An economy not dependent on growth

An economy not dependent on growth - 

Is there such a thing?

According to the dictionary, economy doesn't mean growth, it's defined as 1. the wealth and resources of a country or region, esp. in terms of the production and consumption of goods and services. 2.  careful  management of available resources.  The word originated in the 15th century. So when did everything become defined as 'growth', as in good economy (lots of growth) or bad economy (no growth)?

Having not been trained in economics, I can't answer from an historical perspective but present times indicate that economy is at least evaluated according to growth and it looks like we're heading into 'zero growth', ( See frozen in the north in the National Post), so what will that mean for Canada's economy and can social finance, as an alternative economy, present a positive option even though it too relies on growth?

There is a factor in all this that few discuss but it is the determinant in my opinion - with the largest population of consumers,  'boomers' aging out, how in the world can we continue to rely on growth? If your biggest pot shrinks to less, what would be the point of producing more? This was predicted in Boom, Bust and Echo by David K. Foot and Daniel Stoffman back in 1996. 

"Older people tend to have lower incomes, their consumption tends to be lower and in that sense, consumer- spending growth would be weaker as well," said Moody’s Faucher. "There will be fewer people in prime car-buying years," and "recreational goods and services are a young-adult thing."

If you take into account the emphasis on the environment, you can guarantee zero growth for cars (almost true) and who can afford a cottage or a boat or even a sea-doo anymore? It's 15 years later and yet, we're still thinking growth.

How can social finance work if growth is not the determinant, not the thing we measure and not the goal?

I think it will be in our relationships: Our relationship to the environment with reduce, re-use, re-cycle. There are many social enterprises picking up speed in these areas but the actual measurable growth, on a population basis, is negligible and they want it that way. Our relationship to investment, with the socially responsible investment organizations adjusting and reducing people's expectations around financial growth in exchange for societal benefits like good governance, good working conditions, good outcomes for the environment. Our relationships to commerce such as Fair Trade Associations improving farmers' lives and healthier crops leading to healthier consumers. They don't 'grow' their crop or their land beyond what can be managed, so the end result will be zero growth and yet, the outcome will be better.

Don't think for a second that the word 'growth' will be wiped from the lexicon of social finance; it certainly won't, but there may be a hidden gem here in what we already do. If we reduce our 'need' for growth and rely instead on what makes sense with our present and future populations, we will already be answering a truer definition of economy; back to 'the wealth and resources of a country'. The messaging won't change but our measurement of a 'good' economy will and this is how we already talk in the world of social finance: a better environment, a better society, a better world. See? Things are already looking up.


NOTE: Diagram By Kieyo (blog)