Sunday, August 7, 2011

Will "Growing Faster" Fix the Economy?

Here is President Obama's address for this week. Two or three times, he tells us that his priority is to "get this economy growing faster".

Republicans and Democrats disagree over how to achieve this objective.  Is "stimulus" money wasted, or can it prime the pump for growth?  Do tax cuts encourage businesses to hire, so expanding the economy, or do they merely line the pockets of the already well-off?  But virtually no-one questions the idea that "growing faster" should be our goal - not growth towards some vision of maturity, but "growing faster", growth for its own sake, for ever.

But nothing can grow for ever.

One of the few people who have been thinking carefully - from the perspective of technical economics - about what a no-growth or steady state economy might look like is Herman Daly, a former World Bank economist who is now a professor at Maryland.  Daly is one of the founders of the new discipline of ecological economics, which aims to understand the human economy as one component of the ecology of the planet that we share. In this recent interview, he explains more about this.  Here's the conclusion of the interview:

Interviewer: Do you think that in the future all economics will necessarily be ecological economics?
Daly: That’s what I expect. I mean, we’re faced with two impossibilities. On the one hand, it’s politically impossible to stop growth. On the other hand, it’s biophysically impossible to continue it ad infinitum. So, which impossibility is fundamentally impossible? Well, you know, I’ll take my chances with trying to change the politically impossible, because I don’t think I can change the biophysically impossible.

1 comment:

John Roe said...

Looks like I was not the only one thinking about growth and Obama's speech. Over at CASSE, Brian Czech put words into his mouth....