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Sunday, 3 June 2012

Economic Growth



The tide of economic growth that has flowed since the second world war may finally be ebbing. For politicians and most economists, this is like saying the sky is falling. Growth has become guidepost and grail, the sine qua non of economic existence. Growth is necessary to job creation and the health of businesses. Without growth the rolls of the homeless and jobless swell, requiring governments to shoulder more responsibility; yet at the same time tax revenues fall, making both new and existing government debt unbearable.
Stimulating growth has become job No 1 for policymakers. David Cameron insists that his nation must deregulate business and reform employment law in order to "go for growth". And at the conclusion of the recent G20 global economic summit, the US president, Barack Obama, reported that the discussions there had revolved around the question, "How do we achieve greater global growth?" Such statements raise nary an eyebrow; they are entirely expected.
Nonetheless, in recent years a few economists have advanced a contrary view. Tim Jackson in the UK, Herman Daly in the US, and Serge Latouche in France have argued that growth is not always good for the environment or for the real health of communities, and that GDP growth is impossible to sustain over the long run anyway because we live on a planet with limited natural resources. Their position has won few adherents in the mainstream. In the "real" worlds of politics and economics, questioning growth is like arguing against gasoline at a Formula One race....