In his latest paper titled Sustainability Or Bust: The Sheer Impossibility Of Eternal Compound Growth, Jeremy Grantham argues that focusing on GDP growth is not important.
Even with a declining GDP due to shrinking population and reduced resource consumption, a high quality of life can be achieved through technological advancements and valuing qualitative improvements. Society needs new metrics to measure success beyond GDP.
He also discusses the challenges of a declining population and the potential role of AI. Here’s an excerpt from the paper:
The main point of my thesis is that whether measured GDP is slightly negative or positive is not the major issue.
Overall, measured GDP is likely to shift over the rest of this century from growing, to flat, to slowly declining as labor forces shrink.
Our consumption of fossil fuels and finite metals, and our impacts on the ecosystem and climate, will be falling as they sorely need to.
But if we can still deliver technological advances focused on quality of products and quality of life, rather than on increasing use of physical resources, we will be able to thrive and lead satisfactory, improving lives whether or not population and measured GDP are growing.
But our society and economy will have to learn how to invest in and value qualitative, rather than quantitative, improvements. Along the way we will hopefully develop a more meaningful measuring rod of success than GDP, which is currently more a measure of cost than a measure of quality of life.
The final, sixth paper will look at some of the immediate problems of a population crash on economic and political life, which are now certain to be massively complicated by the rise of AI – introducing as it will new uncertainties and new risks, along with the hope of substantial labor-saving that might offset some of the extreme pressures associated with a declining global labor force.
Further, I will speculate on some of the other problems that will be introduced by such an epic shift away from growth at any price to sensibly living within our long-term limits, and using our brains to maximize and, hopefully, at least slowly increase the quality of life.
You can read the entire paper here:
Sustainability Or Bust: The Sheer Impossibility Of Eternal Compound Growth
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