October 23, 2009 by alunparry
The Stupidest Question I’ll Ever Ask?
Ok here it is: Why is growth so important?
That might be the stupidest question I’ll ever ask! Or, in light of impending ecological doom, it may be the most profound!! I don’t know yet. Perhaps someone will tell me. It’s the only reason I’m writing this particular post.
I’m a bit puzzled by all the recession panic. Tonight’s news is going nuts because the economy has contracted. By how much I hear you ask? 0.4%
Yes that’s right. A mere 0.4%. And there’s mayhem as a result.
There is an implied acceptance that economic growth is essential, and if we don’t have it, then we are in crisis.
I’m asking why.
If I look in my home at the moment, I have some stuff around me. Things I’ve bought like my sofa or my TV or this computer I’m typing into.
And every week I eat a load of stuff which obviously needs replacing next time.
In the main though, the stuff that I don’t eat doesn’t need replacing very often. I’ve had my TV for instance for about 20 years. When it blows up I’ll consider replacing it. I’ve had my sofa for about 15 years. When the springs start poking me in the arse I’ll consider replacing that.
But apart from the stuff I instantly consume, like food and fuel, I don’t really need more producing.
A quick definition. When we talk of economic growth, we are saying that we have produced more goods and services this year than we did last year.
So economic growth of 5% (for instance) means that not only did we produce all the stuff that we produced last year all over again. But we produced an extra 5% more AS WELL.
Now I don’t know about you, but I don’t need that for my house. I don’t look at all my stuff and think “I need to have a new everything next year or else there’ll be trouble.”
I certainly don’t then demand that I need 5% more over the top of that.
Within 5 years I’d have 5 sofas, 5 cookers, 5 kettles, and so on. Plus some new things I’d never owned before.
So if I don’t need that and you don’t need that, why do we as a country need that?
Why is there a crisis when the mad rush for “produce the same as last year and then a bit” doesn’t quite work out?
Why the panic if it ends up as “we basically produced the same as last year minus a tad”?
Why isn’t that okay?
I might be missing something but what is it?
Does the economy really need to grow by a few percent every year?
Does it matter if it produces just a little less?
And if not, why does everyone go nuts when it happens. Is it psychological or is there more to it?
If you’re scoffing at me now and shaking your head at my utter, utter idiocy then you probably have every right. But I still want the answer.
My Economics A Level isn’t helping me. Maybe you can?
If the amount of stuff I got through last year was fine, why do I need x% more this year? And why is it a crisis if I “only” get the same again?