Criticism
The real GDP per capita of an economy is often used as an indicator of the average standard of living of individuals in that country, and economic growth is therefore often seen as indicating an increase in the average standard of living.
Four major critical arguments are generally raised against economic growth:
Growth has negative effects on the quality of life: Many things that affect the quality of life are not traded in the market and measured and the market, and they generally lose value when growth occurs, such as the environment.
Growth encourages the creation of artificial needs: Industry cause consumers to develop new tastes, and preferences for growth to occur. Consequently, "wants are created, and consumers have become the servants, instead of the masters, of the economy."
Resources: similar to the arguments made by Thomas Malthus, economic growth depletes non-renewable resources rapidly.
Distribution of income: growth may reinforce and propagate unequal distribution of income.
Supporters argue that global income inequality is in fact diminishing, and that the rapid reduction in global poverty is in large part due to economic growth, according to World Bank. However, decline in poverty has been the slowest where growth performance has been the worst (in Africa). Happiness increases with a higher GDP/capita, at least below around $15,000 per person. Although it is important to notice that the gap between the richest in the world and the poorest is growing. Predictions of rapid depletion, such as The Population Bomb (1968), Limits to growth (1972), and the Simon-Ehrlich wager (1980) have been held to be false by some academics. The book The Improving State of the World argues that growth is rapidly improving the state of humanity and that ecological problems can be solved.
However, other intellectuals report that the narrow view of economic growth, combined with globalisation, is creating a scenario where we could see a systemic collapse of our planet's natural resources, accompanied by increasingly widespread famine and war over the last remaining resources. Ecological Footprint Analysis, for example, suggests that humanity is expending the planet's natural resources at a rate far beyond which it is replenishing them.
Four major critical arguments are generally raised against economic growth:
Growth has negative effects on the quality of life: Many things that affect the quality of life are not traded in the market and measured and the market, and they generally lose value when growth occurs, such as the environment.
Growth encourages the creation of artificial needs: Industry cause consumers to develop new tastes, and preferences for growth to occur. Consequently, "wants are created, and consumers have become the servants, instead of the masters, of the economy."
Resources: similar to the arguments made by Thomas Malthus, economic growth depletes non-renewable resources rapidly.
Distribution of income: growth may reinforce and propagate unequal distribution of income.
Supporters argue that global income inequality is in fact diminishing, and that the rapid reduction in global poverty is in large part due to economic growth, according to World Bank. However, decline in poverty has been the slowest where growth performance has been the worst (in Africa). Happiness increases with a higher GDP/capita, at least below around $15,000 per person. Although it is important to notice that the gap between the richest in the world and the poorest is growing. Predictions of rapid depletion, such as The Population Bomb (1968), Limits to growth (1972), and the Simon-Ehrlich wager (1980) have been held to be false by some academics. The book The Improving State of the World argues that growth is rapidly improving the state of humanity and that ecological problems can be solved.
However, other intellectuals report that the narrow view of economic growth, combined with globalisation, is creating a scenario where we could see a systemic collapse of our planet's natural resources, accompanied by increasingly widespread famine and war over the last remaining resources. Ecological Footprint Analysis, for example, suggests that humanity is expending the planet's natural resources at a rate far beyond which it is replenishing them.