GROWTH Forever?
Who decided next year always has to be bigger?
Growth sits underneath almost everything in the modern economy. Companies forecast it. Governments promise it. Markets price it. Investors expect it.
The number is supposed to rise.
And if it doesn’t, somebody eventually has to explain why.
I noticed it before I knew what to call it.
Years ago, when I worked for KFC, I remember looking at the yearly forecasts.
There was always another target.
Last year’s performance became the starting point for this year’s expectation. Then this year’s target became the starting point for the next one.
You were supposed to beat it.
And if the numbers weren’t where they were supposed to be, pressure appeared somewhere else. Labour had to be watched. Hours could be squeezed. Staffing had to fit the numbers.
THE QUESTIONWho says we’re automatically supposed to beat last year?
It seemed such a basic question.
A restaurant could still be busy. It could still be profitable. People could still want the product. Staff could still have jobs. The operation could still work.
But once growth became the expectation, simply doing well again could start to look like standing still.
Success resets the baseline.
Imagine a business generating £1 million and setting itself a simple target: grow by five per cent every year.
Nothing says a mature restaurant in a finite local market must double its sales every fourteen years.
The population is finite. The building has a capacity. Opening hours have a limit. Customers can only eat so much. Competitors exist.
Yet the forecast can continue climbing.
The restaurant was only the smallest version of the system.
A company doesn’t merely want to remain profitable. Investors can expect future earnings to increase. Markets price expectations about what comes next. Governments want larger tax bases and expanding economies.
Pension funds invest in businesses expected to generate future returns. Debt becomes easier to carry when future income is larger. Public spending becomes easier to finance when the economy generating the taxes is growing.
Suddenly the little forecast pinned to the operation of a restaurant begins to resemble something much larger.
We say “growth” as though it means one thing.
It doesn’t.
The total
The overall economy can become larger without every person becoming richer.
The individual
Total output and output per person tell us different things about economic progress.
The hour
Producing more value from the resources and labour available is different from simply adding more of them.
The life
Housing, income, energy, transport, services and time determine whether economic expansion actually feels like improvement.
Growth does not mean the same thing everywhere.
A country building electricity networks, sanitation, housing, factories and transport infrastructure is not experiencing the same thing as a wealthy mature economy attempting to increase consumption from an already high base.
China, India, Britain, the United States, Japan and lower-income economies can all talk about growth while describing very different economic processes.
That distinction matters.
More electricity, clean water, housing or transport in a place without enough of them can transform people’s lives. Another percentage point of consumption in an already affluent society raises a different set of questions.
Growth and capitalism are difficult to separate.
Modern capitalism is built around investment. Capital is put somewhere today because somebody expects a return tomorrow.
Companies are judged partly on expectations about future earnings. Investors seek returns. Credit assumes future repayment. Governments plan around future revenues.
None of that means every company must literally become larger forever. But expansion is deeply embedded in the incentives running through much of the system.
What if maintaining something is also success?
Modern economies are very good at announcing the new.
A new railway. A new development. A new job. A new investment. A new factory. A new quarter of growth.
Maintenance is less dramatic.
A bridge that remains safe for another fifty years has value. A sewer that continues to work has value. An experienced worker who stays in a job has value. A business that remains profitable, pays people properly and serves its customers has value.
Yet an economic culture obsessed with expansion can struggle to celebrate simply keeping good things working.
What if the achievement isn’t always making something bigger — but making it last?
Can it rise forever?
This is where the business forecast becomes a much bigger question.
Economic growth does not necessarily require every physical input to increase at exactly the same rate. Technology can make production more efficient. Energy systems can change. Products can require fewer materials. Services and digital activity can generate value differently from heavy industry.
But economic activity still takes place in a physical world.
That doesn’t automatically tell us where the limit is, when it arrives, or whether technological change can move it.
But it does make the original assumption worth questioning.
The difficult part isn’t imagining no growth. It’s imagining everything built around it.
If an economy stopped becoming larger, the consequences would reach far beyond a disappointing GDP release.
Governments would have to think differently about future tax revenues. Businesses accustomed to expanding markets would face different expectations. Debt would have to be managed without assuming tomorrow’s economy would automatically be larger.
Investment returns, pensions, asset prices and public finances would all raise difficult questions of their own.
That’s why “just stop growing” isn’t much of an answer either.
Growth is no longer simply an ambition sitting on top of the system. Expectations about future expansion run through parts of the system itself.
And even when the economy grows, who gets the growth?
A larger economy does not automatically tell us how the gains have been distributed.
Output can rise while housing becomes less affordable. Corporate earnings can increase while wages stagnate. Asset values can rise much faster than incomes. A country can become richer in aggregate while particular households feel poorer.
So the question cannot simply be whether GDP increased.
If economic growth is supposed to improve human life, then the distribution of its benefits is not a side issue.
It is part of the measurement.
At what point did more become synonymous with better?
That is the question I was really asking all those years ago looking at another set of forecasts.
Not whether businesses should make money. Not whether poorer countries should develop. Not whether productivity should improve or whether people’s living standards should rise.
The question was about the assumption.
Why is yesterday’s success automatically insufficient today?
Why must a viable business always become a larger business? Why must consumption continually expand? Why does an economy maintaining a high standard of living necessarily represent failure if its headline number stops accelerating?
Perhaps some of those things can grow without demanding that everything else grows with them.
Perhaps maintenance deserves more respect. Perhaps stability sometimes represents success. Perhaps an economy should be judged by what it allows people to do with their lives rather than by whether one number managed to beat last year’s number.
Or perhaps continued economic expansion really is necessary to sustain the systems we’ve built.
Either way, “growth” shouldn’t end the conversation.
It should start one.
WHO SAYS?
Who says next year automatically has to be bigger than the year before?