Schedule 9th International Degrowth Conference

In Global North economies, 15-25% of GDP is typically invested in the formation of new capital, while the rest, the vast majority of economic output, is considered ‘consumption’. Indeed, the economic orthodoxy believes that our economic system is defined by people seeking to maximise their consumption. At the same time, the concept of ‘human capital’ is rapidly becoming central to the understanding of economic growth.

If we accept that people fit the definition of capital – structures which will produce future growth and returns – as global institutions such as the World Bank so readily have, and that human capital accumulates over each individual’s life, then we must similarly accept that this capital is the product of continuous investments. Given the large estimated size of global human capital stocks, human capital must be created using the portion of output that has conventionally been labelled consumption. Using available data and applying the standard backwards-looking account for capital inventories, we show this to be true.

This leaves us with a powerful conclusion: that the things we buy and the things we consume are investments, on various scales, in us as people. This is more than just a disagreement about terminology: to think of people as everyday investors rather than consumption maximisers radically reshapes our perception of economic behaviour, and encourages us to question which investments are in the long-term interests of individuals and society. We will present these findings and discuss their radical potential in helping conceptualise a slowing, sustainable economy.

Info

Day: 2023-08-30
Start time: 12:45
Duration: 00:15
Room: ZV-8-4
Type: Paper Presentation
Theme: Alternative economies

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