Is Growth Good?

growth.jpgBenjamin Friedman in The Moral Consequences of Economic Growth claims that economic growth is an imperative and morally necessary, particularly to raise the standard of living throughout the world. But is growth good?
Several readers responded to this question on the Harvard Business School publication, Working Knowledge. Apparently most of the responses indicate that the question should be re-phrased as, what constitutes good growth. Follow the link to read the responses.
Most responders, and by extension most readers who are well-educated managers, seem to hold socially responsible ideas indicating that many know the “right” thing to do (in our eyes). The question I have is, Why hasn’t there been a larger change? Why are economies still measured by gross domestic product? Why do shareholders still want corporations to raise quarterly earning? Why are managers motivated to improve productivity with the intent of reducing the workforce? Read the summary here.
– Ken Chung at
ED NOTE – Ken’s article reminds me of one of my favorite quotes about this issue: “Growth for the sake of growth is the ideology of the cancer cell” – Edward Abbey

2 responses

  1. This is an important topic, I think. I’m not well versed in the issue of growth with regard to business or national economies per se, but I’ve spent a lot of time thinking about a similar question concerning the physical growth of towns and cities. (The two are of course often seen as linked.) About the latter, I’ve seen evidence that, on the scale of cities,population growth is unnecessary for per-capita income growth. Similarly, on the scale of nations, population growth rate may be essentially unrelated to the rate of growth of per-capita GDP.
    This is consistent with the view (my view :)) that towns and cities can safely consider abandoning the conventional thinking that “we have to grow to thrive,” and can thereby adopt a much more sustainable, environmentally conscious philosophy toward their development. Moreover, it just seems like common sense to me that a town could succeed just fine without striving for some sort of mythical endless growth.
    When it comes to the growth of a business, I’m basically sure growth is only necessary if you’re not satisfied with your current return (not sure that’s the correct term, but…). After all, it’s not hard to think of successful businesses (perhaps especially smaller businesses) which have remained about the same size over many years.
    With regard to the economic growth of nations, I would think that some of the same simple logic should apply. Is there really anything wrong with simply seeking a healthy steady state? Though I haven’t read his book, going from the Working Knowledge review, Friedman asserts that growth fosters more moral societies. But that is to attribute causation where there may merely be an association. Countries Friedman probably sees as less moral have likely been those that squelched economic freedom as part of a larger squelching of all freedoms. Presumably a country could nurture and protect freedoms without its business community being pervaded by an “always grow” philosophy.
    Another Edward Abbey quote.

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