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Now I could ask this question on the economics site but I'm afraid it would be closed shortly after. Who dares to question one of its basic principles. As if it's a Natural law. But why should it be like that? To me economic growth is not a sign of progress.

On the contrary. It's a sign of regression insofar Nature is concerned.

I can imagine an economy where there is no growth. Production is constant in that case. Still economical principles will apply. Supply and demand doesn't demand growth.

Then why do they say that economy needs growth?

Question update: I just saw on TV that the number of people suffering from hunger has risen with 20 000 000. How is this possible if there are people owing owing the capital of a small county? The difficulty with everybody being able to be a millionair is that not everybody can be one. I dont have a problem with being a millionair. If someone wants to be one, why not (it is not that good for Nature but that's another issue). But what drives someone to get more and more? Why should capital grow? Should you let it grow if the capital of others is diving below the minimal of that necessary for existence? Or even below it due to debts? Of course if the debt or having no money (when one wants to use money for living instead of being independent of it which is almost impossible and even forbidden) is due to your own fault but in many times it isn't. Why the ideal of growth? I was always taught at school everybody should get the same. Then later on you are told that you have to increase your capital (which doesn't necessarily mean that everybody *doesn't get the same but in practice it turns out this way).

So, my question is not about if growth gives a growth of standards of living (these differ from one culture to another), but rather why it is presupposed that growth is needed in economy. Regardless of standards of life increasing. What is the philosophy behind this aspect of economy?

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    As you say, this is the "mainstream view", but there are alternative views regarding. See Sustainability Jul 8 at 14:01
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    This is a question on neoclassical economics, not on philosophy. There are other theories out there. And what you suggest effectively means nobody had an incentive to invest, which would mean a degeneration of the economy and means of production. Additionally rising numbers of unemployment, no possibility to build or buy a home, and things becoming more and more expensive. Good perspectives for sure!
    – Philip Klöcking
    Jul 8 at 14:03
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    Because, being economists, they mostly focus on the economic indicators of well-being. It is the same sort of tunnel vision that Maslow called the law of the instrument:"it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail". See The Limits to Growth and Spence's questioning of the underlying premise for alternative views.
    – Conifold
    Jul 8 at 17:01
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    This is a technical question. Macroeconomics is a complex interplay of money, price, demand, supply and more, and "growth" is a technical term in economics. To better understand your own question, you should consult a macroeconomics textbook.
    – Ajax
    Jul 8 at 18:36
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    Maybe there's a reason you successively get banned from every single stack exchange site...
    – armand
    Jul 8 at 22:31
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economies must grow to furnish the growing needs of a growing population. A stagnant economy chained to a growing population means poverty, or extreme income disparity, or both.

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    Hi Niels, as far as I know, the world currently supplies more than enough food and resources to provide for more population than it currently has. Assuming better redistribution, why should low growth / lack of growth necessarily lead to increased poverty or income disparity?
    – Fox Mulder
    Jul 8 at 18:07
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    @Fox Mulder, at some point you’d think an exponentially growing population would outpace a stagnant economy because there’s more mouths to feed. As population grows, distribution needs to grow as well. More people born creates demand for more things than just food: health care, shelter, water, etc Jul 8 at 19:06
  • @CottonHeadedNinnymuggins FoxMulder is right. There is so much produced to feed or shelter everyone. That is, the money corresponding to the produced goods is more than enough to feed and shelter everyone. This money though goes to the ones already having more than enough because they want even more. But why do they want more and more? What is that? Power? Compensation? Just pleasure from the products produced? Why is growth considered more important than the state of Nature? Jul 8 at 23:01
  • Deschele, the fact that a lot of money goes to the rich is a different concept. Ask Jeff Bezos what his drive is for more $$$ because I sure don’t know (he’s got enough $$$ for retirement for many, MANY generations). Growth often leads to increases in GDP per capita which is a major indicator of standard of living, which is why it often has a place above nature. Jul 9 at 17:00
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A growing economy is required to support a growing population. As population increases, demand for many things (especially necessities: food, water, shelter, etc) increases.

You might be tempted to say “so what if demand increases, we don’t need to supply gamers with Xbox’s,... we don’t need to supply people with fast cars.” Except people tend to strive for things that are in their best interest which means these gamers and speed demons are going try to get what they want.

One way to get those things is to buy those things. If nobody is making them, those gamers and speed demons will be willing to pay someone top dollar to make those things for them because it’s a heck of a lot of time and work to do it themself. When they’re willing to pay top dollar, some young entrepreneur might realize this opportunity: they can start making Xbox’s and fast cars and sell them for a lot of money.

You see, since people work in their self-interest, this keeps demand for (even unneeded items) on the rise. When people want something, they’ll try to get it, and if they want it bad enough, they’ll put in the time, money, and effort to get it. The more people that are born (which is a current trend), the more demand increases for MANY things, and therefore the more incentive for people to supply these things to people. As there’s more goods and services supplied, the economy grows, so it’s NECESSARY that the economy should grow as population increases.

TL;DR: As population increases, so does demand because humans need (and want) many things. These needs and wants are met by suppliers who see opportunity to make money, this makes the economy larger. This growth is needed to maintain or improve the current standard of living that some people may or may not enjoy.

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    Does the population always have to grow?
    – D. Halsey
    Jul 8 at 20:44
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    @Halsey the original question is “Why do economists say that growth is necessary”—did I not answer that? Let’s say population stops growing... the drive for people to do what’s in their best interest is still there, so innovation and constant seeking for the next best thing still happens (raising demand for other things, possibly lowering it for other goods/services). As humans invent, innovate, and make things more efficient, the quality and quantity of goods and services (in general) rises, also bringing up the standard of living and changing demand. As long as population rises... Jul 8 at 21:37
  • ... The economy should grow in order to keep (or improve) the standard of living Jul 8 at 21:38
  • But the production griws faster than the population. On top of that, most of the result of the griwth (money( goes to the ones already having much. Not to the people of this growing population. Because of the very fact that they want to grow and to have more and more and more. Even the lmore must grow. But why? Jul 8 at 22:34
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    You seem to be telling me why increases production is bad, rather than unnecessary (which was your original question). Increased production itself isn’t a bad thing, innovation is the heart of growth in the world. If population continues rising, production should in order to keep the current standard of living (or improve it). GDP per capita is usually a good indicator of standard of living... imagine population rises but production (and GDP) stays the same, GDP per capita lowers, along with the standard of living. For your next comment, different people have different motives... Jul 9 at 16:34
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Prior to the industrial revolution, it wasn't common that economies would grow in the medium term. Generally the size of the economy would be based off the resource base you had (farm land, functioning mines). Adding more people wouldn't produce that many more resources, so as population grew wealth per person plummeted.

Any wealth one person had was an equal amount of wealth another did not. The economy was a zero-sum game for the most part.

Governments would engage in wars, or build plague-filled cities, to kill the excess population; and if you didn't, plague and famine would come anyway and kill the excess.

Some areas where a bit wealthier, others a bit poorer, based on recent war results and local resources and the like.

The industrial revolution, starting in the Netherlands. For almost a century the area got slowly wealthier faster than it gained in population. Then England (and later the rest of Britain) followed suit.

Canals, steam engines, coal, wind and rails caused constant regular economic growth. Manufacturing and excess wealth caused cities to be a less crappy option, and manufacturing (textiles, ships, etc) started growing economically compared to agriculture.

The power of exponential growth means that a nation that grows 1% per year faster than its rivals, after 100 years is 2.7 times more powerful. After 200 years it is 7 times more powerful. After 300 years it is 20 times more powerful.

And the industrial revolution, while it started off at a sustained pace of 1% or so per year, accelerated instead. In the 1700s it was 1% per capita growth, then by the 1800s it hit 2% per capita growth. And a population boom also occurred.

In 1600, the UK was a backwater island of a backwater continent. By 1900, a mere 300 years later, the UK was a world-spanning superpower. It did this on the heels of 1% to 2% per-capita growth per year.

The modern study of economics comes out of Europe, and the countries of Europe either mimiced the industrial revolution or became conquered provinces of nations that did. It did not go well for nations that didn't manage this year on year growth.

So economics understands how economies expand, and describes disasters when they don't, because the science of economics was built in a nation that did exactly that (grew), and observed exactly that (lack of growth destroyed countries).


The idea that "not everyone can be a millionaire" is a bit vague.

Do you mean "not everyone can be richer than everyone else", where we use "millionaire" to mean relatively rich? That is true under any universal exchange rate.

If you mean "not everyone can be as rich in resources as a person in the west is that is currently worth a million US dollars", then that may or may not be true.

Suppose the sustained growth in the UK between 1700 and 2000 was about 2.5% per capita per year, and 1.025^300 is about 1600x. If we start with the average person being "worth" the equivalent of 100$ and earning about 1$ in current dollars per day (about 400$ per year), at the end of 300 years of 2.5% growth the average person is worth 160,000$ and earns 64000$ per year. (Note that the growth rate I wrote is a bit high; it was closer to 2%)

Do that for another 100 years and it becomes a worth of 1.9 million and earning 750,000$ per year.

You may wonder how that could be plausible.

A situation where batteries and solar power are 1000x cheaper than they are today is far from certain, but far from impossible. In that scenario, green house gas emissions are no longer a serious problem; instead, we run into net heat flux limits, where the power we use generates heat directly, and radiating that into space is the limit we have.

Before we hit that limit, we'd end up with a society where a good chunk of the planet is wrapped in solar panels (say, 10%) at high efficiency (say 30%), converting 3% of incoming sunlight into useful power.

Using the Kardashev scale, 2018 is about 0.73. A civilization that harnesses 3% of incoming light from the Sun is 0.85 on the scale, 16x "richer" in useful power than our current society.

Even ignoring the idea of using power more efficiently to produce wealth than we do right now, there is room to hit 2.5% annual growth over 100 years with a 16x multiplier.

The worlds current average GDP at PPP is 18k$/year. Times 16 is 288k$/year; and someone consuming 288k$/year is a decent approximation of a "millionaire" lifestyle.

And if all of the power comes from carbon-free solar and similar (even planes use batteries; batteries are chemical fuel cells that can be easily "recycled" with electricity), it is possible (but difficult) that the ecological impact won't be much off modern day society.

The world is pulling off 2%-3% annual growth rate on a 1% growth in population; so closer to 1%-2% GDP per capital growth rate than the above 2.5%. To hit 16x wealthier per person, you'd need 186 years of 1.5% per capita growth.

That end state -- where most everyone on the planet lives at the wealth scales of a modern western millionaire -- is very difficult, but not completely implausible.

One of the reasons it isn't implausible is that the industrialized world already did it. Via economic growth, they "turned everyone into millionaires".

They took the age-old truth that almost everyone lives at the edge of starvation -- the truth of 1600 AD -- and made everyone on average 100x of times richer. By many measures, the average person in an industrialized or post-industrial country lives at a standard of living exceeding the richest 0.1% of people in 1600 AD.

And the same thing is happening in many parts of the world. There are areas going from starvation level poverty being the norm to it being an extreme exception in a matter of generations.

There remains the real, difficult problems of not destroying the planet while doing this.

But that is why economics talks about growth, and considers it highly valuable, and not growing to be avoided. Societies that grew developed the science of modern economics, and the results on the well being of the members of society are huge.

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  • If well being has increased is the question. There are people even commiting suicide because of money (or not having it). What about the contrast between the super rich and the poor? On top of that there are societies (the so-called primitive ones where primitive is precisely defined as them having not the materials and goods and worldview we have) pepole can lead a rich and fulfilling life. Jul 9 at 15:22
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    @DescheleSchilder Yes, people commit suicide. And there is wealth contrast. I'm not sure what that has to do with growth? Ancient Egypt had near zero growth per capita, and it has a huge contrast between rich and poor. Non-state societies are very full of murder: ourworldindata.org/… - but that is going pretty far off topic. I didn't state or claim that economic growth was good, I answered "why economics talks about economic growth like it does", which is what you asked. I also addressed the "not everyone can be" directly.
    – Yakk
    Jul 9 at 15:30
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    @DescheleSchilder You seem to have problems focusing on the questions you ask, and are using pretty stupid or incoherent meanings of "billionaire" and "millionaire". If you say the Weimar Republic was full of billionaires, then easily everyone can be a millionaire. If not everyone can be a millionaire, then the Weimar Republic was not full of billionaires, for any coherent definition of the two. I would advise going and taking some basic high school level rhetoric and logic classes before continuing along this discussion. You are blathering.
    – Yakk
    Jul 9 at 18:45
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    @DescheleSchilder Some mighty big equivocation going on there. Jul 9 at 22:33
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    @But you've just used the term in two different senses, ostensibly in support of the same argument. The Equivocation Fallacy Jul 9 at 23:21

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