For most industrialised countries, the 20th century brought great strides in health and life expectancy, access to education and social services, civil rights and equity, and material prosperity. 

During this period, the prevailing thought was that material prosperity was the essential gateway to social progress and individual quality of life.

This model of development has become an article of faith among rich and poor countries alike.

To be sure, a certain standard of material wealth for individuals and nations is necessary for many essential needs, such as health care, education, housing and good nutrition. But is the emphasis on economic growth as the leading measurement of a society’s progress really working well for us?

Many think that we can do better, and not just those outside the economic mainstream. When the head of global markets at Deutsche Bank calls on us to re-think the economic models of the 20th century, for example, we should listen carefully.

There are at least three reasons to be sceptical of economic strategies that focus heavily on increasing the material wealth of already affluent nations such as Australia.

First, ongoing increases in wealth in affluent countries are no longer leading to improvements in people’s actual quality of life. Even as consumption goes up, wealthy countries are struggling with so-called ‘diseases of affluence’, such as depression, social isolation, stress and overwork, obesity, and erosion of community connections.

Finally, and most interestingly, some countries seem to have succeeded in providing very high levels of wellbeing without high levels of material wealth. In Costa Rica, for example, people lead long, healthy lives and report high degrees of personal satisfaction, despite Costa Rica having far less wealth than most industrialised nations.

For Australia, the critical economic challenge is no longer how to increase the production of goods and services. Many of the things that Australians desire – leisure time, vibrant communities, a thriving natural environment, a sense of purpose and wellness in our lives – will not flow automatically from a growing economy. We need a new approach: not one framed in opposition to economic growth, but one that is actively better than growth.

 

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