What is Growth?

Short Summary and Critique of a Discussion with Philosopher Peter Sloterdijk

May 12, 2011, Munich


The event took place in the impressive double-helix auditorium of the “BMW Welt” building in Munich (on the picture in the link on the right side)”. Entrance was controlled and only invited guests were accepted – a somehow strange message for a topic with such a great sociopolitical impact. Also, at the same time, another event took place at the BMW Welt building – an after-party following the BMW shareholders’ meeting, in which CEO of BMW Norbert Reithofer announced BMW’s best company result in history, with a 2010 revenue plus of 20% over 2009’s revenues and a profit plus of 210% over the average of the last 4 years (2006-2009), see here for details. This context combined with the fancy atmosphere of the building made the whole discussion somehow “unreal” – which later culminated with an extraordinary blunt and ignorant statement of a stray shareholder from the mentioned parallel event (stay tuned for this highlight).

The host of the discussion, Julitta Münch, opened up by asking the audience, how they would understand or measure “growth”. The first interesting comment from the audience came from an older lady who claimed to just have come home from Bhutan, a small kingdom between China and India, where the king of Bhutan does not measure growth in any classical way – e.g. by measuring GDP – but instead measures the “happiness” of his inhabitants. This comment sparked the discussion among the speakers, starting with Jürgen Kluge, who said that GDP was practically introduced within the US mainly to have a way how to measure how the US weapons industry could outperform Nazi Germany in WW2 – a somehow strange statement as I would have expected to hear something about the limitations of the GDP, like not taking into account disparity of incomes, or the quality or sustainability of growth.

Stephanie Czerny, who proved to be a worthy provider of weird detail knowledge for the rest of the evening, then brought to the table the well-known fact from happiness research that money doesn’t buy you happiness (at least above a certain minimum income necessary to get rid of your worries, somewhere between 10.000 $ and 75.000 $ for inhabitants of western cultures). As the level of the discussion kept to be trite at this point of time, I had to dig a little deeper afterwards to find some more interesting facts about the relation between money and happiness. Especially I was looking for the psychological reasons for the suspended correlation above a certain amount of income and found some cues in an article of Richard Easterlin named “Income and Happiness”: There Easterlin writes: “Income growth does not, however, cause well-being to rise, …, because it generates equivalent growth in material aspirations, and the negative effect of the latter on subjective well-being undercuts the positive effect of the former. Even though rising income means that people can have more goods, the favourable effect of this on welfare is erased by the fact that people want more as they progress through the life cycle. It seems as though Emerson (1860) had it right when he said `Want is a growing giant whom the coat of Have was never large enough to cover.’” Seems like we already found it, in plain words: what is driving “the growth” is not our demand for happiness but rather our need to satisfy our ever growing wants – instead on working on ourselves and fixing our inability to stay happy with what we got we rather squeeze some more out of the world to be able to stay needy/greedy…

But wait. It is too early to draw any unwarranted conclusions from dull incidental remarks. Now, Peter Sloterdijk came to make a point: He said that growth is most presumably an inadequate concept after all, given that we are “growing” things only since we began to live in an agricultural way, which – as we know from the body of evolutionary research – is only some 15.000 years and therefore nothing more than a blink of an eye in the developmental history of man. He suggested that, instead of recurring on “growth”, we might be better off with terms like Aristotle’s ενέργεία (energeia) or φύσίς (physis). Julie Ward describes the latter term in her article “Two Conceptions of Physis in Aristotle’s Ethics and Politics” as “that principle which accounts for the progressive changes that a subject undergoes in its development toward some specific end, as for example, what occurs to an acorn in becoming an oak tree” or in Aristotle’s words “an internal principle of change of a living thing that explains its capacity to undergo alteration while retaining its species identity”. But even more importantly, Sloterdijk also attacked the term “capital” or “capitalism” as being misleading to describe our current social existence. Instead he said that he preferred the term “credit” as only the idea of debt – owing somebody something together with a surplus to be paid back by a fixed time – clearly made a change in the younger history of our social coexistence. Only after introducing this idea into cultural practice, people had to become creative/innovative to be able to pay back their debts plus interest in time – being scared by the then most important power in the state – the bailiff.

As for our global capitalism / “credit society” Sloterdijk then coined the term “pyramid game”. What he most probably meant with it is some kind of “pyramid scheme”, an unsustainable and often illegal business that promises money for bringing new people into the scheme rather than for providing real products or services. Later, when talking to Sloterdijk in person, we were discussing who might be the next one to be brought into the scheme after the Chinese to uphold the whole system.

After Sloterdijk, Johannes Weber tried to make a point by coming up with a potentially new definition of growth he derived from his own social venture. He described how his investment company now provides money for a social start-up – I believe it is Aspiritech – that tries to integrate autistic people into the working environment by using the special gifts of these people for example for meticulous software testing where they prove to be better than “normal” people. Jürgen Kluge however answered this approach with a standard text-book definition of growth and productivity, which seemed to be able to fully encompass the example of Weber: Kluge said that growth is expected from every nation as well as every company as we are all depending on the output of certain goods and services. This output in turn depends on the amount of input and the productivity applied (Output = Input X Productivity). He continued and said that, as we – western or industrialized countries – are not able to increase our input significantly, we have to continuously increase our productivity. Because if we stop doing that, the competition will outpace us and simply produce more/cheaper than us – and the customer will choose to buy the cheaper product from our competitor. In this context, Weber’s example does not constitute any “new” form of growth as the autistic workers are simply more productive/efficient than “normal” ones and thus it is a logical thing to choose these workers in order to create greater “growth”. All of this seems to be textbook ideas from “Chicago school of economics”, which openly promotes economic liberalism and free markets. But did the last financial crisis not prove this kind of thinking wrong in a devastating way? And did the Fukushima nuclear catastrophe not show that our resources can be depleted much faster than we think?

Stephany Czerny then said that the more and more “social” internet might eventually have the power to save us all from any shortcomings of our current growth model and Jürgen Kluge – probably meant as a (wrong) reference to the often misunderstoodlimits to growth”, commissioned in 1972 by the think tank “Club of Rome”, that we should not panic and cross the rivers then, when we reach them – which I would interpret as an erroneous allusion to a false interpretation of the “limits to growth”, as this study never predicted that all “resources would be depleted and the world system would collapse by the end of the 20th century”). And although Sloterdijk did never say that we all going to die by the end of the year if we do not change our pyramid model of economy, there seemed to be a silent consent between the three other speakers that the whole discussion is somewhat unnecessary as we actually do not have to worry about the future: There is still knowledge as a resource, which is, as Jürgen Kluge reminded us, “the only good that increases when shared”.

So, besides Sloterdijk, no one of the speakers did make any attempt to actually change the overcome thinking about growth. The whole atmosphere was somehow saturated by contentment with how things are handled today and if anything was feared than an “irrational” discussion of a “Malthusian Catastrophe”. But although I do share a lot of the points of the critics of Malthus, especially that of Ester Boserup about “necessity being the mother of invention”, I usually don’t feel fine waiting for a problem to become so pressing that a solution is urgently necessary. Even if we follow Ester Boserup and optimistically agree that – on a general human level – “the power of ingenuity would always outmatch that of demand”, we have to acknowledge that mankind is currently not in a position to wait for things to become more critical, so we finally would have a reason to become “ingenious”. Also, it remains questionable whose ingenuity would solve which problem for whom and if the resulting distribution of wealth and value will really be fair and sustainable. A lot of these “optimists” somehow always forget that the greatest danger for our survival will probably not come from nature’s limitations but from our own narrow-minded behavior and our social ignorance. If there will be a catastrophe, it will most probably be self-inflicted and not caused by any “lack” of resources or natural habitat – as Fukushima, the subprime mortgage crisis and the upcoming social crises show.

All in all, I was desperately waiting for any remark about the work of Porter & Kramer on “Shared Value” as an attempt to “fix capitalism”. Also, the whole background from the original study “limits to growth” and its learning were completely spared from the discussion. At least I would have expected that the general insight that exponential growth – while itself being unattainable – since decades has been taken as important requirement for the economic wellbeing of our nations. I also missed out on the many attempts of very bright people trying to face the current problems within our economic system by thinking about “conscious capitalism”, “benefitting companies” or “socially responsible investing”.

In the middle of this intellectually devastating atmosphere now this lost shareholder from the parallel event – the shareholders’ assembly’s after-party came into action and asked to speak up. He told everybody how happy he was that BMW’s CEO Norbert Reithofer just announced a big growth in revenues and profit and that both employees and shareholders will receive a big bonus because of this good result. That said, he tried to publicly discredit Sloterdijk as being “just a philosopher” so he should leave the real things to the real businesspeople who know how to handle it.  I literally instantaneously became ashamed for this guy wishing some kind of usher would just drag him out of the room. But instead, Sloterdijk responded to that guy in a very eloquent way: He said that he did also consider himself a worthy businessman given that he has written some 40 books, received more than 10 internationally renowned awards, appeared in numerous public events and paid a great sum of taxes – which would qualify him as a medium-sized company.

Summing up, the event itself was somewhat surrealistic, but it was funny how it turned out. The intellectual level of the discussion stayed well beyond what I had expected, which might have a lot to do with a) Sloterdijk being the only real intellectual on the podium and b) the audience being a mixture of kind of bored upper-class bourgeois. As the most important failure of the evening I would identify the lack of applied creativity of the speakers: Although two extreme positions were present (Jürgen Kluge, representing the “antique” way of thinking growth in terms of the Chicago school and Peter Sloterdijk, aksing for a new way of thinking instead of growth), the speakers were not able to actually develop new concepts let alone reconcile them with the classic concept of growth. Especially, they missed out on identifying how and when “shared value” can be created and how business and ethics can be harnessed for mutual benefits.

One last remark from my personal experience when talking to Sloterdijk and Kluge after the podium discussion: Sloterdijk is an extremely friendly person, talking to a stranger like me not at all with the attitude of an intellectual superstar but like a true friend: Thank’s Peter! While talking to Jürgen Kluge and his friend – a former Lufthansa chief pilot – I picked up a very important learning: Kluge told me how he did commission a study as one of his last acts while he was still head of McKinsey Germany: He was interested in what were the reasons for fatal company crashes, meaning not only when companies having a hard time, suffering from decreased profits – from which they usually recover, but when companies are really being put out of business. He said that the results of the study showed that over 60 % of all these company crashes were due to ethical problems of the management in one or the other way. And I thought by myself: So why does he think that simple growth is still a valid business model and ethics do have nothing to do with business?

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