IT is comforting to learn from the director of Jersey Finance that the Island is well placed to benefit from a global return to economic growth in 2011.

The national economic graph has, indeed, begun to climb cautiously further out of the slough of 2008, when we nearly all went bust.

And despite gloomy reports from the high street, fears about rising inflation and predictions of increasing austerity as a result of public spending cuts, some economic growth indicators have showed an improvement. The stock market has rallied, many manufacturers are reporting reasonably healthy order books and bankers are once again creaming off bonuses as if the catastrophe they generated had never occurred.

At the beginning of the year we heard dire warnings from the chief economist at the International Energy Agency that the global economy was in for a bumpy ride in 2011, with steep rises in commodity prices likely to hamper recovery and restrict growth. He should know. On his watch, the price of oil has doubled during the past two years of recession, prompting him to call on producer countries to increase supply and be ‘sensitive’ to the fragile health of the global economy.

There will, indeed, be much to accommodate. Quite apart from the uncertainties caused by the current political turmoil in north Africa and the Middle East, the increases in the price of other commodities such as cereals, sugar, cotton, steel and copper are beginning to have a significant impact on manufacturing and living costs.

The government wants us to spend our way out of recession – in fact, to promote demand for growth. But we are surrounded by smoke and mirrors. Commentators are gloomy when growth figures decline, optimistic when they rise. It seems logical that we have some sort of barometer by which to judge, yet it is unlikely that people actually understand what GDP or GNP represent, or even whether they are good or bad.

It all poses a leading question as to just how we estimate and value accumulation and enhancement. Is ‘growth’ always a wholly realistic measure of the health of a society? Of course the pro-growth argument remains compelling. It goes like this: in an interdependent world, it is better that we all grow so that we can create a universal marketplace and trade within each others’ needs and means. In theory, the more commercial the activity, the more wealth produced and the more beneficiaries.

But there are qualifications. In fact, China was apparently surprised by its own 10.7 rate of growth. It looks healthy by the accepted measure that strong industrial growth means power and affluence, but even figures like these – the envy of rich countries now fighting off recession – hold worries for the future.
The major concern is that all this reported extra wealth is supported by sucking in paper money; it doesn’t necessarily translate into improved infrastructure and can promote underlying resentment in the areas of the country which are not reaping the benefits. Furthermore, the rollercoaster is difficult to stop. In short, the bubble can easily, and dramatically, burst.

Time was when economic growth and population growth went hand in hand. The past two centuries of economic progress in the west have been based on industrial expansion, courtesy of cheap energy – mainly coal to create steam, and oil to provide electricity and transportation. This rapid growth broke down agricultural communities, forcing them into industrial isolation, and crammed them into increasingly smaller spaces, producing Dickensian shanty towns.

We have undoubtedly progressed from there, but the pressures on society and resources have never been as great. In fact, population growth has now been dubbed the defining challenge of the century, with the world population figure projected to rise from 6.9 billion to 9.5 billion by 2075, and with the bulk of the increase being in Africa and other areas already dependent on aid supplies from richer nations.

Logically, we cannot just keep on growing because there is inevitably a limit on what we consume, and increasingly there is a passion for reflection and restraint.
Human beings, animals, even trees (if they’re not hacked down in their prime) have a finite growth pattern. Nonetheless, each generation expects to be richer than its predecessor. It is a life-sustaining instinct – otherwise why plant seeds?
Growth is factored into every target and indicator. It creates confidence and underlies our ability to increase living standards so that we can enjoy ourselves.
But as we have been painfully reminded, there is fragility in just consuming more stuff.

Lest we get carried away, it is worth reflecting on the philosophical reservation attributed to Socrates that happiness is not achieved through material gain. Maybe we should be considering reining in appetites for fear that we exhaust everything, and employ our best resource – man’s ingenuity – in concentrating on sustainability, that is, preparing for when the commodities on which we have depended for the past 200 years can no longer support what we call growth.
It would, indeed, take immense courage to say: ‘Slow down – it’s not what you accumulate, it’s how you use it.’

The theory might prove appealing to those who have, but might be harder to sell to those desperate to catch up.

Now here’s another little conundrum. At the end of last week local estate agents reported the first fall in property prices since 1993. It was initially dressed up as a glitch. But whether it was a plus or minus really depends where you are placed.
Certainly it was a dip for sellers, but for those desperate to buy property, it might signal that with the aid of a powerful enough telescope, they could see more affordable prices on the horizon.
So who’s better off?