For many years its troubled me that the “western” economy is founded on continous economic growth. Basically, every financial and business aspect of our economy is based upon continuous growth.
But, isn’t the expectation of continuous and unlimited economic growth just a complete impossibility? And with economic prosperity measured, among other things, in “housing starts”, is it no wonder that taking higher and higher risk was necessary to continue our economic growth? Call it GREED if you like, but, if that’s what it is, its been the core of our economic existence for a long time.
Is continuous economic growth an impossibility? Is it possible to move our economic systems away from the fallacy of continuous economic growth?
I’ve often felt the same way. It’s like a shark having to constantly swim.
However, it’s not just greed and an unchecked desire to get bigger and bigger. Companies have to innovate to keep up with the competion, cut costs/increase revenues to keep up with the competition, and cover inflation and changing market conditions. You can’t just sit back and expect the same money to roll in year after year and succeed.
I don’t know why you put “western” in quotes, since every country in the world wants economic growth. The United States and western Europe have been more successful at achieving it than China and India, but the latter are certainly trying and catching up.
No, the driving factor behind per-capita economic growth is technological improvement, and if there is a logical limit to this, I can’t imagine what it might be. When every patent office in the world shuts down because no one is inventing anything any more, give me a holler.
When people like Marx were laying out similar concerns did they take into account that people would like a laptop computer, an iPod and central air conditioning? What was their vision of technological improvements in the health care industry?
What’s the limit to growth? Look at all of the people living in abject poverty and tell me there isn’t room for growth. Unlimited? I think it’s only limited by available natural resources and other environmental considerations.
On a smaller scale, most cities seem to require continuous growth. I think it’s interesting to watch what happens to completely land-locked cities that can’t grow - Tempe, AZ for example. They are going through a building renaissance, updating older areas, in order to bring in more revenue.
Every time I hear a question like this, I wonder what people do for a living (rhetorical). No offense or to be critical or anything, but I wonder if people like the OP have ever worked in a corporation or even a business. It is every corporations desire to grow, usually profits. In today’s modern economy, as others have said, technological advantage is usually the way to achieve growth. Each worker/employee/whatever can produce more. If my sales team that I support can clone 2 of me, and have me at face-to-face negotiations, they would find a way to do it.
The other way is to expand facilities or take on competition (i.e. try to be the only player in the market) and cut costs or automate, which is essentially a technological achievement as well, but a law can have the same effect (e.g. no need to file any paperwork with the government).
Continuous growth is not out of the question when you consider inflation, population growth, and technological advances. Most companies demand better numbers, they don’t necessarily demand better profit margins.
If the OP is so suspicious of economic growth, I wonder what he thinks about economic decline.
Sure economic growth is at some point unsupportable. When science is finished because we’ve discovered everything discoverable, when technology is finished because we’ve invented everything inventable, when the entire resources of the solar system are either being used or are explicitly reserved for aesthetic reasons.
When will that day come? Someday perhaps, but we’re not anywhere close to that day, that day won’t be close for thousands of years.
Those are all great points. And I’m sure we can list examples of countries that have had very little economic growth during various periods, and it’s not pretty.
But, it seems to be a very dangerous idea for economies to depend upon strong growth. Isn’t that a factor in our current crisis? Didn’t mortgage and investment companies make take more and more risk in anticipation of continued strong growth?
Also, I don’t have an agenda here. It’s just something I wonder about. I’m a pro-economic growth American.
Economic growth is based on the creation of new technology. If you can double the amount of food you can grow in a year, you have doubled your slice of the economy. Since money equates to products, a devaluation of a product means that you can either cut the money supply by that amount, or simply continue on with the supply you have but charging less for that item. The latter is easier, and so there’s a surplus.
So long as there are still ways to increase human productivity via technology, the economy will continue to grow.
That is why “sustainable growth” is an oxymoron. There is no rate of growth which is sustainable indefinitely except zero growth. But, hey, such words sell and every company and government feels obligated to declare the unconditional commitment to “sustainable growth” or “sustainable development”. Whatever.