Where does ‘growth’ fit between purpose and profit?

“Growth” is one of those words that I have been preoccupied with for a while, both in economic terms, given my previous life as a journalist (and having read political economy); but the concept is also fascinating given its widespread use also in the context of “personal growth” - it seems to me that “growth” itself has been suffering its own “growth” moment in recent decades and so I was intrigued to hear Dr Daniel Susskind wrote a new book on this very topic! 

I was thrilled he accepted to be interviewed for this newsletter, especially against the backdrop of a looming general election and the mood music of continuing economic uncertainty. Daniel’s new book, Growth: A Reckoning, couldn’t have been timelier!

What price economic growth? A talk with Dr Daniel Susskind

Dr Susskind is a Research Professor in Economics at King’s College London, a Senior Research Associate at the Institute for Ethics in AI at Oxford University, and an Associate Member of the Economics Department at Oxford University. 

Growth: A Reckoning, is his most recent book and in it he explores what he calls the “growth dilemma”: over the past two centuries, economic growth has freed billions from poverty and made our lives far healthier and longer, and yet this prosperity has come at an enormous price – deepening inequalities, destabilising technologies, environmental destruction and climate change. 

Resolving this dilemma, he argues, is the urgent task of our age. In our discussion, Dr Susskind shares what he hopes policymakers will learn from his book, and how founders and business leaders can balance financial growth whilst meeting their ESG demands.

What inspired you to write this book?

The fact that economic growth is one of our most important, but also one of our most dangerous, ideas. There are very few things that all politicians agree upon at the moment, but one of them is that we need more economic growth. 

In the UK, public services are backlogged and broken. Worklessness and poverty are rising; average real wages, the best measure of our collective prosperity, have basically been stagnant for fifteen years. We therefore desperately need more growth, and part of the book is about how we achieve this.

Fiendishly difficult to solve though this problem is, it also poses a moral and ethical conundrum because economic growth is associated with many of the greatest challenges that we face – it has profound implications in terms of climate change and the level of inequality in society; it encourages us to develop technologies like AI, whose disruptive impacts on work and politics it's not clear we can properly control; and it also deeply affects local communities and places.

In other words, there is an inherent tension between the extraordinary promise of growth, which is associated with almost every measure of human flourishing, and the equally remarkable price we and our planet have to pay for growth. I call this the growth dilemma, and resolving it is one of the great challenges that we face.

What might this resolution entail?

In essence, the question is how to chart a path between those who say that we ought to just keep on pursuing ever more growth because of its extraordinary promise, and those that believe that the price is too high and that we need to either pause the economy or even go into reverse. 

The latter group of people form the so-called degrowth movement, which began among a small group of relatively obscure academics, but is now an increasingly popular idea espoused by politicians like Caroline Lucas, environmentalists such as David Attenborough and activists like Greta Thunberg.

The issue is that when you course-correct too aggressively in order to mitigate against the problems associated with growth, you then often exacerbate the problems that accompany a lack of growth. The solution is not about pursuing more or less growth, and trying to find the right balance between those two paths, but far more about doing everything in our power to change the nature of growth that unfolds. And we might do that is what the book is all about. 

Your book includes a potted history of growth. Can you tell us a little about this?

The history of growth is an interest of mine and something I used to teach about at the University of Oxford. It’s a topic full of interesting mysteries and puzzles. One instance is the fact that growth is an extraordinarily recent phenomenon. Whether you were a hunter gatherer in the Stone Age, or a labourer working in the late 18th century, you would have lived roughly the same economic life stuck in a struggle for subsistence. Growth only began a couple of 100 years ago.

It's also very mysterious. Despite its extraordinary importance, and despite the confidence with which politicians talk about the pursuit of growth, the causes of growth still constitute one of the great puzzles in economics.

It's also just amazing to me that before 1950, almost no politicians, policymakers, economists or anyone was talking about the idea of growth. It feels like it's an idea that must have been around for a long time, as GDP sits at the centre of our kind of common lives together. And yet the idea that we might chase after GDP is an incredibly recent, modern idea.

In the UK, we are on the cusp of a general election. What do you hope policymakers will take away from your book?

The timing is certainly interesting – Growth: A Reckoning was featured on the Financial Times’ list of books to read before the election because this is one of the most important challenges facing the country and the book provides lots of practical ideas. I started my career in the British government, first in the Prime Minister's Strategy Unit and then in the Policy Unit at 10 Downing Street, and have therefore always been just as interested in finding practical solutions to these issues as in the theoretical underpinnings of the ideas themselves.

However, if I had to pick one takeaway from the book, it would be a mindset for how to think about growth. When many politicians and policymakers talk about growth, they have quite an old-fashioned view of growth in mind. They think of growth as being driven by doing big, impressive things in the material world, things that we can see and touch: infrastructure projects such as building bridges, tunnels, roads and railways, for example. But one of the most important arguments of the book is that this isn't actually where growth comes from. Growth doesn't come from building impressive things in the material world, but from the intangible world of ideas that we can't see and touch.

By this, I mean recipes or instructions for making ever-more productive use of the finite resources that we have. And so what I'd encourage politicians and policymakers to do is to turn away from this emphasis on the material world and focus instead on how we become the sort of economy and the sort of society that generates more useful ideas about the world.

Can you please give some examples of the kinds of ideas you have in mind?

As I explain in the book, we need to invest vastly more in research and development. We cannot expect a steady stream of new ideas about the world unless we invest in their discovery. We need to reform the pretty antiquated intellectual property regime. We also need to encourage more people into the parts of the economy that are responsible for generating ideas. 

And then I've also got some more radical thoughts on how we can use technology itself to help us generate ideas. But fundamentally, it’s about moving from thinking that growth comes from the world we can see and touch, to recognising that growth in fact comes from the discovery of ideas.

What would your advice be to SMEs, founders and individual employers trying to balance the demands of meeting ever more stringent ESG goals with their desire to grow their business and make a profit?

It's a really interesting question. The book is about growth in the economy as a whole, and is written with politicians, policymakers and citizens in mind. And it's about the trade-off between growing more and more as a national economy and protecting and improving those other things that we value, whether it's the environment we live in, the level of inequality in society, the impact that AI technologies have on work and politics, and so on. 

But there is clearly a really important parallel between the arguments I'm making about the challenges that politicians and policymakers face when trying to steer the economy, and the hurdles business leaders and entrepreneurs find themselves confronted with when managing individual companies. I have two thoughts to highlight in this context.

The first thought has to do with the subtitle of my book, “A Reckoning”, which is a reference to the suggestion that there is a trade-off between the pursuit of growth and the protection of these other things that we care about. One of the arguments I am trying to make is that, in many cases, this is a fallacy, and that we can in fact pursue growth and protect the things we cherish – and that this is as true for a national economy as it is for an individual business. There are ways of pursuing profitability while also meeting ESG responsibilities, for example. My book includes numerous examples of how this can be achieved.

However, the second thought is that it would be naive to claim that the above holds true in all instances. In the global economy, there are obviously times when there is a trade-off between pursuing ever more GDP growth and protecting other things that we care about, and the same holds true in the individual company setting, where there will sometimes be an inherent tension between profitability and meeting ESG commitments, for example. 

One of the very difficult things that business leaders have to do is to be honest with themselves about the contexts in which this trade-off occurs. What they cannot afford to do is engage in ‘cakeism’, i.e. pretend that they can have it all without having to make sacrifices on either side of the equation. 

Having to make a choice between profit and protecting the environment and society is sometimes inevitable. And confronting those hard trade-offs and being honest about them is an important task not just for policymakers and politicians, but also for individual business leaders.

***

Having chosen to get Obelisk Support | B Corp Certified certified as a B corporation, I was acutely aware that my philosophy of business growth, at least, was focused on wanting to balance purpose, profit with an eye on sustainable growth rather than short-term. This realignment in our pursuit for growth is a milestone we reached and it is so interestingly explored by Daniel and very much hope you have enjoyed reading more about his latest book. 

[Note to the legal world, in which he is probably best known as the co-author of the best-selling book, The Future of the Professions (2015), which he published with Prof. Richard Susskind. He is also author of A World Without Work (2020), described by The New York Times as "required reading for any potential presidential candidate thinking about the economy of the future”. His TED Talk, on the future of work, has been viewed more than 1.6 million times.]

This month, I am excited about…

… Next 100 Years is shifting up a few gears as we are readying ourselves of our busiest time of the year. I am especially excited about our fifth Heilborn Lecture which this year will feature the star that is Flora Page ! She will be addressing the theme of “home”. Flora is a barrister at 23ES Chambers who prosecutes and defends serious crimes. She played a pivotal role in overturning Post Office convictions in Hamilton and others. Currently, she represents 16 former Post Office workers in the Post Office Horizon IT Inquiry, including Teju Adedayo, Lee Castleton, Tracy Felstead, Seema Misra, and Janet Skinner. “No Choice but to Trust – The Predicament of the Powerless” is the title of the lecture which will take place on 19 November 2024 at the Arts Workers Guild in London.

This is an even more special edition of our lecture, as 2024 marks 75 years since Rose Heilbron, the inspiration behind the lecture series, took silk - the first woman King’s Counsel in England and Wales alongside Helena Normanton. 

We founded our public lecture series in 2020 to champion female experts in the legal profession by giving them a platform to deliver thought-provoking lectures that shape the debate on topical legal issues. We also hope to thereby counter the often male-dominated lecture circuit. Each year our lecture focuses on a different topical theme - from freedom, nature, value or, in 2024, “home”. 

Click here to reserve your place for this year’s edition.

All proceeds support Spark21 to power the Next 100 Years campaign.