Just as trend lines are important for fiscal policy, they are perhaps even more important when looking at economic performance.
Even small difference in annual growth rates, for instance, can lead to big changes in prosperity within a couple of decades. And enormous changes over longer periods of time.
All of which explains why I’m such a passionate supporter of free markets. No other system has ever produced so much wealth for so many people.
Unfortunately, not everyone appreciates growth. Indeed, there are some folks on the left who explicitly assert that we need “degrowth.”
I’m not joking. Here are some excerpts from a column in yesterday’s New York Times by .
A rising tide and a bigger pie: Economic growth has long been considered such an obvious boon that it’s pursued by governments across the world as a matter of course. …Now a much more radical proposition has emerged, looming like a wrecking ball: Is economic growth desirable at all? …a burgeoning “post-growth” and “degrowth” movement…remained on the fringes of the fringe for decades, until increasing awareness about global warming percolated into public debates in the early aughts. …
Maybe relentless economic growth was more poison than panacea. …Hickel, an anthropologist who teaches in London and Barcelona and is one of the movement’s most spirited exponents…points to the connection between growing G.D.P. and energy use, identifying an ideology of “growthism” that he equates with “a kind of madness.”
And here are some passages from an article last year in the U.K.-based Economist.
At a three-day “Beyond Growth” conference held at the European Parliament in Brussels this week (and organised by 20 mainly left-leaning MEPs), an audience of youngsters whooped and cheered as speakers proclaimed that, this time, the limits of growth really have been reached. Driven by ecological concerns and riled by social injustice, to them the question is no longer how to mitigate the effects of human activity…
Rather, some form of “de-growth”…is necessary today to avoid societal collapse. …says Philippe Lamberts, co-head of the Green group in the parliament…“when your economy is mature, well, it doesn’t need to grow any longer.” …the “post-growth” advocates…think people can be just as happy with economies going…down. …Instead of trying to grow the pie, the idea is to take what there now is and share it more equally. …their aim is to shrink the pie deliberately. Growth damages the planet.
Interestingly, the article points out that some parts of Europe already are no-growth zones.
…what is Europe, if not a post-growth continent already? Parts of it, like Italy, are scarcely bigger than they were 20 years ago. …How will Europe’s welfare state be financed as society ages?
Is Italy the right country to copy? Most people would say no, especially because an aging population is going to cause so much fiscal pressure.
In an article for the Foundation for Economic Education, Saul Zimet is very critical of the degrowth crowd. He starts by citing what they say.
Ben Burgis, Jacobin columnist and adjunct professor of philosophy at Morehouse College, argues …“you probably are going to have slower economic growth… But I’m not sure that’s an unambiguously bad thing, especially when you start to think about the ecological effects of constant growth for the sake of growth.” Socialist political commentator Ian Kochinski…has said that, “One of the unfortunate truths of being a socialist is you have to accept that your nation will not get to enjoy the skyrocket GDP growth that capitalist nations get to enjoy. There is going to be a sacrifice of some economic efficiency.” …Naomi Klein calls economic growth “reckless and dirty” and advocates a policy of “radical and immediate degrowth” in order to reduce global carbon emissions…
He then explains what is wrong with that agenda.
Economic degrowth is terrible for almost everyone, but it endangers the poor most of all. Therefore, it is remarkable that the problems with degrowth are appreciated least by those who claim to be most focused on the interests of the lower classes. …widespread growth has been unfolding ever since it began around the time of the industrial revolution, which is why over 90 percent of the human population lived in extreme poverty throughout all of human history before 1800, and why less than 10 percent live in extreme poverty today.
It was economic growth, not redistribution programs, that has brought the masses out of extreme poverty like never before in human history. …The critics of growth are wrong about its environmental dangers, but they’re also wrong to downplay its role in the fight against poverty.
I obviously agree with Mr. Zimet, but I’m going to close this column with a different point.
It may seem strange, I want to applaud these leftists for being honest.
Unlike most American leftists, they are not pretending that bigger government magically will produce more prosperity.
In the spirit of Arthur Okun, they are open about their willingness to sacrifice growth in favor of other objectives (in this case, environmentalism).
But keep in mind that their agenda is awful even if they deserve praise for honesty. Call me crazy, but I want the recipe that has produced mass prosperity.
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