Conservative economists are forever using the "trickle down effect" analogy to explain why even massively increased profits are ultimately to everyone's benefit through investment and jobs. Capitalist growth also depends on a growth in consumer consumption which means at least some of the incremental growth in wealth has to be shared.
The corollary of this argument is that if Growth becomes negative due to absolute external constraints - peak, oil, climate change etc. - then it will become a lot more difficult to maintain social order and international peace. People whose living standards are being squeezed will look at the super-rich and expect them to take the bulk of the hit - and the natural response of the elite will be to say that someone else is to blame - Russia, Venezuela, Arab Oil producers etc. - and hence the resource wars will intensify.
The really annoying people are the socialists and environmentalists who point out that such conflicts are not inevitable if we have better efficiencies, less waste, fairer distribution of wealth allied to changes in our profligate life styles. These naysayers and prophets of doom have been arguing against growth as the panacea for everything for years, and the growth has always come through in the end - thanks to technology, the outsourcing of production to China etc., and ubiquitous power of Branding to create new markets.
The significance of Martin Wolf's remarks may be that he realises that we are running out of magic bullets to keep the growth engine running, and that an end to sustainable growth may indeed be appearing on the horizon. For those who have always believed in growth as the panacea for everything, that is an appalling vista. It means the reds, pinkos and the greens have been right all along. Index of Frank's Diaries
The significance of Martin Wolf's remarks may be that he realises that we are running out of magic bullets to keep the growth engine running, and that an end to sustainable growth may indeed be appearing on the horizon. For those who have always believed in growth as the panacea for everything, that is an appalling vista. It means the reds, pinkos and the greens have been right all along.
Exactly - except that we'recoming to an end to "growth", as currently defined. We have not tried "sustainable growth" yet. In the long run, we're all dead. John Maynard Keynes
Let us accept his thesis that ongoing and sustained (if somewhat cyclical, and very unevenly distributed) economic growth is at least one of the reasons behind the relative peace and stability of the western world since WW2.
No, let's not. :-)
Look, if process A and process B are concurrent you have to prove A caused B. Merely saying A caused B, because it fits a particular philosophy or ideology, is a gross violation of Intellectual Honesty.
For example: is it not more likely there are feedbacks between A and B and it is more likely the increase in political stability - not slaughtering each other & not spending money in preparation to slaughter each other - was the Trigger Affect for widespread economic growth in Europe post WW2? Rather than the reverse?
