How is it possible for the economies to grow continually? Surely this model is unsustainable?Recession or stability must happen?
Question to me by daughter............answers please
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does the world economy/countries have sustain continually growth......?
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Posted 7 months ago #
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How is it possible for the economies to grow continually?
it isn't.
you may be able to argue that knowledge / information is valuable, and potentially limitless, and so an economy based on knowledge / information could be limitless also...
Posted 7 months ago # -
Your daughter is Stephanie Flanders and I claim my £5
Posted 7 months ago # -
no the child is not s flanders... lol
why isn't it?
Posted 7 months ago # -
Because demand would have to grow continuously, too.
Demand is sated in the west. That's why Euro/US brands are hawking their products so hard in the East. Demand there will not grow indefinitely and, really, would rather purchase regional rather than Euro products.
Posted 7 months ago # -
When I finish reading this I'll get back to you.
Posted 7 months ago # -
Ultimately growth is the consumption of resourses, so while we have personal and national agendas for sustainability, governments only measure of their success is growth, its the only thing they can congratulate themselves for - we're better off than we were under the last guys, we're better off than our neightbours.
If you are in a developing country then growth means real improvements in health and happiness. For us we've passed the point where increased national wealth does us any good. At the moment the increasing costs of food and fuel and partly a result of the poorest nations reaching a point where they can afford to eat. While we moan about the rising costs of food..... its actually a triumph.
We're approx 4 times richer as a nation than we were at the end of the second world war. In the 40's and 50's increased wealth made the difference between indoor and outdoor toilets, had effects on child mortality, on health and longevity. Today increased national wealth means a 60" TV instead of a 40" tv, and the difference isn't meaningful, we're not actually happier or healthier as a nation just because we can buy bigger better things.
Its been suggested that there is 'no intellectual reason why we should seek to get richer as a nation' but we just do out of habit. We're in a state of national panic at the moment because we're not growing, or not growing enough. But thats only because we don't know what else to do.
Posted 7 months ago # -
Its been suggested that there is 'no intellectual reason why we should seek to get richer as a nation' but we just do out of habit. We're in a state of national panic at the moment because we're not growing, or not growing enough. But thats only because we don't know what else to do.
This I like. Never thought of it that way, but I reckon you're right.
Posted 7 months ago # -
Maccruiskeen
Spot on, living standards are (generally) pretty good with most people having what they need (rather than what they want)....therefore demand (and by nature growth) will slow down....the rich find this hard to deal with but i'm with you.....shouldnt it now be celebrated that we have a situation whereby most people have a good standard of living and access to information?....i'm completely underwhelmed by advances in technology beyond what we've got now....beyond watching a bit of TV, making phone calls and browsing the internet (all of which can be done on one device now!) what else do i need from a consumerist point of view?
There needs to be a change in culture and perhaps quality of life/longevity/medical advances are what the government should focus its efforts on now....i'm a firm believer that a capitalist society will look after itself....for example if the population expands then demand is automatically created without government intervention and then growth occurs natually....with this growth and demand people go into business to supply and wealth is created, growth occurs etc etc...
Governments need to stop panicking over a lack of growth, it will inevitably ebb and flow depending on natural demand and population changes...if they arent getting the tax revenue they would like then they need to look at services they provide that can be cut back or abandoned altogether.
Quite simple really isnt it?
Posted 7 months ago # -
So does it really make any difference if the economy flatlines?
We can all keep living as we do now? Of course if the population grows I supppose it follows that the economy needs to grow to support a greater population.
Not sure if thats right but it makes sense in my head!
Posted 7 months ago # -
Some good points there Maccruiskeen.
Apart from this one:
While we moan about the rising costs of food..... its actually a triumph
What happens if someone has a fixed income and can't afford the basics? Guess it's a good thing on an economists spreadsheet though so it's OK.
Posted 7 months ago # -
It's not just out of habit = it's predicated in the term "Consumer society". Now we consume a mixture of goods & services - but for society to grow we must consume more goods and services. There must be a finite limit to this - fundamentally constrained by Earth's resources.
Up until the 70's (arguably) we were still a Capitalist society = one where the emphasis was on the production of goods.
Posted 7 months ago # -
points well made and i would agree, so then why do nations or credit ratings go on continually growth......is this aprt of the capalistic mentality or just the daily mail saying house prices have gone up.
Does the new standard become the national index of happiness....???
Posted 7 months ago # -
production of customer services is still a product
Posted 7 months ago # -
the (bankers) myth of short term continual growth is what fuelled the fantasy of over-spending by consumers and gov'ts.
Given normal(ish) cycles we should have had an economic downturn by around 2005.
Although the long term model seems to show continual growth the short term model typically went in around a 10 year cycle. That we had a 18 year up cycle means the down turn is longer and harder this time.Posted 7 months ago # -
production of customer services is still a product
they are not goods thoughPosted 7 months ago # -
Some good points there Maccruiskeen.
Apart from this one:
While we moan about the rising costs of food..... its actually a triumph
What happens if someone has a fixed income and can't afford the basics? Guess it's a good thing on an economists spreadsheet though so it's OK.
But as a nation theres no reason why our poorest can't eat, just because poorer nations can. If its a problem we need to look at how we can fix it without growing. Food - as a for instance represents about 10% of a household'stypical weekly spend. When we were kids it would have been more like 25%. So either food is cheaper or we're all in the habit of buying things we can't eat, and that we think are more valuable than food, and were adamant that thats how things should stay.
Posted 7 months ago # -
services are still bought...........and sold
not sure about the food bill, in the 70s was it really 25% of the bill?
Posted 7 months ago # -
A quick peek gives this (from the Torygraph):
Posted 7 months ago # -
The world has finite resources - so in reality there must be some physical limits to growth.
Current economic models rely on continuous growth in order to be able to pay down debt. Without growth there would be widespread default on debts and economic turmoil.
Irresistible force meets immovable object.
The 2 conditions seem to be mutually exclusive.
Hence our current situation.
The problem is though, that many of our economists and politicians seem to be backing continuous growth, even in the face of more and more obvious physical limits.
Personally I'm betting on physical limits eventually proving more intractable than the need for economic growth.
Posted 7 months ago # -
But as a nation theres no reason why our poorest can't eat, just because poorer nations can. If its a problem we need to look at how we can fix it without growing. Food - as a for instance represents about 10% of a household'stypical weekly spend. When we were kids it would have been more like 25%. So either food is cheaper or we're all in the habit of buying things we can't eat, and that we think are more valuable than food, and were adamant that thats how things should stay.
I understand and agree with your point from a theoretical viewpoint, though not sure where you got your statistics from. Are they STW statistics? Or from a more credible source?
It's just not everyone is fortunate enough to enjoy being selective about there food purchases. So when prices on staple food groups are increased it can have a major affect. Especially when heating, basic clothing and domestic responsibilities have to be taken into account.
Posted 7 months ago # -
Are they STW statistics? Or from a more credible source?
They are a 'from memory' stat from a source I can't remember but seem to be reasonably well supported by the telegraph (sourced from the office of national statistics) figures above, me being a child of the 70's rather than the 50's. I think my remembered 10% was a proportion of household spend (and presumably included incidencies where there are two or more earners in a household) where as the the 15% above is proportion of income. What's not clear is weather the figures above are an indivdual's spend on household costs or household incomes and household expenditures. The 15% above could possibly include takeaways and eating out as well as shop-bought food.Its also interesting that although we seem to think of clothing and shoes being more expensive these days those figures show it to be half the expense it was in the 50s. In the 30s by GF's dad would go to school barefoot, wearing trousers made from a hand-me down jump. A kid would be taken in to care if they turned up at school like that now!
Either way the same point stands we spend less on food than we used to, partly for reasons we can make choices about as an individual and partly for reasons some individuals can't make choices about. So if we addressed the affordability of food by tackling inequality, rather than pushing for growth then food could continue to be expensive and the poor here and elsewhere could eat and TVs could stay the same size and that would be ace
Posted 7 months ago # -
rightplacerighttime +1
Posted 7 months ago # -
maccruiskeen - Member
Ultimately growth is the consumption of resourses...Agreed. Some very good explanation of this are done by Professor Al Bartlett.
Posted 7 months ago # -
My favourite economics text:
Posted 7 months ago # -
Well if you can halt population growth, then economic growth isn't really essential, we could then get on with making things a damn sight more sustainable too.
Posted 7 months ago #
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