The reforms and investments needed in developing countries to see an increase in their human capital and gdp seem to be mostly agreed on.
Investments (both public and private) in education, Healthcare, electrification, communications, roads.
Reforms to make the government transparent and reduce corruption, reforms to make the country friendly to corporate investment, environmental protections, democratic reforms, etc.
So what investments and reforms do nations than already have these things need? I don’t think any wealthy nations manage sustained growth rates above 2-3%. I don’t know if quality of life is improving either. In China, quality of life and income have gone up quite a bit but western nations have not.
Investment in R&D?
Investment in AI?
Everpresent high speed broadband?
Elimination of special interests in government regulation?
The first thing to say is that 2-3% growth is quite nice in the long term. Higher growth rates also carry a degree of risk, because they represent a lot of upheaval of society and the economy.
In a developing country you’re not going to care about that risk while people are still dropping dead of malnutrition.
But in a wealthy country, something like 3% a year in general, with occasional good years over that figure, might be considered ideal.
I’ll be back with some actual responses to the question
Once you have a reasonable basic level of material prosperity, quality of life is very much more dependent on health and on the quality of your personal and family relationships than it is on, e.g., getting more laptops or a bigger car. The OP does mention investments in healthcare, and Septimus mentions universal healthcare but, after these, the next investment priority (as regards healthcare) should be expenditure that will encourage/facilitate healthier lifestyles, so that people get less sick in the first place.
As regards personal relationships, it’s conceivable that there could be an anti-welfare dymanic associated with high levels of prosperity. The higher the real rate of hourly earnings, the greater the opportunity cost of not working an extra hour, and therefore by raising earning (across the board, not just at the low end) we create an incentive to work longer hours, which increases stress and puts pressure on family and other relationshiops, and risks increasing our prosperity while reducing our well-being. So, investments which maintain people’s prosperity while enabling them to work less hours might improve well-being more than investments which raise their earnings.
Long term growth rates above 2% are no longer going to be possible for industrialized countries. All industrialized societies are getting older which mean that tolerance for risk goes down and the number of non-workers will keep getting higher. Governments have all pretty much been captured by interest groups who are invested in the status quo. Thus governments will no longer allow the kind of change needed for high rates of growth.
Some of the larger questions throughout history would suggest a few other ideas to increase GDP/Quality of Life.
[ol]
[li]A Frontier. While Imperialism is obviously connected with gross abuses of natives and warfare, access to more resources at lower cost also promotes growth. This could be Antarctica, the Continental Shelves, Outer Space or the Moon. The Surface Area of Mars is roughly equal to that of Earth above the oceans.[/li][li]Social Justice. Since we’re talking about statistics, the question about what societies do with their criminals, homeless or other underclass is relevant. It’s probably cheaper to ensure a tolerable way of life for people at the bottom of society rather than having asocial fringes. This also potentially increases consumer demand, which is the lifeblood of our modern [/li][li]R&D and Long Term Focus. Another bottleneck of modern society seems to be the need for businesses to run continuous profits. Exploring new technology is great and heavy investment in R&D is important, but market forces make longer term planning very difficult. The US Department of Energy made heavy investments in Solar Power; the rise of nuclear power followed the creation of the A-Bomb. If Biodiesel, Generation IV Fission, Fusion Power or something like Outer Space Solar power is going to work, government will need to play a heavy role in the long term development.[/li][li]Disaster Planning It’s not sexy, but wealthy societies still have issues where they’d need to play defense. This isn’t just climate change but also hurricanes, earthquakes, mass shootings, pandemics. Much of the world faces these sorts of problems, but can these costs be further controlled?[/li][/ol]
Just addressing GDP
[ul][li]More education in STEM fields[/li][li]Reduce business regulation[/li][li]Simplify the tax code[/ul]Not more projects like high-speed rail, which is politically popular but not productive.[/li]
Regards,
Shodan
Education in the STEM fields isn’t really meaningful if there aren’t good jobs for those graduates. Lots of people with bachelors and associate degrees in the STEM fields end up in permatemp work. These jobs pay much less than blue collar union work and offer few/no benefits.
So increasing STEM education matters, but if anything I think we are at over-saturation point. There are probably more people with graduate degrees in STEM fields than there are jobs for them.
This isn’t a bug, it’s a feature. Basically, wealthy nations are, well, wealthy…so you wouldn’t expect them to grow that much, since they have already gone through that phase when they were poor nations that had a lot of room for growth. China is a pretty poor nation, and has grown a lot in the last decade or so because they started out so far down they had no where to go but up. Certainly life in China is and has been improving overall. But that’s like saying someone living on the street is going to see an improvement when they share an apartment with 12 people and share a bathroom with everyone else on the floor of their building. China went from a nation that was desperately poor (they had actual famines during Mao’s various great programs and leaps forward) to one that is simply poor, with a large number of people going from abject poverty to just poverty (with a side of environmental disaster). The US and Europe have already spent decades addressing the worst of their issues, so our poor people by and large aren’t comparable to those in places like China or India, with the majority having access to clean food and water at a minimum. Doesn’t mean we don’t have issues or problems, but they are different issues and problems than countries like China have today.
2-3%, when you are talking about a country like the US, is pretty good. I seriously doubt we will see higher growth at this point, not unless there is an economic revolution of some kind. There just isn’t that kind of scale in the system when you are already at nearly $19 trillion as a nation. That’s a staggering number, especially when you look at the size of the US population. It’s something that’s easy to forget, but basically New York city has a similar GDP alone to a country like Canada or Australia. London, Paris, Tokyo…they are all similar. You need to keep that perspective when talking about this sort of thing to really understand what 2-3% growth represents.
As for investments (I assume as a society), I think education would be the best bet. One thing the US is failing at, IMHO, is education in the STEM categories. We have fairly large labor shortages wrt the technical fields, and we don’t focus the way we should on science and engineering, things I think we increasingly need to drive our economy in the future as it did in the past and enable us to maintain that mere 2-3% growth. Personally, I think we should invest in manned and unmanned space exploration and exploitation as a nation. We should invest even more so in fusion energy, as if we could solve that little issue it could mean a shift to another level for our economy and everything else. We should invest in just basic scientific research, for it’s own sake but also because that’s where breakthroughs that can shift us radically come from. We should invest in strong AI, as again this is one of those potential technologies that could and would take us to the next level.
I’ve been told that pursuing PhD work in many scientific fields is mostly a waste of time by people who work in these fields. Supply has gone up, demand hasn’t. Part of the desire for corporations to import workers is because imported workers have fewer rights and lower wages.
Granted, the US can always use more genius level STEM workers (Demis Hassabis for example). But we really can’t just push a button and create a million more of them since only a tiny fraction of 1% of people have that level of human capital.
Most other problems can be addressed when resources don’t get pissed away by being skimmed off every step of the way. And when governments don’t look to steal everything they can get their hands on, but work to improve life for everyone. Look at Russia. Highly educated workforce up to an including a long-standing space program, large population, passable infrastructure, more natural resources and living space than any other country in history. And the best it can do is a marginal quality of life and an economy 2/3rds that of Italy. Because its more corrupt than many African kleptocracies. At the other end of the scale there are many countries without any of those advantages that still deliver first world living standards to their citizens because that is what their governments set out to do.
Privately invest in educational programs that reinforce the notion that wealth and prosperity come from hard work, savings, and rhetoric that reinforces bourgeois norms.
Wealth and prosperity are not created from bureaucrats with PhDs in “public policy” trying to reshuffle resources produced by the market. Nor are they created by directing attention to the democratic process by fomenting envy and internecine conflict between cultural groups.
As personal note, I do remember that a lot of that was attempted to be taught in El Salvador… Just before the civil war there. The problem was that while it may be so, the reality was that there was a lot of pee then being called rain by the well to do then. Nowadays over here in the USA it looks a lot like pee too when we have a kleptocrat in the white house and we have congress critters that look the other way.
Like I said, hard to take that seriously when the leader is talking newspeak that, besides making a mockery of what wealth and prosperity should be, it also does demonize the cultures that are not like his.
Totally agree if the argument is that too many people have made riches through political connivances. There is an important distinction to make between obtaining wealth through economic means and through political means. I would argue that deployment of the political means, aka aggression, is counter to the bourgeois norms that should be lauded.
An explicit policy of when deficits are and are not permissible. Peg it to the target 2-3% growth rates so that when you have satisfactory growth rates, you have a balanced budget and pay down the debt and when you have slow growth you engage in some Keynesian deficit spending.
