The framework of today’s growth-based economic system was established with the formation of the Bank of England in the late 17th century as the world’s first central bank. An agreement was made between the bankers and King William III, allowing the bankers to issue money as a debt, repayable with interest. Debt is a key driver of growth.
As the long-standing argument goes, it is impossible to have infinite growth on a finite planet. The shortcomings of exponential population and economic growth were most famously highlighted in the 1972 book Limits to Growth, which used a computer model to predict ecological overshoot and a crunch in resource availability in the first half of the 21st century. A 2014 update by Graham Turner, a research fellow at the University of Melbourne, found that trends were running close to the Limits to Growth “standard run” that led to a crisis scenario.
Growth cannot be factored into policy without being quantified, and gross domestic product (GDP) figures were first introduced in the 1930s in the US by American economist Simon Kuznets. At the time, he added a disclaimer about the shortcomings of GDP as a measure of a country’s wellbeing.
