Rethinking the Growth Imperative

 Kenneth Rogoff (formerly chief economist at the IMF and now at Harvard) has found the sense to ask: “does it really make sense to take growth as the main social objective in perpetuity, as economics textbooks implicitly assume?”

And he correctly identifies a major driving force behind the growth that does happen in the fact that “people are fundamentally social creatures. They evaluate their welfare based on what they see around them, not just on some absolute standard.”

But what this implies is that the major force driving growth is less its position as a “social objective” and more its status as almost everyone’s personal objective – not out of a wish to actually have more actual stuff but rather out of fear of losing status by falling behind in the race to get it.

And of course national policies are driven by the same competitive zeal.

Unfortunately neither of these attitudes is irrational since 4 billion years of experience tells us in our bones (well genes actually) that whoever isn’t winning is losing and losers don’t last.

Perhaps the growth factor in economists’ models should be seen less as a social goal than as an abstraction of the effects of competitive struggle. If so,  asking the economists to come up with a zero growth model won’t solve the problem. What is needed is to address the psychology that drives that growth. And given its deep roots that may be no small problem.

Meanwhile right wing blogger Will Wilkinson disputes Rogoff’s thesis on the social value of growth by foolishly identifying the correlation between wealth and happiness of members of  society at a fixed time  (and short term changes in the average happiness in societies that are advancing or retreating in wealth relative to other societies at the same time) with the completely different question of how global average wealth correlates with global average happiness.

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