Read these two posts together. Art brings up an interesting issue.
Why can capitalism not survive in a no-growth world? Because that's how we set it up. If we set it up differently, it would work differently. If we designed economic policy for a no-growth world, we could live in a no-growth world. You see it in economic models all the time.
We're almost there now, actually. We live in an almost-no-growth world, right? And yes, things are not very good. And even I have been calling for (or predicting, actually) better growth. However, things are not very good in our no-growth world because all our policies are designed for a world of "full speed ahead" growth. Just for the record, then, the fact that economic conditions have satisfied almost no one for the past decade is not evidence that we cannot live in a no-growth world.
I can't lay it out for you today. I'm not particularly a fan of the no-growth world. I don't see it as necessary. But that's just me.
But I can lay out a parallel situation. I can lay out a no-debt-growth world:
Economic growth under this [presently existing] system is supported by credit use. Say we grow three percent. We need credit enough for that three percent. We don't need credit enough for the whole economy. We don't need to use credit for everything. We do use credit for everything, and that's the problem; but we don't have to.
Let the Fed issue that money. If the economy grows 3%, let the Fed issue 3% more money by expanding its holdings of government debt. The system is essentially unchanged under the plan I describe, except the normal growth of Federal Debt held by Federal Reserve Banks is faster than before, and anti-inflation policy gets some help from the tax code.
Remember, I'm talking about encouraging the private sector to pay down debt at an accelerated rate. This doesn't have to be a punitive plan. Shouldn't be, until we can average 4% RGDP growth for a decade. Oh, and this suppression of wages to fight inflation, that has to go.The New Arthurian
A plan similar to this, more or less, could change policy enough to make a no-growth world a pretty decent place to live.
Excerpts from a book review
A bit more from Heilbroner and Silk
The Arthurian
I'm glad this subject is being discussed, but disagree with his explanation for why capitalism needs growth.
ReplyDeleteThe number one reason is the stock market. What would happen to stock prices is companies announced "our revenues and profits are not growing and they never will"???
It's productivity increases.
It's population growth. The U.S. averages 1% annual population growth, guaranteeing that much GDP growth in addition to growth due to productivity.
It's inequality. Most income growth goes to the rich while the rest of us tread water.
So all those things but the big thing is the stock market. The 1% are heavily invested in the stock market so they would be the big losers if there were no growth. You and I do not need growth, we just need jobs and pensions that pay a living wage, and less inequality -- which can come from taking down the rich rather than lifting up the 99%.
It's an ideological divide. Not everyone wants a zero growth world. It's an abhorrent idea oppressive idea biologically, for example. Life doesn't do zero-growth, it's always competitive.
ReplyDeleteDepends on whether people view resources as scarce natural goods or the result of human ingenuity, it probably dictates how you view zero growth as a necessity. Those notions generally arise from deeply held beliefs about the world, god and causality.
The number of mankind keeps growing.... everything else is in pretty much equilibrium ....
ReplyDeleteWe're up to 7B now (alive) and still growing... not ... too.... shabby....
And everyone of those 3 billion newbies added exhaling 40,000 PPM of CO2 every 3 seconds (more than fossil fuels, or your fucking car, btw). Just like each one of you is doing in your office or house right now. I love watching how my (expensive) CO2 meter in my house registers so much higher in winter than summer. Why is that?
ReplyDeleteI set the thing off like a ten-alarm fire just breathing into it just for shits and grins.
ReplyDelete"I love watching how my (expensive) CO2 meter in my house registers so much higher in winter than summer. Why is that?"
ReplyDeleteGenerally because there are no leaves on the trees in the local area, and growing things have gone dormant. That phenomenon occurs across the hemisphere.
In fact you can see a shift in the annual cycle due to climate change, as plants start earlier and die back later.
Or it could just be that your house ventilation is lousy. :-)
Don't confuse the short term carbon cycle with the long term one. It's our abuse of the long term carbon cycle that alters planet-wide CO2 levels.