# Is Economic Growth Necessary for a healthy economy?

1. Jan 19, 2009

### baywax

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.

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.

2. Jan 19, 2009

### misgfool

Re: Is "Economic Growth" Necessary for a healthy economy??

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. Jan 19, 2009

### baywax

Re: Is "Economic Growth" Necessary for a healthy economy??

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. Jan 20, 2009

### misgfool

Re: Is "Economic Growth" Necessary for a healthy economy??

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

5. Jan 20, 2009

### f95toli

Re: Is "Economic Growth" Necessary for a healthy economy??

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. Jan 20, 2009

### misgfool

Re: Is "Economic Growth" Necessary for a healthy economy??

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

7. Jan 20, 2009

### baywax

Re: Is "Economic Growth" Necessary for a healthy economy??

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. Jan 20, 2009

### baywax

Re: Is "Economic Growth" Necessary for a healthy economy??

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

9. Jan 20, 2009

### Gokul43201

Staff Emeritus
Re: Is "Economic Growth" Necessary for a healthy economy??

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

10. Jan 20, 2009

### baywax

Re: Is "Economic Growth" Necessary for a healthy economy??

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:

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.

11. Jan 20, 2009

### f95toli

Re: Is "Economic Growth" Necessary for a healthy economy??

If $$f(t)=e^t$$ you will have that $$f\rightarrow\infty$$ as $$t\rightarrow \infty$$

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 refering 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. Jan 20, 2009

### Staff: Mentor

Re: Is "Economic Growth" Necessary for a healthy economy??

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.

Last edited: Jan 20, 2009
13. Jan 20, 2009

### Staff: Mentor

Re: Is "Economic Growth" Necessary for a healthy economy??

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.

14. Jan 20, 2009

### Staff: Mentor

Re: Is "Economic Growth" Necessary for a healthy economy??

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.

15. Jan 20, 2009

### baywax

Re: Is "Economic Growth" Necessary for a healthy economy??

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 earths 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.

Last edited: Jan 20, 2009
16. Jan 20, 2009

### f95toli

Re: Is "Economic Growth" Necessary for a healthy economy??

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. Jan 20, 2009

### Staff: Mentor

Re: Is "Economic Growth" Necessary for a healthy economy??

Lets 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.
Not free, just limitless. Big difference.
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. Jan 20, 2009

### Staff: Mentor

Re: Is "Economic Growth" Necessary for a healthy economy??

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. Jan 20, 2009

### baywax

Re: Is "Economic Growth" Necessary for a healthy economy??

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. Jan 21, 2009

### Gokul43201

Staff Emeritus
Re: Is "Economic Growth" Necessary for a healthy economy??

That doesn't prove it is impossible.

Is there also a limit to the human ability to innovate?

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?