Europe's shrinking economy—bad news or good?

Once again the news of a shrinking economy leaves me with mixed feelings. According to the CBC, the economy of the European Union shrank by 0.2 per cent in the second quarter of 2012 after a flat first quarter.

Surely this is bad news. The EU is heavily in debt and suffers from record unemployment—grim statistics indeed. And all of this leads to increasing social dysfunction.

Yet we know that economic growth cannot continue forever—we live on a finite planet and are using up its resources at an unsustainable pace. Sooner or later the growth must stop and we can either manage its end or have it imposed on us haphazardly by increasingly exhausted resources. The latter, combined with climate change, promises a dystopian future that would challenge the imagination of a pessimistic science fiction writer.

So, if financial mismanagement forces us into a no-growth mode before the realities of resource depletion and environmental abuse overwhelm us, is that a bad thing? The answer of course is no, but only if we adapt to the situation and restore economic health in a sustainable way. Unfortunately, there is little indication our political and business leaders are taking up that challenge. Their only answer seems to be ever more growth and damn the consequences.

As long as we refuse to confront the need to end growth, I will be unable to resist some small measure of satisfaction when I hear that circumstances are imposing on us willy-nilly what we ought to be doing by design.