How can a country’s economy apparently grow year on year without limitation, and why is this thought to be preferable?
Richard Saunders, Dagenham
Send new questions to
If one takes the definition of an economy as the one based upon gdp (GDP), it probably can’t and it certainly should not; the pursuit of continuous development is damaging our planet. Such a design takes no account of parenting, take care of others, voluntary activities and basic wellbeing. We require a different model which is wider and more human. Kate Raworth’s Doughnut Economics is an excellent beginning point. BigBear2
It isn’t and it can’t. More and more individuals consuming more and more resources and generating more and more rubbish will soon be meeting extremely tough limits. Embarassment; it’s most likely the motorists of this who will be the last standing. basil29
It can’t, but it’s the capitalist model– good luck attracting support for the/any option. It’s thought to be desirable since the procedure of “growth” leads to an increase in “wealth”, although regretfully most of this goes to totally the wrong individuals (Bezos, Musk, Rees-Mogg et al) and almost none of it to those who need it. Rotwatcher
Nor does it go to those who make it or deserve it. Nickynin
Economic growth is the only way to remove absolute poverty around the globe. It has actually been phenomenally successful. PatPending
The “economy” isn’t a monolithic thing. The easiest method to explain it is to simplify to three parts: performance, credit and money. If you took a look at each component, you most likely wouldn’t find them growing year on year.
Is it desirable? In a credit/debt-driven economy, the cycles happens because people spend beyond your means when there’s too much credit, then they have to cut costs when the cycle turns the other way and individuals lose jobs and the standard of living declines. The effect of the growth in cash supply is, in time, your cash is worth less (this is inflation). So, no, it isn’t preferable for debt or the money supply to grow year on year, however completely healthy for performance to grow year on year. DrPepperIsNotARealDr
Another huge part of it is inflation. The target for most developed economies is 2%. It’s upward cycle. Earnings up, pay up, rates up. Efficiency is the real growth. Inflation is the perceived growth. Classyrc
I know this concern offers a chance for a review of the capitalist system, but the response that stays away from valuation about the merits or otherwise of commercialism is technological progress. Technological development offers the capability to accomplish higher outputs from an offered level of input. Due to the fact that new technology develops incrementally on previous technology, progress is theoretically limitless.
The distribution of earnings and wealth that has been produced by this development is plainly a mess and whether innovation can continue to develop without developing ecological disaster is probably the most important concern dealing with human society, however these are, to my mind, various problems. Related, however different. thinksthatimacabbage
As David Attenborough when said: “Anyone who believes that you can have unlimited growth in a finite environment is either a madman or an economist.”
A more particular and uglier answer is that it is seen as desirable due to the fact that for several years the World Bank and the IMF have made increase in GDP and financial growth the steps of a nation’s health (and ability to get loans, not have loans called in etc). Which is absurd when you consider that this requirement made, for example, Sierra Leone and Liberia among the “healthiest” countries, due to financial growth associated to diamonds, while they also can be found in at the bottom of all the nations on the planet in medical health or public health infrastructure. However it’s still preferable since otherwise they employ the loans. Thomas1178
With the best respect to David Attenborough, the environment is not limited. Increasing knowledge and increasing culture is economic growth with negligible usage of natural resources. The release of Blue World does not prevent us taking pleasure in Life in the world. The understanding of crop-rotation develops financial growth without using more natural deposits than monoculture. UpVoteThis
A modern-day economy is primarily services. The UK economy is about 80% services. We can continually improve the services that we provide to each other. Some development areas are health, social care, education, entertainment and leisure. There is no factor that we can not continually grow these things. They do not need more physical resources. ProSTEM
They don’t require physical resources (or, at least, require them less intensively). However what does increase tremendously is energy intake, because of the calculation services progressively needed. For example, Bitcoin mining now accounts for 1% of the world’s overall energy usage (see Senate Committee on Energy and Natural Resources, August 2018), orders of magnitude more than its proportion of the economy and even the “minting” of traditional currency (physical or otherwise).
Physical resource development now just keeps pace with population development. Per capita development is now restricted only by the expense and accessibility of energy for computation. The unique Accelerando [by Charles Stross] takes this to its absurd however rational conclusion, where male’s rapid requirement for computation resources rapidly takes in the entire solar system. HaveYouFedTheFish
Bitcoin mining is nothing to do with economic development. It’s inefficient and meaningless. In the case of real digital services, cloud computing providers are building more effective servers utilizing more efficient processors and purchasing sustainable electricity. Both of these are financial development in themselves, along with permitting the growth in digital without the comparable development in energy use. theindyisbetter
Nominal GDP can go up every year simply by increasing the cost of things. It keeps the chancellor delighted although no extra goods and services are produced. UKClimber
Now that one of the crucial subjects of our period is climate control, it is not desirable for countries’ economies to keep growing. What we need is a reality check, followed by a modification of standard presumptions, and a prepare for how we manage economy contraction. David J Watts
The factor we believe the economy is growing is because we are locked, like lemmings, in a race to the cliff edge and have no time to comprehend the disaster that awaits human civilisation. The planet has a finite capability to support life therefore, as the economy grows, the space for life for each human diminishes– and we thoughtlessly destroy nature along the way. Malcolm Whitmore
” Billions of us will die and the couple of breeding pairs of individuals that endure will be in the Arctic where the climate stays tolerable”– Prof James Lovelock. rumblestrips
” Growth for the sake of growth is the ideology of the cancer cell”– Edward Abbey, The Journey Home: Some Words in Defense of the American West names3
Capitalism is a snake consuming its own tail. silverkaite