Is Economic Growth Necessary for a healthy economy?

In summary, the conversation discusses whether economic growth is necessary for a healthy economy and whether sustainable growth is possible. The participants also touch on the idea of a zero-growth economy and the challenges that come with it, including human population growth and resource usage. They also mention the need for intelligent planning and decision-making to address environmental problems caused by exponential growth.
  • #1
baywax
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Is "Economic Growth" Necessary for a healthy economy??

I've asked a few of the number crunchers I've met if economic growth was necessary for a healthy economy and they can't answer me.

I've pointed out that unchecked growth inevitably leads to the destruction of a system as is the case with cancer. I've asked them if there is such thing as "sustainable growth" where everything and everyone that is discarded after service is placed back in the system as a valuable resource to further economic development... (no, not soilent green:yuck:)

I've asked if a balanced economy would be doomed to stagnation because there would be no "big reward" of billions of dollars for one individual or one, monopolistic company.

And no answers still.

So now I'm asking you guys if you think we can engineer a sustainable economy that will provide as much... and more... security and freedom for the citizens of our countries, edit as previous economies have reportedly done.

Thanks.
 
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  • #2


baywax said:
I've asked a few of the number crunchers I've met if economic growth was necessary for a healthy economy and they can't answer me.

If productivity improves but the economy doesn't grow the result is unemployment. Any changes in population should be strictly controlled. Also if some other country disagrees with your solution and continues to grow your country would be overpowered in no time. It probably is possible to engineer such a system, but the economics would be very different.
 
  • #3


misgfool said:
If productivity improves but the economy doesn't grow the result is unemployment. Any changes in population should be strictly controlled. Also if some other country disagrees with your solution and continues to grow your country would be overpowered in no time. It probably is possible to engineer such a system, but the economics would be very different.

I didn't even consider the option of another country not going along with the program.

However, in that case, the countries practicing sustainable and balanced economic policies would also have to be proficient in preventative surgical warfare. This would not involve a lot of machinery or 100s of thousands of troops. Just about 10,000 extremely well trained actors that know a lot of different languages, customs and methods of identifying and eliminating key figures.
 
  • #4


baywax said:
However, in that case, the countries practicing sustainable and balanced economic policies would also have to be proficient in preventative surgical warfare. This would not involve a lot of machinery or 100s of thousands of troops. Just about 10,000 extremely well trained actors that know a lot of different languages, customs and methods of identifying and eliminating key figures.

10000 extremely well trained actors? The Baldwins? Lol. Thanks, I needed a laugh.
 
  • #5


This was discussed in a special issue of New Scientist a couple of monts or so ago.
The answer is probably no, it is not neccesary; but changing to a zero-growth economy would not be easy.
But of course it will ultimately be neccesary; the only question is when.
After all, there is no such thing as sustainable exponential growth; that is just basic math.
 
  • #6


f95toli said:
This was discussed in a special issue of New Scientist a couple of monts or so ago.
The answer is probably no, it is not neccesary; but changing to a zero-growth economy would not be easy.
But of course it will ultimately be neccesary; the only question is when.

For humans there is a lot of energy left in the universe. As long as there is abundance in energy there is growth.
 
  • #7


f95toli said:
This was discussed in a special issue of New Scientist a couple of monts or so ago.
The answer is probably no, it is not neccesary; but changing to a zero-growth economy would not be easy.
But of course it will ultimately be neccesary; the only question is when.
After all, there is no such thing as sustainable exponential growth; that is just basic math.
Thank you for that. It seemed to be the logical conclusion to a rampant expansion of what is basically... destruction.

misgfool... you're welcome!

The idea of a delta force or joint task force is not new. I am adding the joint factor of acting because a covert force such as I envision would need to blend with the population of the aggressor's country.

Then, they may have the task of impersonating the leaders in a bid to quell radical moves like nuking or harming other nations and their economies.
 
  • #8


What are the difficulties involved in constructing a zero growth economy?
 
  • #9


f95toli said:
But of course it will ultimately be neccesary; the only question is when.
After all, there is no such thing as sustainable exponential growth; that is just basic math.
I'm not very good at basic math. Can you show me the proof?
 
  • #10


Gokul43201 said:
I'm not very good at basic math. Can you show me the proof?

This isn't the proof, its a model of what's been happening... and is put in simple terms for those of us without basic math...:uhh::smile:
Exponential growth drives resource usage for a very simple reason:

Human population increases exponentially:
Currently the world's population is growing at the rate of 1.25% per year, down significantly from the growth rate 30 years ago. But, small differences in growth rates make big differences in the ultimate population that appears

At the moment there seems to be very little that can be done about this and hence, this represents our fundamental problem. That is, you can't really stop it, only slow it down and plan accordingly.

Intelligent planning for exponential resource usage is directly related to environmental problem solving as follows:

All resource usage and/or pollution will grow exponentially but with different couplings to the population growth this is extremely relevant to greenhouse gas emissions

Run the Simulator

In general, decision making is done at the self-interest level. With exponential resource usage, such decision making is extremely destructive. What we need is convergence on the least "bad" option.

The ability to discern amoung the least bad alternatives is extremely difficult. Politics and pseudo-experts come into play. Science can help, but still the process is quite inexact.

The self-interest decision making is encouraged because we do a very bad job at "training" and educating people to look at the data. We do an even worse job at presenting the raw data for objective analysis.

Instead, we are a nation and community of SPIN doctors. This causes people to argue from a position of belief rather than a position of knowledge.

Sorry, I only have the cached version of this web page out of the UofO.

http://209.85.173.132/search?q=cach...rowth+is+destructive&hl=en&ct=clnk&cd=2&gl=ca

This author provides graphs and funny illustrations to show the differences between what he calls

Linear Growth

and

Exponential Growth.
 
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  • #11


Gokul43201 said:
I'm not very good at basic math. Can you show me the proof?

If [tex]f(t)=e^t [/tex] you will have that [tex]f\rightarrow\infty[/tex] as [tex]t\rightarrow \infty[/tex]
:wink:

The point is simply that the real economy can not go on growing forever; there is a finite amount of resources on our planet and we are already running out of some of them (note that I am referring to the real economy, as in the production of goods and services).

Note that I am not suggesting that this will necessarily happen any time soon; but sooner or later things will have to change; whether this change will happen in ten, hundred or a thousand years from now I don't know ("basic math" can obviously not give you a time scale).
 
  • #12


I don't see any reason why growth can't continue essentially forever (unless you can name something that would limit it...?), but we do need to stipulate the two cases: constant population and increasing population. Obviously, with an increasing population, growth is essential otherwise the standard of living must decline. If population stays constant, I don't see why gdp would need to grow, but we would certainly want it to.
 
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  • #13


f95toli said:
If [tex]f(t)=e^t [/tex] you will have that [tex]f\rightarrow\infty[/tex] as [tex]t\rightarrow \infty[/tex]
:wink:
That seems to say that if time goes to infinity, the gdp will too. I think you just proved mathematically that gdp can continue to increase forever!
The point is simply that the real economy can not go on growing forever; there is a finite amount of resources on our planet and we are already running out of some of them (note that I am referring to the real economy, as in the production of goods and services).
But except for nuclear fuel, resources are not consumed. You can use the same piece of steel an infinite number of times as long as you have energy to melt it again. And we do, of course, have an essentially limitless supply of energy from the sun (yeah, maybe 5 billion years, but that is, for our purposes, essentially infinite).
Note that I am not suggesting that this will necessarily happen any time soon; but sooner or later things will have to change; whether this change will happen in ten, hundred or a thousand years from now I don't know ("basic math" can obviously not give you a time scale).
Certainly things have to change: we have to get better at reusing our resources. But that doesn't mean that the economy ever has to stagnate.

Put more simply, the economy could only stagnate if all sources of added value are stopped, and we know that the key driver of the economy - energy - has an essentially limitless supply. In addition, as long as technology doesn't stagnate, worker productivity can continue to increase as well.
 
  • #14


baywax said:
This isn't the proof, its a model of what's been happening... and is put in simple terms for those of us without basic math...:uhh::smile:

Sorry, I only have the cached version of this web page out of the UofO.

http://209.85.173.132/search?q=cach...rowth+is+destructive&hl=en&ct=clnk&cd=2&gl=ca

This author provides graphs and funny illustrations to show the differences between what he calls

Linear Growth

and

Exponential Growth.
That quote talks about population growth, not economic growth... economic growth is faster than population growth, which implies that even with a stop in population growth (likely in the next 50-100 years), economic growth will continue.
 
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  • #15


russ_watters said:
That seems to say that if time goes to infinity, the gdp will too. I think you just proved mathematically that gdp can continue to increase forever! But except for nuclear fuel, resources are not consumed. You can use the same piece of steel an infinite number of times as long as you have energy to melt it again. And we do, of course, have an essentially limitless supply of energy from the sun (yeah, maybe 5 billion years, but that is, for our purposes, essentially infinite).
Certainly things have to change: we have to get better at reusing our resources. But that doesn't mean that the economy ever has to stagnate.

Put more simply, the economy could only stagnate if all sources of added value are stopped, and we know that the key driver of the economy - energy - has an essentially limitless supply. In addition, as long as technology doesn't stagnate, worker productivity can continue to increase as well.

Excellent points russ_watters...

The trick is keeping the water clean, maintaining diversity in the wild, truly integrating our way of living with the natural order of a planet like ours. This would include using the sun as an abundant energy source... as does the majority of life on the planet. But the governmental or other control of population growth leads to strange and uncertain effects as we see in China. The 1 child per family policy, with males being favoured, has resulted in a massive number of men looking for work and women. I fear this is fast becoming a desired reason for a large scale war (re: decline in the male demographic).

When you see the exponential growth of a tumour you see exactly what the human population is doing to the natural balance of Earth's environment. A tumour starts out undetectable, with two or 4 divisions of cells... then in no time there's 30 trillion of them or more vying for space in a limited amount of organs, bones and other tissues.

edit...and yes, I see that economic and population growths are not the same... now that you point that out..

The reason I've entwined the two is because whenever I see more buildings being built and more sewage and water lines going in... I imagine its because of shifting and growing populations.

But there are so many more components to an economy and I'm sure some of them can grow indefinitely as long as they are not destructive or "crowding out" the rest of life on the planet.
 
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  • #16


russ_watters said:
That seems to say that if time goes to infinity, the gdp will too. I think you just proved mathematically that gdp can continue to increase forever! But except for nuclear fuel, resources are not consumed. You can use the same piece of steel an infinite number of times as long as you have energy to melt it again.

But I think we are talking about different things here. Yes, you can of course use the same piece of steel twice; but that would be part of a sustainable economy.
But when economists talk about growth they tend to mean that you are producing MORE (in real terms) of a product (e.g. cars) a given year than you did the year before. This means that an economy that grows with e.g. 2% every year will -at least in the long run- use more steel and -which was the point- the amount of steel needed will on average grow exponentially.

So I agree that it is not all doom and gloom. Energy is as you say potentially "free" which means that we can -at least in principle- recycle just about everything. But the simple fact that we have a finite amount of raw material means that even with 100% recycling there is a limit to how many "products" that can be in use at any given time; and this in itself means that we will at some point need a 0% growth economy.
When this will happen is of course up to debate, but for e.g. certain rare metals (including some that are of commercial importance) 0% growth might become necessary pretty soon.

From my point of view the most important point here is that when governments are striving to keep the economy growing with a certain number of percent per annum they are in fact striving for exponential growth; this IS basic math but there is a surprising number of people who do no realize (or want to realize) this.
 
  • #17


f95toli said:
But I think we are talking about different things here. Yes, you can of course use the same piece of steel twice; but that would be part of a sustainable economy.
But when economists talk about growth they tend to mean that you are producing MORE (in real terms) of a product (e.g. cars) a given year than you did the year before. This means that an economy that grows with e.g. 2% every year will -at least in the long run- use more steel and -which was the point- the amount of steel needed will on average grow exponentially.
Let's hold the population fixed...

If the economy continues to grow, what will happen is that the average life expectancy of cars will get shorter and shorter as people have the means to buy them more often and get rid of them instead of driving them until they die. Just like with our money, it's the circulation of the resources that determines the gdp. The faster they circulate, the higher the GDP. And the quality of the cars they buy will continue to increase. The same hunk of steel that 30 years ago was a yugo could next year be a Corvette.
So I agree that it is not all doom and gloom. Energy is as you say potentially "free" which means that we can -at least in principle- recycle just about everything.
Not free, just limitless. Big difference.
But the simple fact that we have a finite amount of raw material means that even with 100% recycling there is a limit to how many "products" that can be in use at any given time; and this in itself means that we will at some point need a 0% growth economy.
No, with my example above, what it means is there is a maximum world population that can be supported with our resources. If I trade my Mazda 6 in for a BMW 7 series next year and for a Maserati the year after, I haven't done anything at all to increase the demand on global steel production if it is recycled. But is there enough steel to provide everyone with a car...? That's the rub. Our resources may not be able to provide a uniformly high standard of living (not that that's socially/biologically possible anyway...).
 
  • #18


We may be a little off track here, though: the OP asked if economic growth were necessary for a healthy economy. The answer is a simple no. If everyone is happy with where they are economically right now, then there is no need for growth. But only in never-never land and in communism can such a thing happen.
 
  • #19


russ_watters said:
We may be a little off track here, though: the OP asked if economic growth were necessary for a healthy economy. The answer is a simple no. If everyone is happy with where they are economically right now, then there is no need for growth. But only in never-never land and in communism can such a thing happen.

Thats ok... because, as the OP (me) has mentioned there are so many components to an economy it seems perfectly fitting to discuss every aspect of it.

I would still like to see some of the perceived difficulties that come with achieving and maintaining a sustainable, 0 growth economy.

What will it take to get every person's standard of living above poverty levels without destroying the planet and without destroying the culture and economy of the US, Canada, Mexico, etc...?
 
  • #20


f95toli said:
If [tex]f(t)=e^t [/tex] you will have that [tex]f\rightarrow\infty[/tex] as [tex]t\rightarrow \infty[/tex]
That doesn't prove it is impossible.
The point is simply that the real economy can not go on growing forever; there is a finite amount of resources on our planet and we are already running out of some of them (note that I am referring to the real economy, as in the production of goods and services).
Is there also a limit to the human ability to innovate?

Note that I am not suggesting that this will necessarily happen any time soon; but sooner or later things will have to change; whether this change will happen in ten, hundred or a thousand years from now I don't know ("basic math" can obviously not give you a time scale).
I only see any rigorous argument that saturation will occur over time scales that characterize the change in entropy of the entire universe (i.e., gazillions of years?).

PS: A thousand years from now, you might feel embarrassed to have limited your evaluation to the resources available on this planet, don't you think?
 
  • #21


Gokul43201 said:
PS: A thousand years from now, you might feel embarrassed to have limited your evaluation to the resources available on this planet, don't you think?

For the most part our primary resource on this planet is the people and the ideas they have about using their resources. When Earth becomes barren enough to warrant exploration on other planets for water and whatever, I doubt the quality of life and the quality of ideas will allow for much further growth in any direction. Reaching out to other planets for resources will most likely be a signal that the spectrum of human kind is going into "red shift" and is about to end altogether.

If this planet becomes scavenged to the point where we are forced to look for resources on other planets we are obviously doing something wrong. All other life on the planet has been able to continue life with the resources available, in a sustainable manner. How can we integrate that natural balance into our own economic dealings with one another?
 

1. What is economic growth?

Economic growth refers to the increase in a country's production of goods and services over a certain period of time. It is often measured by the gross domestic product (GDP), which is the total value of all goods and services produced within a country's borders.

2. Is economic growth necessary for a healthy economy?

While economic growth is often seen as a sign of a healthy economy, it is not the only factor. Other indicators such as employment rates, inflation, and income distribution also play a role in determining the overall health of an economy. However, sustained economic growth can contribute to a better standard of living and increased job opportunities.

3. What are the benefits of economic growth?

Economic growth can bring a variety of benefits, including increased employment opportunities, higher wages, and improved standards of living. It can also lead to technological advancements, better infrastructure, and increased international trade and investment.

4. Can economic growth have negative effects?

While economic growth can bring many benefits, it can also have negative effects. For example, it can lead to environmental degradation, income inequality, and increased consumerism. It is important for governments and policymakers to implement measures to mitigate these potential negative effects.

5. How can economic growth be sustained?

Economic growth can be sustained through policies that promote investment in education, research and development, and infrastructure. Additionally, promoting innovation and entrepreneurship can also contribute to sustained economic growth. It is important for governments to strike a balance between promoting economic growth and ensuring sustainable development for the long term.

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