Growth doesn't just mean using more resources. It also means using less

If you can do something for one ten-thousandth the cost it used to be, you'll feel pretty rich.

The Atlantic's Noah Smith has written on whether capitalism actually does require growth to continue. He argues:

Looking at history, we see that the biggest challenges to capitalism actually came during times of rapid growth. The early 20th Century was the heyday of communism, anarchism, and socialism. But this was a time of immense growth, technological progress, and increased material standards of living. It seems possible that those alternatives to capitalism gained popularity precisely because rapid growth disrupted the stable social systems that had been in place before the Industrial Revolution.

Clearly there's something problematic in that analysis; the "stable social systems" in place before the Industrial Revolution had very little in common with capitalism as we know it today. It may well be the case that the age the joint-stock company didn't require growth in the same way that modern financial capitalism does.

Smith does, however, argue that finance doesn't require growth either, because interest comes not just from an expectation of growth but also the value of consumption smoothing. That is, people will put up with having less money in the future in order to have income now, and interest is a reflection of that.

But the whole argument is rather a moot point, either way, because it's so frequently brought up in the context of a second claim: that growth requires exploitation of resources, and that if we desire an economy which doesn't carry on tearing up the planet, we need to accept that that economy will be "steady state".

There is clearly a grain of truth here. Famously, the history of America can be described, in economic terms, as a country continually dealing with financial issues by physically growing; first expanding south, then west, and then eventually overseas in the form of the pseudo-protectorates the US now runs. And an end to resource extraction would definitely hit growth rates enormously, if for no other reason than that it would require the world's economy to be completely retooled around renewable energy and recycling usable material from waste, which wouldn't happen painlessly.

But it's simply not true to say that growth can only come from increased abuse of the environment. My favourite illustration of the falsehood comes from a two-year-old piece by Alexis Madrigal:

Imagine you've got a shiny computer that is identical to a Macbook Air, except that it has the energy efficiency of a machine from 20 years ago. That computer would use so much power that you'd get a mere 2.5 seconds of battery life out of the Air's 50 watt-hour battery instead of the seven hours that the Air actually gets. That is to say, you'd need 10,000 Air batteries to run our hypothetical machine for seven hours. There's no way you'd fit a beast like that into a slim mailing envelope.

That, right there, is growth. For the energy cost of running one laptop twenty years ago, you can now run 10,000. That's an annual growth rate of just under 60 per cent.

Clearly, energy efficiency in portable computers over the last 20 years is one of the most rapid measurable increases in technology ever, but nonetheless, it puts paid to the idea that all growth can be is increasingly extractive.

We should be planning for an economy which takes only memories and leaves only footprints — but that's not the same as planning for an economy with no growth. Though George Osborne might wish to convince you otherwise, that would be an unnecessary disaster for all concerned.

Some MacBook Airs, engaged in naughtiness. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty
Show Hide image

Seven things we learnt from the Battle for Number 10

Jeremy Corbyn emerged the better as he and Theresa May faced a live studio audience and Jeremy Paxman. 

1. Jeremy Corbyn is a natural performer

The Labour leader put in a bravura performance in both the audience Q&A and in his tussle with Jeremy Paxman. He is often uncomfortable at Prime Minister’s Questions but outside of the Commons chamber he has the confidence of a veteran of countless panels, televised discussions and hustings.

If, like me, you watched him at more hustings in the Labour leadership contests of 2015 and 2016 than you care to count, this performance wasn’t a surprise. Corbyn has been doing this for a long time and it showed.

2. And he’s improving all the time

Jeremy Corbyn isn’t quite perfect in this format, however. He has a temper and is prone to the odd flash of irritation that looks bad on television in particular. None of the four candidates he has faced for the Labour leadership – not Yvette Cooper, not Andy Burnham, not Liz Kendall and not Owen Smith – have managed to get under his skin, but when an interviewer has done so, the results have never been pretty for the Labour leader.

The big fear going into tonight for Corbyn was that his temper would get the better of him. But he remained serene in the fact of Paxman’s attempts to rile him until quite close to the end. By that point, Paxman’s frequent interruptions meant that the studio audience, at least, was firmly on Corbyn’s side.

3. Theresa May was wise to swerve the debates

On Jeremy Corbyn’s performance, this validated Theresa May’s decision not to face him directly. He was fluent and assured, she was nervous and warbly.  It was a misstep even to agree to this event. Anyone who decides their vote as far as TV performances tonight will opt for Jeremy Corbyn, there’s no doubt of that.

But if she does make it back to Downing Street it will, in part, be because in one of the few good moves of her campaign she chose to avoid debating Corbyn directly.

4.…but she found a way to survive

Theresa May’s social care U-Turn and her misfiring campaign mean that the voters don’t love her as they once did. But she found an alternate route through the audience Q&A, smothering the audience with grimly dull answers that mostly bored the dissent out of listeners.

5. Theresa May’s manifesto has damaged her. The only question is how badly

It’s undeniable now that Theresa May’s election campaign has been a failure, but we still don’t know the extent of the failure. It may be that she manages to win a big majority by running against Jeremy Corbyn. She will be powerful as far as votes in the House of Commons but she will never again be seen as the electoral asset she once was at Westminster.

It could be that she ends up with a small majority in which case she may not last very much longer at Downing Street. And it could be that Jeremy Corbyn ends up defeating her on 8 June.

That the audience openly laughed when she talked of costings in her manifesto felt like the creaking of a rope bridge over a perilous ravine. Her path may well hold until 8 June, but you wouldn’t want to be in her shoes yourself and no-one would bet on the Conservative Party risking a repeat of the trip in 2022, no matter what happens in two weeks’ time.

6. Jeremy Paxman had a patchy night but can still pack a punch

If Jeremy Paxman ever does produce a collected Greatest Hits, this performance is unlikely to make the boxset. He tried and failed to rouse Jeremy Corbyn into anger and succeeded only in making the audience side with the Labour leader. So committed was he to cutting across Theresa May that he interrupted her while making a mistake.

He did, however, do a better job of damaging Theresa May than he did Jeremy Corbyn.  But not much better.

7. Theresa May may have opposed Brexit, but now she needs it to save her

It’s not a good sign for the sitting Prime Minister that the audience laughed at many of her statements. She had only one reliable set of applause lines: her commitment to getting the best Brexit deal.

In a supreme irony, the woman who opposed a Leave vote now needs the election to be a referendum re-run if she is to secure the big majority she dreams of. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

0800 7318496