For 50 years, Western politics has rested on a single promise: growth.
But what if that promise can no longer be kept?
In this video, I ask a question almost no politician dares to face: what happens to democracy when growth flatlines permanently? I explore stagnant wages, finance-driven “growth”, asset bubbles, pensions, public services, and the political risks of a collapsing economic myth.
If growth cannot return, we must change the purpose of the economy itself — or risk losing democracy along with it.
This is the audio version:
This is the transcript:
When economics denies reality, can it really sustain itself? My question is relevant because what happens if the truth is that we simply cannot grow the economy anymore? In that case, is the whole story of economics as we now know it over? Because after all, that story is what has held Western democracy and neoliberal capitalism together for 45 to 50 years, and has it now finally run out of road? Those are the questions I'm gonna ask in this video.
The question is one that no one in politics dares to ask. That's because everything in our politics now depends on the assumption that growth is inevitable. Just listen to any politician almost anywhere, and the one thing that they promise is growth, but it isn't happening.
Data in the UK at present shows this.
Data in the USA pretty much supports the view, when and if they'll ever get data out of Trump's government again.
In the UK, we are stagnant, and what that means for most people is that, in fact, of course, their incomes are falling, because the history of economic growth is that most of the gains go to the rich, and therefore, if the overall aggregate outcome of the economy is a static flatlining situation, the rich are still getting richer, but everyone else is getting poorer. And so the public policy promise that has been made, on the basis of which people vote for politicians, is failing. Every policy promise that goes alongside that one of growth is also failing, because whether it be improved public services or tax cuts, every one of these also relies on the promise of growth.
But what if growth, as we have known it, is actually finished? What does a democracy do when its central myth collapses, as I think might be happening right here, and right now?
The heart of the problem can be easily stated, as most working people know right now, real growth has not happened for them for a very long time. Their wages prove it. They've been stagnant for decades. Recorded growth has only been kept going by finance and not by real productivity. The City of London has been used to disguise stagnation by creating asset bubbles and increased debt. That is why Rachel Reeves calls the City of London "the jewel in the crown" of the economy, because it props up her illusion of delivering growth. But you cannot run a society on illusions forever.
When finance is the engine of growth, you are already in trouble; that's the truth of the matter. Finance does not create new resources; it reallocates claims on existing ones. It inflates debt far beyond what the real economy can service, and eventually the claims outrun the capacity of society to deliver. That is the moment when democracies begin to crack. When the foundations of debt fail, so too can democracy itself.
What happens if this finance-based model fails? Well, asset prices will collapse as I expect, share prices to do in 2026 now.
House prices will fall.
Pension systems will become unstable.
Wealthier and even middle-class people's security will collapse.
Confidence will go with it.
Public services will face deeper crises because it will be claimed that the tax base has shrunk and therefore they're unaffordable, and governments will lose all their arguments for hope. The promise that things will get better through growth will vapourise.
That will create a political risk. There could be a vacuum where hope used to be. So, what do politicians offer if they cannot offer more via growth now? What happens when the centre cannot explain what is happening and the right exploits the resulting fear? Democracies depend on shared belief. Remove that belief - and growth is the one thing that has been left which people have held in common - and cynicism will flourish. The danger is not of decline; it is of total disorientation and then failure.
Could Western democracies, in fact, cope with this idea of the collapse of growth, not just now, but for good, because, and this is inevitably true, we cannot have infinite growth on a finite planet? Could they survive this? Have we just built institutions based on a desire for expansion and not stability? And in that case, has our political class got the language required to talk about sufficiency or sustainability when growth has gone? Our media treats growth scepticism as heresy. So can our democracy survive without its founding myth?
And could the political class adapt?
Could they accept demilitarisation as a rational response to resource limits, for example?
Could they embrace redistribution as essential rather than ideological as a way of releasing economic potential currently untapped?
Could they support public purpose over private accumulation as the goal of politics, even though for the last 45 years or more, they have abandoned public purpose altogether?
Or are they just too entrenched in market dogma to actually change?
What happens to work if this narrative about growth comes to an end? Remember, our supposedly best minds are dragged into what are appropriately called bullshit jobs in the City because the system depends on them to maintain the illusion of growth, which we currently have. But if that is shattered, if the presumption of growth fails, that entire labour allocation collapses as well. Do we have the willingness and even the skill to redeploy talent into care, the green transition science and our communities, which this would require? And can we, in fact, change the whole purpose of the economy itself, which would be the underpinning of this shift?
Then there is the security question. Can we reorientate if the West is confused, frightened, and leadless? And who might step in if we can't? Could it be Russia? Could it be China? Will private capital provide the alternative to what the state has done? Or will we just see authoritarians abuse the situation and take power? Power does, after all, abhor a vacuum and declining systems attract predators. Our confusion could be exploited just as we once exploited others.
So what is the alternative, because there must be one? I never end without hope.
Can we build a political economy, not dependent on endless consumption?
Can we have a state that guarantees security, but not growth for its own sake?
Can we have public investment guided by real resources and not spreadsheets?
And might we manage the redistribution of income and power so society can function without the bubbles which appear to underpin our illusions of growth at present?
If we could, we would rebuild public services as the backbone of national stability in that case.
We could and would reorientate investment towards renewables and energy efficiency.
We could and should create well-paid, meaningful jobs in care, education, and infrastructure.
And we could and should replace austerity with long-term public planning.
But to do that, we have to realise that strength does not come from GDP growth. It comes from social cohesion, material security, and public capability. A society that meets its own needs democratically cannot be colonised by markets, or by foreign powers; that is the new truth that we have to embrace. Real sovereignty begins with real resilience.
So, what must we confront?
First, growth may not return in the form politicians promise; let's face the facts and own up to them and get on with the rest of our lives.
Second, finance cannot deliver prosperity when the real economy is constrained, and as a matter of fact, it is. We are finite; let's face reality.
Third, we need a new story of economic purpose centred on care, sufficiency and stability, something that I've been talking about for ages.
And fourth, failing to do this invites political capture, externally or internally, and neither appears very attractive to me.
So the path forward is that we must redesign the economy for wellbeing and not consumption. We can secure democracy by making it materially grounded and just. We can rebuild public infrastructure and redirect talent to where it matters, and we can resist geopolitical exploitation by becoming economically honest and socially cohesive; there is, in fact, no other way.
If we cannot grow, we must change the purpose of our economy; in other words. That is my real conclusion here. If finance collapses, democracy must not collapse with it. That may be the crisis we face in 2026.
And if politics cannot promise more, it must, at the very least, promise better, and better for the vast majority of people. If it could do that, then we can get through this. And if we want a future worth living in, we must build that economy I've talked about for so long, based upon care, sufficiency and truth and not on illusions created by the City of London.
The bubble we have, the bubble we are living in, the bubble on which Rachel Reeves is relying, will burst. That's an inevitability. Everyone knows it will. But it may be the last bubble of all, and that's something which none of the institutions of power in this country have got their heads around as yet. The fact that growth might be over and that we must face a new world is something that is so new, so shocking, so unthought of as far as they're concerned, that they cannot embrace the idea, but we must. We must accept this reality, and prepare for a future that is different, very different from what we've had, but which might nonetheless be very much better.
What do you think? There's a poll down below.
Poll
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In times of hardship people have a strong tendency to come together and help each other, it is basic human nature.
So perhaps the end of “growth” is not such a bad thing.
To me your post screams out a simple fact that you have also made clear about in your ideas about resource accounting: there is enough economic activity to keep the world going in just looking after what we have already got? Existing commitments? Or what is left of it?
This is the real growth area?! Never mind the new – what about the old?
And of course putting people first, at the heart of it.
And this does not mean that we won’t need anything new. For example we are going to need to look at new infrastructure to protect and even make new fresh water; cope with coastal erosion and rising sea levels, never mind the latest SUV. And even defence will need looking at, particularly cyber defence.
And still, they won’t learn. Of all people dozy Rachel Reeves is pushing for planning controls to be subjugated – a Chancellor of the Exchequer – only bothered about her bottom line about growth and willing to destroy the environment (looked after by other government departments in her own administration) to achieve her goals acting more like a CEO of a carbon emitting corporation than a custodian of the realm?!
Your post is spot on.
Thanks
Perversely, this is only the end of growth in terms of what the financial industry determines as ‘growth’.
What we need is growth in the care economy – looking after what we’ve got – people, the planet etc. There are enough jobs to be had there for sure.
Agreed
Your middle two poll options are what is already happening. Your first and last options are what one would hope will happen but it is early days yet, and despite what the UK government claims, I don’t see how they can really believe in democracy when so many of their policy decisions are completely counter to what the electorate clearly want.
It occurs to me that every population must reach an optimum rate of economics (not sure what this is called), where the economy is perfectly provisioned to run and provide society with what it needs. In this case, growth could be seen as detrimental, as it would require more resources than are available.
Noted and understood
Might I venture, Ian, that you are referring to economic maturity – where investment in real capital has resulted in a sufficiency of resources to fulfill that which is politically agreed to be, a good life for all.
Through the main entrance at Mole Valley, Standerwick, (Farm Supplies) pitchforks are at on the left
It doesn’t look good especially as there are doubts about the availability of enough copper to support the transition to renewable energy
Renewable energy won’t solve the fresh water & soil shortages, and it will worsen ecosystem degradation.
Degrowth is the only way forward.
Growth can only return if there are increases in consumption to be had. What’s clear is that the rich cannot deliver this demand as they already have enough and save more when they get more.
The majority in Western countries would consume more if they could, however. In developing countries there is a greater gap between Western sufficiency and the average consumption, so less advanced economics may be the driver of future growth. The demand for cars in China might be seen as representative of that.
I thereof take a view that as so many are struggling there is still a decent amount of growth possible for now, but only if there is a rebalancing of economies.
At some point growth may not be possible, but for now ensuring the masses have enough is a better focus for a growth basis than financial tricks or space tourism for the ultra wealthy.
We in the West are already exceeding the Carrying Capacity of the planet in many directions. How do you envisage continued growth without making that situation far worse?
https://en.wikipedia.org/wiki/Carrying_capacity#Ecological_footprint_accounting
The first response would be that I don’t necessarily see carrying capacity worsening as being necessarily an actual restraint on growth in the medium term (whether it should be or not).
However to answer as if it will be a constraint – the outline on carrying capacity discusses reducing resource stocks and accumulating carbon dioxide. I’m strongly in favour of renewables which can change how much each person depletes resources. We’re also seeing a demographic shift so in the coming decades we’ll likely see population decline which may reduce pressure on finite resources. We should also be investing in recycling technologies sustainable forestry, etc, to further reduce this.
The rapid increase in solar and wind power therefore has the potential to reduce the cost of energy (and by extension the cost of living more broadly) while simultaneously reducing our carrying capacity overrun. Meanwhile, actions by the US, EU and UK to roll back mandates to switch to EVs from petrol and diesel cars may reduce some costs but worsen the overrun. Carrying capacity is correlated to consumption, but not 100%.
“Can we build a political economy, not dependent on endless consumption?
Can we have a state that guarantees security, but not growth for its own sake?
Can we have public investment guided by real resources and not spreadsheets?
And might we manage the redistribution of income and power so society can function without the bubbles which appear to underpin our illusions of growth at present?
If we could, we would rebuild public services as the backbone of national stability in that case.
We could and would reorientate investment towards renewables and energy efficiency.”
Not if we continue to vote in governments who pursue “closet Monetarism” like the current Starmer government with its “Fiscal Credibility Rule”:-
https://tribunemag.co.uk/2019/06/for-mmt
The Green Party which might have offered a breakaway from “closet Monetarism” is now on a knife edge with some of its senior members taking seats on the proposed Verdant think tank being pushed by James Meadway a Monetarist masquerading as a Marxist.
I fear we can only build such a desirable state of affairs if we have better people in charge, and more of them. Everyone I know is a decent person; by repute, so is everyone they know. But we are the inviasible and powerless.
In the UK and elsewhere we are stagnant. 🙁
So perhaps you are right that this is then end of growth. And, of course, there are limits to available physical resources on a finite planet. But it seems a touch Malthusian to suppose an end to growth and I am more optimistic than that. 🙂
There has been slow growth in the developed world for decades. But I see two reasons for that other than fundamental limits both of which have been discussed extensively here. One is rising inequality. Henry Ford knew, a century ago, that he had to pay his workers well (and he did) or there would be no one to buy his cars. And now, with high inequality, there is restricted demand limiting growth. It’s the same thing. The second is a steadfast refusal by governments to take up the slack through public spending. This is ideological and flies in the face of lessons learned by Irving Fisher and Maynard Keynes following the Great Depression.
But, perhaps we are actually in agreement, so forgive me if I have misunderstood. Perhaps what you are saying is that growth has ended, not because of fundamental physical limits, but because of current entrenched political policies and choices? In that case I wholeheartedly agree.
I think growth of consunption has ended, but we might need to use what we have better.
I think the growth of well-being has not ended, but we do not emaasure that as yet.
What do you mean by growth? Do you mean the arbitrary economic measure that is GDP?
How about happiness? Health? Education? Justice? Peace? Are these quantities necessarily limited?
Is it possible to imagine how we could organise our society so all people can survive and thrive within environmental constraints? The many, not just the few.
Quite so?
On the end of growth, as you’ve said it seems to be an inevitability that GDP growth, fuelled by materials and increasing energy extraction, cannot continue. The response we choose as a species will be guided by whether our culture can shift away from empty consumption towards finding meaning in simplicity and ‘less’. Will we chase dopamine, or find wisdom? I enjoyed this post by Art Berman on the cultural themes: https://www.artberman.com/blog/only-our-children-will-cross-the-river/
Will we chase dopamine, or find wisdom?
Great line.
Reply to JC and RM – I like the line.. but.
There are many ways to chase dopamine. People with ADHD have a dopamine shortage amongst other things. There are ADDers working in entertainment, spectator sports and emergency services getting their dopamine hits bringing something to others. Dopamine is good, it’s part of the fun of being human. It’s how we get it (all of us, not just the neurodiverse) that matters. Creative engineers and scientists will get a kick out of designing climate mitigation measures. Some crunch numbers and express their joy in tax. A sense of purpose is key. That said, I come here daily for a dose of wisdom!
Some of us get a hit when people say the like what they’ve written.
And why not?
Might the massive emphasis on “growth” by most politicians and “courtier” economists and main stream media be a conveniently controlling “myth” which is a modern version of “jam tomorrow”?
“Jam tomorrow” is an idiom for a promised good thing that never happens, originated in “Through the Looking Glass” by Lewis Carroll. It signifies empty promises, unfulfilled expectations and rewards always being just out of reach, often used for poitical or corporate pledges that never materialize.” [From AI Overview)
All economic growth has offered me over the past 40 years is various iterations of electronic devices that I own less of and which spy on me more and more, and cheap consumer goods I have to buy more of due to poorer quality. Every aspect of human existence has been commercialised, and I don’t feel it’s any more efficient to order a taxi or a pizza via an app. Before I was born, humans put a man on the moon, invented satellites, microchips, and nuclear power. When I was a child, you could cross the Atlantic at supersonic speeds, and the internet was invented. Now, all I see is corporations selling me things that were invented using public money, but locking them behind walls of copyright and enshittification. Growth has been pretty hollow as far as I’m concerned.
Well put
I believe that growth has already come to an end. In the old days we obtained or energy largely from coal and oil; these were high quality fuels with an EROI (Energy Return On Investment) of 30:1 or more. But most of those easily obtained supplies are exhausted and we are using hydrocarbons that are harder to acquire and have lower exergy (useful energy content); the EROI is declining. Wind and solar have significantly lower EROI, particularly when battery storage is factor in. Thus our environment can no longer support our old/expected way of life.
There isn’t a way around this (the limits are set by the 2nd Law of Thermodynamics) unless a plentiful source of energy that has a high EROI can be quickly found. Perhaps thorium reactors?
And the UK does have a program: the UK has active research, development, and private initiatives focused on thorium reactors, with universities like Huddersfield leading research and companies like UK Atomics developing thorium Molten Salt Reactors (MSRs) for industrial heat, aiming for demonstration and commercial use in the 2030s, supported by government interest in advanced nuclear tech alongside standard SMRs.
Interestingly, EROI on current fossil fuels averages about 3.5 globally (with significant variation). EROI for solar panels is about 9-12, with (energy) payback periods as short as 3 years. EROI for new wind generation is about 20:1. EROI for renewables is much higher than new fossil fuels, which is one of many reasons we should be using them. Buffering and storage (not just using batteries) do reduce this somewhat. But the efficiency of renewables and storage is still increasing both in terms of cost and EROI (whereas that for fossil fuels continues to decline).
One also needs to factor in increases in the efficiency of energy usage (a exemplar being the increase in efficiency of lighting through the use of LEDs).
I would question the idea that renewables can not sustain or improve our old/expected way of life. Whether that is desirable, particularly in terms of increased, disposable, consumption, is a different question.
But, again, I am an optimist. I think we can increase energy production and reduce unnecessary and damaging extraction (and associated damaging externalities), whist building an economy of care. As with other issues this is physically possible but the wrong political choices are being made that inhibit the positive outcome that is possible.
Thanks
I should also add that even if we get the energy, we still need the food and raw materials and I suggest this may well be the limiting factor. As others have said, we need a simpler life style and consume less.
According to an email from Ellen Brown today it looks like the USA will need to re-design the economy quite soon :-
“Albert Einstein is often quoted as saying that compound interest is “the most powerful force in the universe.” The quote is probably apocryphal, but it reflects a mathematical truth. Interest on earlier interest grows exponentially, outrunning the linear growth of revenue and eventually consuming everything.
That is where the United States now stands. The government does pay the interest on its debt every year, but it is having to pay it with borrowed money. The interest curve is rising exponentially, while the tax base is not.
Interest is now the fastest growing line item in the entire federal budget. The government paid $970 billion in net interest in FY2025, more than the Pentagon budget and rapidly closing in on Social Security. It already exceeds spending on Medicare and national defense and is second only to Social Security. The Congressional Budget Office projects that interest will reach nearly $1.8 trillion by 2035 and will cost taxpayers $13.8 trillion over the next decade. That is roughly what Social Security will pay out over the same decade (about $1.6 trillion a year). The Social Security Trust Fund is running dry, not because there are too many seniors, but because interest payments are consuming the federal budget that should be shoring it up.
Critics accuse the U.S. of “printing dollars” and exporting inflation, but it is not the government that is printing these dollars. Most of the money supply in modern economies consists of deposits created by private banks when they make loans.
Meanwhile, the producing economy is suffocating. The money supply (M2) has not shrunk, but it is largely trapped in reserves, financial assets and corporate balance sheets. Households are short of cash, wages are too low and demand is suppressed. What the real economy needs is liquidity directed to productivity, not locked in speculative pools.”
Further details here “https://scheerpost.com/2025/12/15/compound-interest-is-devouring-the-federal-budget-its-time-to-take-back-the-money-power/?utm_source=substack&utm_medium=email”
Thanks, I subscribe to her Substack.
This is very deep, Richard, as it contains the seeds of what I have been seeing you develop: the new political economy of the post-financialisation. Here is how I see it:
Post-Financialisation as a School of Thought
This framework constitutes a distinct political-economic school, separable from:
– Neoliberalism (market primacy, growth absolutism)
– Keynesianism (demand management within growth)
– Degrowth (often socially under-specified)
– Green growth (technologically optimistic but materially evasive)
Core commitments of the Post-Financialisation School
– Resource truth precedes financial design
-Real capital formation is the measure of success
– Finance is a public utility, not a growth engine
– Distribution is a precondition for stability
– Care and maintenance are central economic functions
– Democracy requires material honesty
This school does not reject markets or money — it demotes them to instruments subordinate to real-world constraints.
This will now be referred to in a blog post Steve. Thank you.
I’ve mentioned these people before, who work out of my neighbourhood.
Sustainable housing that STARTS with local people, and the needs of a local community, respects net zero and understands about how infinite growth has to stop.
This is the next stage of the We Can Make project. It’s the politics of care applied to housing. They’ve solved the “How?” question. All we need now is the “Will”.
https://wecanmake.org/builds/multimax/
I’ll hear more about it at the next local meet-up in January.
The paucity of vision, the corruption, the venality of our current money-grubbing nation’s leaders makes me weep, when I see what CAN be done by people who care.
Thanks
Richard, you’re raising the question most politicians avoid: what do we do when our economy stops growing? For decades, leaders have promised that growth would bring better wages, better services and lower taxes. But people can see that this hasn’t happened. Wages are stuck, bills are rising, and public services are struggling.
If growth can’t come back in the way politicians keep promising, then we need a new plan a new kind of economics — one based on reality, not wishful thinking.
First, we must stop pretending that GDP growth is the only way to run a country. What people actually need is security: working public services, reliable care, good schools, affordable energy and decent local jobs. These are the foundations of a stable society, and they don’t depend on endless expansion.
Second, we must stop relying on the City of London to “fake” growth through rising house prices, debt and financial bubbles. This kind of growth isn’t real and can collapse at any time. We need to shift focus to real work: caring professions, green energy, infrastructure, science, repair industries and local community services.
Third, we need a fairer economy. In a low-growth world, fairness is essential. If the richest get richer while the economy flatlines, everyone else falls further behind. That means taxing extreme wealth properly, protecting pensions, rebuilding public services and making sure everyone has a basic level of security.
Fourth, we need honesty. People can handle the truth. What they can’t handle is constant political promises based on fantasy growth. Politicians must offer a new story: one built on stability, care, fairness and clear priorities.
Democracy won’t collapse because growth slows. It collapses when leaders refuse to face reality. The way forward is simple: if we can’t promise “more,” then we must promise “enough” — enough security, enough fairness, enough protection for people’s everyday lives. A new economic reality must replace the old economic theories in order to protect our democracy.
Thanks
Angie
A great deal to agree with
When growth stops and the economy turns into a zero sum game, the fact that the rich can and will still attempt to grab an ever larger share of the fixed pie, as they compete with each other for wealth and power, means that the contradictions between capitalism and democracy become unsustainable:
https://gezwinstanley.wordpress.com/how-democracy-dies/