The Growth Dilemma

More is more and more is also different
~Benjamin Friedman, The Moral Consequences of Economic Growth, 2005
For much of the last seventy years, economic growth has lifted the quality of life in Europe, North America, and East Asia, providing social stability after the violent disruptions of World War II. Today, however, many of the world’s most influential leaders, even in the United States, reject the very notion that societies should improve material wealth and boost incomes given what they believe are more important environmental or social equity concerns.

This sharp break from the past is occurring as growth in Europe, Japan, and the United States has fallen to half or less of what it was just a generation ago, and while fertility rates are at levels not seen since the medieval era. This promises to create a tsunami of retired people whose retirements can only be addressed by economic growth.

The combination of reduced real income, green-driven rises in energy and housing costs, and growing concern about pensions has sparked a new wave of protests in countries as diverse as Norway, the Netherlands, France, and Chile. The dismal future prospects suggested by slow growth have also led to protests in developing, politically fragile countries such as Lebanon, Brazil, Iraq, Sudan, and Algeria.

Growth: The Forgotten Ideal

Until just a few years ago, the need for economic growth to sustain societies was almost universally acknowledged. This was not just gospel on the free-market Right. Whatever its failings, twentieth century socialism was growth-oriented and espoused the notion, however poorly realized, that greater material progress was critical to expanding working-class wealth.

Now political leaders in France, Iceland, as well as the European Commission increasingly believe, along with influential economists such as Joseph Stiglitz, that growing the economic pie should be supplanted by such goals as better health care, less inequality, and fighting climate change.

Many, particularly on the environmental Left, go even further and advocate “de-growth,” essentially urging societies to consciously reduce their economic wealth. This agenda requires that energy, housing, food, and other consumption costs steadily increase, or be legally prohibited, so that ordinary people will be unable to eat meat regularly, use more energy, live in larger spaces, and travel freely. There’s even a quaint notion that we need to return to a more primitive state of existence, essentially cancelling out the progress of the last few centuries. America’s Green Party, for example, would seek to limit long-distance trade entirely in favor of a feudal economy that is “largely self-sufficient in the production of its necessities.”

Even in the United States, where growth has long been an unquestioned priority, virtually none of the leading Democratic candidates for President even mentions the word. Vice-President Joe Biden, the leading “moderate” in the Democratic party primaries, has explicitly stated that he would wipe out fossil fuel employment in the country to pursue a green agenda.

The American Left’s abandonment of economic growth marks a dramatic shift from the approach of Bill Clinton, or even Barack Obama. In the 1990s, progressives still believed that economic growth was indispensable for improving the lives of the middle- and working-class families. Now, rather than seek to outperform the somewhat more robust economy and modest uptick in blue collar jobs under President Trump, progressives focus mostly on identity issues, environmental piety, and income redistribution.

Read the rest of this piece at Quillette.

Joel Kotkin is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for the Center for Opportunity Urbanism. His last book was The Human City: Urbanism for the Rest of Us (Agate, 2017). His next book, The Coming of Neo-Feudalism: A Warning to the Global Middle Class, is now available to preorder. You can follow him on Twitter @joelkotkin