Eisenstein: our financial system requires growth in order to function
He refers (below) to the growth imperative arising not from increasing human needs but because the financial system requires growth:
“Let’s ask a naive question: already in many countries with slowing population growth, youth unemployment is at record levels. Why then do we think we need to add even more youth to the workforce? Why can’t we allow economic demand to shift from young to old, rather than increasing overall production and consumption by adding more people?
“The short answer is that our financial system requires growth in order to function. In a system in which money is created as interest-bearing debt, the absence of growth means fewer lending opportunities. Without new money entering the economy, existing debts are harder to repay. Bankruptcies increase, wealth concentrates in fewer hands, and pressure grows to financialise assets, liquidate natural wealth, cut social services and essentially direct all resources toward the servicing of debt.
“While this is going on, technological improvements in productivity lead to lower employment, which, coupled with rising indebtedness, cut demand and reduce lending opportunities even more.
“In other words, the growth imperative comes not because human needs are greater than in the past, but because the financial system requires growth”.