Uneconomic Growth

We know economic growth when we see it...usually measured in the form of GDP. The higher GDP gets, the more economic growth a country has had.

But what about uneconomic growth? Uneconomic growth is the same thing as unsustainable growth: growth that can’t keep on going like it is, given the negative externalities. (See: Negative Externalities.)

In econ-speak, uneconomic growth is when the environmental and social costs of marginal production outweigh marginal benefits of producing. The environmental and social costs of marginal production continue to accumulate over time. All that accumulation of environmental and social costs means that, eventually, that form of economic growth will shoot itself in the foot.

Right now, worldwide, we’re in a state of uneconomic growth. Even people over at the World Bank from the 1990s would agree with that (hiya, Herman Daly). As climate change continues to wreak havoc on the environment, it will have ripple effects that are both social and economic. The quality of life on the planet will be reduced, which will cost both individuals and businesses big time. Yet we’re continuing to produce, produce, produce. Countries want to stay competitive with each other, and the negative externalities of greenhouse gases don’t discriminate between nations.