Growth Phantoms: A Note on Classical Accounting for GDP and Decoupling from Environmental Impact

Abstract

Reconstructing gross domestic product (GDP) from national accounts in a classical political economic vein leads to a different view on its size and rate of change. This note rehashes the contributions of Duncan Foley and Anwar Shaikh to accounting for GDP with such classical national accounts that carefully distinguish production and non-production activities. It identifies two growth phantoms arising from their analysis: that growth is seen to arise from sectors that can instead be conceptualized as transfer recipients and that overall growth may appear faster than it is. The note then draws some conclusions for the debate about the future of economic growth in a world with increasingly binding environmental constraints.