The financial report has become a fixed item on nightly news broadcasts. Political economist Randy Martin observes that

news broadcasts run a visual ticker-tape of stock prices at the bottom of their broadcast screens as if the modulations of equity prices were an EKG to the global body.

Martin, R., Rafferty, M. & Bryan, D., ‘Financialization, Risk and Labour,’ Competition & Change, 12 (2), June 2008, pp. 120–132

But this fixation with markets is more than an intellectual position: it’s spiritual.

In a fascinating investigation of modern capitalism, human geographer Nigel Thrift outlines the convergence between modern economic management paradigms and New Age spirituality.

In the United States $4 billion per year is being spent by corporations on New Age consultants.

Nigel Thrift, Knowing Capitalism, London: SAGE Publications, 2005, p. 42.

At a deeper level, we have a fundamentally spiritual commitment to economic growth. Growth, we’re told, will make poverty history, secure our superannuation and foster democracy around the world, leading to unprecedented and unending wealth for all.

The Sydney Morning Herald’s economics editor, Ross Gittins, sees a spiritual element to our obsession with growth. Each side of politics, he says,

professes to be just as devoted to the Great God GDP as its evil, uncaring opponents.’ While we might differ in our politics, most of us share a common spirituality: we worship growth.

The last thirty years has seen a major change in the contributions of various sectors of the economy to the gross domestic product of Western nations.

Between the 1950s and today we’ve seen the influence of manufacturing diminish as finance has become a key driver of economic growth. This accelerated from the mid-1970s. In Australia, the financial services sector has grown from 6% of GDP in 1975 to 10.5% in 2011. At the same time the manufacturing sector has fallen from 16% of GDP to 8%.

Australian Financial Sector as Percentage of GDP, 1975-2011 | Source: http://www.datadiary.com.au/2011/08/02/australias-economy-whats-driving-gdp/

Australian Financial Sector as Percentage of GDP, 1975-2011 | Source: http://www.datadiary.com.au/2011/08/02/australias-economy-whats-driving-gdp/

Australian Manufacturing Sector as Percentage of GDP, 1975-2011 | Source: http://www.datadiary.com.au/2011/08/02/australias-economy-whats-driving-gdp/

Australian Manufacturing Sector as Percentage of GDP, 1975-2011 | Source: http://www.datadiary.com.au/2011/08/02/australias-economy-whats-driving-gdp/

This shift is the result of reaching the limits of the growth that is possible on the basis of the material resources available to us.

As a result, the rate of economic growth in the West has been declining. During the 1960s the GDP of the developed world grew at a rate in excess of 4% per annum, and sometimes by as much as 6%. By the 1980s the GDP of developed nations had fallen to 3% per annum, and had fallen further to 2% per annum by the early 1990s.

Developing World GDP 1960-2010 | Source: https://en.wikipedia.org/wiki/Economic_growth

Developing World GDP 1960-2010 | Source: https://en.wikipedia.org/wiki/Economic_growth

The solution, according to some economists, is to separate economic growth from the use of material resources. This is called decoupling.

This in turn has led to a process of financialization, in which every value is turned into a financial instrument. Stock market trading increasingly involves buying and selling intangible financial assets like mortgage debts and insurance contracts. This generates huge profits without generating actual value—the money made only exists on a balance sheet.

In the words of Naomi Klein, as more and more companies have made money through trading financial products

Companies have gone on to rid themselves of their cumbersome bodies, and there is nothing more cumbersome, more loathsomely corporeal, than the factories that produce their products.

We’re pursuing continuous growth by detaching it from the material world.

Christian theologian William Cavanaugh agrees. Reflecting on the GFC of 2007-2008, he argues that

‘The financial crisis was not driven by materialism so much as by a desire to transcend material constraints.’

Our worship of growth is a spiritual aspiration to be free from the material world.

I have a different spiritual aspiration. I’m a Christian. My spirituality is shaped by the Christian story. This story leads me to conclude not that modern economics is too materialistic, but that it isn’t materialistic enough.

God made the world—that includes us.

Because he is good, what he made is good.

He made it all as a gift—for his Son and for us.

We are all recipients of the gift, but we’ve forgotten the giver who gave it.

In order to restore us to the giver, God became a human being in Jesus Christ. The eternal and infinite creator of the universe became material—he was an embryo, he experienced birth, he was a little boy who grew into a man.

That man was executed as an outcast, dying the death that was necessary for us creatures to be restored to the giver.

That same man rose from the grave in a new material body—and those who have faith in him hope one day to share in a resurrection just like his.

My spirituality, shaped by this story, isn’t interested in transcending the world. My spiritual aspiration is to give and receive as part of it. I share in the goodness of the world God has made. I revel in the material world, knowing that God was satisfied to become a part of it in Jesus.

For the Christian, the spiritual and the material aren’t at odds; spirituality is materialistic in the fullest sense of the world.

This spiritual aspiration moves me to cultivating contentment and community.

I cultivate contentment because God has given us the world to enjoy and to sustain us. I have shelter, I have food, I have work—all of these are gifts from God, and they are all I need.

But this contentment is only possible in community. God has given us this world, and it can sustain us—if only we’ll share its abundance with one another.

800 million people will go hungry today. There’s enough food in the world to feed them. The problem isn’t that global economic growth has slowed, but that in our rush to transcend our material constraints we’ve forgotten how to share.

Christian spirituality leads us to cultivate community by working to share with others the good gifts we have received from God.

Applying this kind of spiritual economics on a global scale is a complicated proposal. I think it should encourage us to consider what economists call a steady state economy, in which GDP stays at a sustainable level relative to the population, instead of growing.

After all, some of the great economists including Adam Smith, John Stuart Mill and John Keynes saw growth as a temporary phase on the way to a world in which basic needs would be provided for and humans could focus on more important things. In his Principles of Political Economy, John Stuart Mill wrote:

The increase of wealth is not boundless. The end of growth leads to a stationary state. The stationary state of capital and wealth… would be a very considerable improvement on our present condition. … A stationary condition of capital and population implies no stationary state of human improvement. There would be as much scope as ever for all kinds of mental culture, and moral and social progress; as much room for improving the art of living, and much more likelihood of it being improved, when minds ceased to be engrossed by the art of getting on.

But however it might shape the global economy, our spirituality can shape our every day economic practices in the here and now.

How might contentment & community shape your economic relationships with your family? With the local grocer? With that homeless woman you walk past? With the farmers who produce your food? With the land that food comes from?

Whatever spirituality is for you, economics is a spiritual discipline. So when we think about econmics we need to ask ourselves what our spiritual aspirations are, and how they might shape our economics.

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6 thoughts on “Spirituality & Economics: The Meaning of Growth

  1. Reminds me of the Greens – very good in places and not so much in others 😉 Attempting to be brief:

    The solution, according to some economists, is to separate economic growth from the use of material resources. This is called decoupling.

    This in turn has led to a process of financialization, in which every value is turned into a financial instrument

    Financialization can be a subset of decoupling, although decoupling implies economic growth while the level of financialization we see in the West today on net reduces gross global product – rather than improving the efficiency of the distribution of capital, it seems more plausible the financial sector at the margin is in effect capturing massive rents from the rest of the productive economy,

    Furthermore, the desirable kind of decoupling does not involve the financial sector – there are great many intangible assets outside of credit default swaps.

    Stock market trading increasingly involves buying and selling intangible financial assets like mortgage debts and insurance contracts.

    You’ve managed to pick two of the closest-to-tangible widely traded financial assets there is. In fact I’d argue that both are more tangible than the stocks which are (and always have been) what is actually traded on stock markets 😛

    For the Christian, the spiritual and the material aren’t at odds; spirituality is materialistic in the fullest sense of the world.

    This, I love. And its nice to be reminded this is by no means an unorthodox interpretation of Christianity’s relationship to the material.

    I have a different spiritual aspiration. I’m a Christian. My spirituality is shaped by the Christian story. This story leads me to conclude not that modern economics is too materialistic, but that it isn’t materialistic enough.

    And that’s a particularly cute subversion of the reader’s expectations.

    800 million people will go hungry today. There’s enough food in the world to feed them. The problem isn’t that global economic growth has slowed, but that in our rush to transcend our material constraints we’ve forgotten how to share.

    The first two sentences are on the money, but in the last the second clause I think betrays a pretty poorly founded chronology. I would date humans “forgetting how to share” – other than with immediate friends and family that is – to some time in one of those pretty early chapters of Genesis…… (which isn’t to say modern capitalism isn’t making our eternal and abhorrent selfishness even worse.)

    .I think it should encourage us to consider what economists call a steady state economy, in which GDP stays at a sustainable level relative to the population, instead of growing.

    .

    Despite otherwise intelligent people (even of the mostly very economically literate variety) frequently proposing this idea, it is nuts. Truly, its a laughably bad concept.

    Here are some things that add to GDP[1] and therefore have to be eliminated – or else continually balanced by falls to GDP elsewhere – in order for it to reach a steady state:

    New books. New songs. New computer programs. New films. New scientific discoveries.

    Basically, any idea that has possible economic value.

    Which brings us back to the point about decoupling, and there being intangible assets outside of finance…. which I think is the heart of why I feel your argument falls down.

    ~~~~

    [1]Fuller explanation with technical details available on request..

    P.S. Campos? 🙂

    • Jordan, thanks. I agree with you, mostly; I picked easy-to-understand-at-a-glance examples because I was speaking to people who mostly weren’t economists, so if I was writing for a journal on an economics site I would have been more nuanced and used more effective examples! Especially as regards decoupling: the concept is used in a variety of ways in different contexts.

      As for steady-state economies, though, I don’t think your critique really has legs. The reason I think this is that GDP measures what we want it to measure, and ‘possible economic value’ is not the same as actual profit. Maybe the way I described steady-state economics in relation to GDP was therefore unhelpful. Really, I think, what we need in the developed world is a decrease in our standard of living.

      • hi Richard & friend! Nice talk/post. I agree that the strongest part is your really nice argument against a spiritual-material dichotomy (which personally I think is one of the biggest problems with Sydney Anglican orthodoxy, or at least what I was taught under that guise).

        I’m not convinced about steady-state economics either, though. I certainly can’t see how it would be compatible with capitalism, so we’re talking about some pretty radical social change (which I am on board with!). Even then not quite sure how it would work. But I like the questions in your second-last paragraph, they are definitely going in the right direction. I like to think of it as a call for a politics that tries to decommodify as much stuff as possible. i.e. remove from the logic of the capitalist market. I’m not sure that equates to a decrease in our standard of living. To me, it’s about a change in what we prioritise, our qualitative definition of a high standard of living. As a slogan, something like: living better, not having more stuff. I would want to see high standards of health care, education, hygiene etc – and I want to see that everywhere. We do need to somehow redirect resources away from financial speculation, for example, and into the things that actually improve our quality of life, rather than undermine it, commodify things we value, etc.

  2. Hey Bron, thanks for joining the conversation!

    Again, I’ve not been comprehensive, and the reason was my audience. A big part of the question is redefining what ‘standard of living’ includes. It’s usually measured using GDP these days; but GDP measures essentially arbitrary things, excluding, for example, women’s work in the home and childrearing – certainly economically significant activities.

    When I talk about steady-state economics and decreasing our standard of living, my chief target is consumerism and dislocation from the earth. I think, in the West, we need to see less of our disposable income spent on consumer goods and purchase food less through supermarkets. We need to grow more of our own food and purchase what we don’t / can’t grow from as-local-as-possible farmers, with whom we actually have a relationship (be it economic or personal) not mediated by corporations. Health care, yes! Education, yes! But we need to decommodify them. They’re not produced to buy and sell in a market (with apologies to Karl Polanyi).

    • cool, thanks for clarifying. yay, excellent agenda!! count me in!!

      PS I’m sure I’ve said this before but I just love your blog title. It’s a great Nick Cave lyric, and put to excellent use.

      • Why thanks! I’ve often thought about changing it… I’m not sure it means anything to most people. But then, not many are Nick Cave fans, since no one is perfect… 😉

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