Rethinking Growth: “Human inventiveness will create solutions to our problems”

An artist and an economist debate ‘growth’

Rabobank Artist-in-residence, Arne Hendriks, considers the question “What is growth?” with opinion leaders from different fields of knowledge. This time, he speaks with Peter Hein van Mulligen, chief economist at the Dutch Central Bureau of Statistics (CBS).

The latest winner of “De Slimste Mens” (“The Smartest Person”) TV show and, according to his Twitter profile, “the Netherlands’ numbers guy,” Peter Hein van Milligen also appears to be a born optimist.

Arne Hendriks: I want to know what growth is. Like other people, for most of my life I thought I knew what it was, and that in principle it was good. Now I just don’t know anymore. And that’s why I’m talking to different people – both inside and outside the bank – to try to find some answers.

Peter Hein, what can you tell us about growth?

Peter Hein van Mulligen: We often think economic growth means more: more stuff, more materialism. For me though, growth means innovation. That means doing things smarter, to achieve more with equal or less effort. Not in the sense of more stuff, but more intelligently and, for example, by using less material.

With regards to growth, it’s right to consider the negative aspects of climate change. Within this discussion, the focus is on less: less meat, fewer flights and reduced consumption. That’s a quite Calvinistic attitude: we’ve sinned, and now we must pay the price. But I think we can grow out of our environmental and energy issues through innovation. That, for me, is the essence of growth: using human inventiveness to create solutions. Ultimately, growth is a consequence of human intelligence.

That sounds like a reward. Playing the role of devil’s advocate now, I see things being done in much smarter ways nowadays, but this cleverness often has the purpose of producing yet more stuff. Producing more in the wake of innovation will ultimately be at the expense of our planet. Innovation often seems to lag behind the facts. We try to grow out of our problems through innovation, but the result is that other problems arise

Growth is often a means to achieve different goals. And innovation appears to come with side effects. That’s the big difference with the past 100 years and the period before that: the instrumental approach. Perhaps things changed during the Enlightenment, and a certain degree of goal-orientation came into growth. Somewhere in the history of humanity, the penny dropped and we thought: “wait a minute, this works.” And then we got the explosion in growth we’ve experienced over the last century.

”We can’t scrutinize our own cleverness”

- Arne Hendriks, Artist-in-residence

The geneticist J.B.S. Haldane once said that we human beings are not so big because we’re complex, but we’re so complex because we’re big – a big difference when you’re talking about our human image. At the same time, we know that complex systems are vulnerable systems. Do you believe in the practicability of society? As you say yourself, we invent something and we actually can’t anticipate its side effects. We can’t scrutinize our own cleverness.

When you think about the future, you can often see what’s going to disappear. Take robotics and the professions that will become redundant as a result. It’s visible and you can at least make a reasonable guess about it. At the same time, you don’t know what will take its place. That causes anxiety.

Look at agricultural machinery in the 19th century, which posed a threat to agricultural workers. We now know that this wasn’t the whole truth, that developments adjust themselves and we actually benefit from them. But at the time we couldn’t imagine that. That’s our limitation. Unfortunately we can’t predict the future.

Yet we do exactly that. When we talk about the future now, we’re saying that it will be smarter and better. But when we look back from an ecological perspective, we haven’t succeeded in being smarter as a species. We’ve been very smart to ourselves, but incredibly stupid when you look at how we’ve conducted ourselves regarding the bigger picture.

At the same time, we’ve become smart enough to make scientific observations that show how things are running off the rails. And we’ll have to use our innovative power to put that right. The issue of climate change is an example. It’s extra complex, because it’s so gradual and therefore less urgent. And I think we mainly view the problem locally. We will have to solve that through global cooperation.

We’re unable to think as a species. Only as Dutch people. Do you see a task there for the CBS? You have all these important figures at your fingertips: on biodiversity, CO2 emissions, population growth, prosperity, economic development...

Our most important task is to supply relevant data which will hopefully form the starting point for a broader social debate. Our position is neutral and independent. We have no vision or opinion about the things we do, or else we’d be accused of having our own agenda. Our independence is the most important thing we have. Whatever the discussion is about, ultimately neutral facts must be the starting point. Everyone is entitled to their own opinion, but I don’t think it would be helpful if people were entitled to their own facts.

“People are entitled to their own opinions, but not their own facts”

- Peter Hein van Mulligen, CBS

That’s an interesting discussion for this time… If you’re looking at something and it’s generating numbers, then you’re not looking somewhere else. How do you determine what you do and don’t look at?

Many of the statistics we produce are embedded within a legal framework, which we have to use because other European countries produce statistics too. The reason is so that we have comparable statistics. I think there are few agencies in the Netherlands that know more than we do, and when they do, you’re talking about very specific areas, reaching academic levels.

The CBS is more generalist, we have to know about everything. There are also things that we investigate because there’s a demand for it. We’re transparent about that. We regularly receive requests from ministries to find something out, and they pay us for that. But we publish it for everyone and state openly that it was carried out on behalf of whoever commissioned it. Everything we do must be made public. That’s why it’s often not that interesting for commercial parties to work with us. Because their competitors can read it too, and they’d want to keep the results for themselves.

So, trust. The word trust is also the basis of the word art. When you look at etymology in Hebrew, you come to the same root. And I find that interesting because in the banking world, trust is so incredibly important. Does your research always translate into numbers, or do you also do research into meanings? Do you have a philosophical side? Do you reflect on your position in society?

No, we’re interested in cold, hard facts.

So when I ask you, “what is growth?” – is that ultimately reflected in cold, hard facts?

Yes. And it may well be that we need to approach it carefully: growth is almost a value judgment. So then you start talking about increasing or decreasing. And whether that is positive or negative is then a matter of counting: has it become more or less?

“We’re interested in cold, hard facts”

- Peter Hein van Mulligen, CBS

Interesting. So you’re reducing something qualitative to something quantitative?

When we publish something in a news item, we tend to use less formal terms because it makes it easier to get the message across. I need to know a lot about the content: how are the statistics produced, how do they relate to each other, what’s happening elsewhere in the economy? You must be able to relate all these things to each other.

One of my most important tasks is to tell the economic story behind all the figures. It isn’t enough to just publish the numbers. You also have to give them meaning by telling the bigger story, making it easier for everyone in the Netherlands to understand what the figures mean.

You’re in a position where a lot of information flows come together and you translate that into something that we’ll understand. Why are we so preoccupied with growth? Why is it so important that we continue to grow?

You can look at it in different ways. Growth has a moral dimension. It turns out that societies with growth, in the sense of increasing prosperity, are generally happier and more optimistic than societies with stagnation. And in societies where that prosperity hasn’t quite arrived, but is developing, people think that at least their children can enjoy better lives. That’s a pleasant prospect.

I doubt that this applies to my own children...

Yes, that’s something I’m hearing more often. I’m optimistic myself, because I see no reason why it shouldn’t be the case.

I think we should always find a form, which we can call growth, which makes us optimistic. I do think that this growth must have a different character than it has now.

If there’s no growth, then there must be something that stops it. People are naturally inclined to think: this can be smarter and better. If you let people go their way, they’ll always find a solution. I can’t imagine that one day we’ll say to each other: “we’ve figured out everything that we can think of.”

I intuitively get the idea that everything we do ‘smarter’ and ‘better’ is very specific, or limited. And that there’s still a space around us that we’re simultaneously not developing. Where that same energy, where ‘innovative, smarter and better’ is also needed.

That observation is also a form of growth. Innovative growth takes place in many different ways, forms and levels. Look, for a long time your intuitive line of thought was far from self-evident. But in one way or another, we’ve freed ourselves from it. And we’ve made room for personal growth and spiritual development, for example.

Arne Hendriks: “I intuitively get the idea that everything we do ‘smarter’ and ‘better’ is very specific, or limited.”

You just said something that intrigues me: “If there’s no growth, then there must be something that stops it.”

Then there’s a block. And then growth doesn’t even have to be the goal. Just like a river doesn’t have to flow. But if it doesn’t flow, you think: “Hey, there’s something crazy going on, there must be something stopping the water.” Lack of growth can also have all sorts of institutional causes. From economic history, it appears that when a powerful elite maintains the status quo, it halts growth. And that’s been the case for many millennia. When that reduced, potential increased and ultimately we’ve all benefitted.

"The days when GDP was the sole prosperity indicator are gone”

- Peter Hein van Mulligen, CBS

But as a species we can’t keep using that as an excuse to keep taking more and more land and resources. Under the guise of, “Yes, but in the past we were hungry.” At a certain point, basic conditions have been met and the question is: what are we going to develop now? I think there are other types of development that are often neglected. You talked about spiritual development, but right now the economy is still the big story.

The gross domestic product (GDP) has long been the measure of things, especially for politicians: “the economy is growing, so we must be doing well.” That’s quite logical: GDP is an important indicator of the prosperity of a country. Prosperous countries with a low GDP don’t exist. But the days when GDP was the sole prosperity indicator are gone. From now on, every year the Lower Chamber of the Dutch Parliament will debate the ‘Monitor Brede Welvaart,’ an index that measures the actual prosperity of the Netherlands. And not just that of the moment, but also that of ‘later’ and ‘elsewhere in the world.’

What you do see is that the countries that are the richest, so have the most economic growth, apart from countries that are rich because they have oil, are generally the most pleasant countries to live in – from social, spiritual and cultural perspectives. It’s the personal freedom you have. In the Western European countries, North America, Australia and New Zealand, growth was also achieved because people had the freedom to do so. China is now growing fast, but if it remains a dictatorship, it will hit a wall hard. When you don’t have the freedom to be who you want to be, you end up hindered because you can’t do the things that make you richer as a society.

It’s perhaps no longer so obvious that democracy will survive as a political system. Important aspects of democracy are under pressure. There are decades in which history creeps slowly on. There are also years in which everything changes very rapidly. Through populism, lobbyists and elements that are related to continuous growth can increase and get smarter. This means political newcomers storm the stage and voters simultaneously ask for policies that only recently seemed unthinkable. But if I listen to you…

Whether people live in a democracy or not, in the end we’re all connected to each other. Globalization creates a trend in which societies become more progressive and more liberal. I have seen statistics in which social values have been classified on a spectrum from liberal to conservative. Then it appears that the Middle East is now about as liberal as the Netherlands was in the 1960s. That may be on a different level, but everywhere it’s really going the same way. I think you could say that the liberal genie is out of the bottle worldwide.

“The liberal genie is out of the bottle worldwide”

- Peter Hein van Mulligen, CBS

And the neo-liberal genie. What do you think is the biggest flaw in the system at the moment?

I think it’s far too easy for multinationals to withdraw from all kinds of tax legislation or exploit loopholes within it. And many countries are lending themselves to that. You notice that it causes resentment. I’m a strong proponent of globalization, not least because of the aspect of personal freedom. But the idea of, “we’re active there, but we have a company registered in the Netherlands,” I think this isn’t a good development. It creates an uneven playing field for major international players and smaller regional ones. Again, I see a role for international cooperation there. At the same time, this cooperation is under pressure because there is a tendency towards the sovereignty of countries. Look at Brexit and the developments under President Trump.

Nevertheless, I have high hopes here too, because I feel that these latest developments are generationally driven. You can see that millennials generally think more positively about globalization. Only they’re not yet in a dominant position. The baby boomers are strongly represented there. But they’re slightly on the way out, struggling against a world they no longer recognize from their youth. It’s also the power of numbers. The baby boomer generation is incredibly big: it generates movements that are currently highly visible. But it could be that, fifteen years from now, issues that they are presently focusing on will have become ships that have already sailed.

Who is Peter Hein van Mulligen?

Peter Hein van Mulligen (born Borgertange, 1974) is chief economist at the Central Bureau of Statistics (CBS), where he gained fame as a spokesman for the economy and the labor market. Van Mulligen studied general economics at the University of Groningen. After his doctoral exams, he became an education assistant at the university, completing his PhD thesis in the field of price indices in 2003. He joined the CBS as a researcher in 2002, becoming a chief economist and spokesman in the field of economic publications in 2010. Every quarter, Van Mulligen reports on Dutch economic growth in a press conference. In January 2019, he won the Dutch television quiz, De Slimste Mens. Van Mulligen is a self-confessed ‘madman’ who is one of the founders of the website Spellengek.nl, which tries to stimulate the playing of games. He lives with his family in Delft.

Artist in residence: Arne Hendriks

Growing, getting bigger, is positive – that’s what we learn from an early age. For eight years, artist Arne Hendriks (born 1971) has been researching why, and turning the proposition around: what if we didn’t always want more and more; what if we were to strive for less? With ‘The Incredible Shrinking Man’ Hendriks asks fundamental questions about our obsession with growth – down to our own height. He works with examples of people, animals and living systems as sources of inspiration. Banking4Food Innovation Centre, Rabo Foundation and Kunstzaken invited Hendriks to work on his research at Rabobank. Recently, in the middle of his exhibition, he talked to opinion leaders from various disciplines about the question: What is growth? For more information about his project, The Incredible Shrinking Man, see www.the-incredible-shrinking-man.net.

The published interviews in the ‘Rethinking Growth’ series are a collaboration between Arne Hendriks and writer Jens de Jongh.