8 ms·

Fear of recession is irrational. There is no need for continuous growth.

sasaf5 7y ago
I like this sentence. Please elaborate or give some links, I would like to read more. Edit: why the downvotes? I am sincerely interested to read more about the necessity of growth or the lack of it.
- frozenport 7y ago
  https://en.m.wikipedia.org/wiki/Voluntary_Human_Extinction_Movement https://en.m.wikipedia.org/wiki/Voluntary_Human_Extinction_M...
carlmr 7y ago
I get where you come from. You have to see though that for a lot of people recession means losing their jobs, being unable to provide for their families, etc. The fear of recession is entirely rational for anyone without a savings account covering the next 2 years.
- ironic_ali 7y ago
  Everyone should be spreading their savings around different banks. Banks will only pay back a certain amount if they go bust - and it depends on the country how much that is.
  - mschuster91 7y ago
    > Everyone should be spreading their savings around different banks. Which savings? 60% of the US population has less than 1.000 $ in liquid savings per [1]. In Germany it's 33% per [2]. When the recession hits (not if but when) people are going to get fucked. The 2008 crisis wiped out what many people had and its aftermath left them unable to rebuild their savings, and social security institutions have been wrecked since neoliberalism took over - I certainly expect (food) riots once recession hits. The Yellow Vests in France are an example what a still relatively rich but angry population can do, and extrapolating from that reveals a not very nice future. [1]: https://www.cbsnews.com/news/most-americans-couldnt-cover-a-1000-expense/ https://www.cbsnews.com/news/most-americans-couldnt-cover-a-... [2]: https://www.focus.de/finanzen/news/finanzen_news_armut_in_deutschland/armutsgefaehrdung-in-deutschland-fast-ein-drittel-kann-sich-unerwartete-ausgaben-unter-1000-euro-nicht-leisten_id_8805287.html https://www.focus.de/finanzen/news/finanzen_news_armut_in_de...
    - TheSpiceIsLife 7y ago
      How deep, how rapid, and where, does recession need to be in order for there to be food riots?
      - carlmr 7y ago
        https://www.thetimes.co.uk/article/britain-four-meals-away-from-anarchy-fc9kfgc0w92 https://www.thetimes.co.uk/article/britain-four-meals-away-f...
        TheSpiceIsLife 7y ago
        Firstly, if you’re going to post a link it’d be helpful if you elaborate why you believe the content of the link supports or refutes your claim. Secondly, the link you provided states “in the event of a catastrophe that stops the supply of food”. Is a recession a food supply halting catastrophe?
        carlmr 7y ago
        I didn't make a claim, so I don't need to support or refute it. But back to the point. Not having money is functionally the same as stopping your supply of food. So if the recession is deep enough that enough people can't buy food anymore there may be riots and looting. Above posters said that 60% of Americans don't have meaningful savings. That would mean in the event that they can't afford food, more than half of America might start a revolt. (Of course depending on the size of the recession).
        TheSpiceIsLife 7y ago
        My point is: you’re confusing catastrophe with recession. In a food supply halting catastrophe we’ve got problems, catastrophic problems. A recession that hits any significant portion of the population will have political-will to find alternative outcomes, and probably won’t happen with the rapidity catastrophes are usually associated with. Eg. food aid, wealth redistribution, easy / no-interest credit, government jobs. I’m not saying any and every political outcome won’t result in a catastrophe, but every food halting catastrophe is, by definition, a massive catastrophe. You may have a wider point though: just in time manufacturing / delivery in the food industry means probably most of the world is a few meals away from panic.
  - coldtea 7y ago
    >Everyone should be spreading their savings around different banks. Depending on the country this will not save you. You can have it in N banks, and still get back up to a fixed X amount, because the amount is per person, not per account. And this assumes people have "savings". Most people outside of the 10% echo chamber live paycheck to paycheck. https://www.cnbc.com/2019/01/09/shutdown-highlights-that-4-in-5-us-workers-live-paycheck-to-paycheck.html https://www.cnbc.com/2019/01/09/shutdown-highlights-that-4-i... https://money.cnn.com/2018/05/22/pf/emergency-expenses-household-finances/index.html https://money.cnn.com/2018/05/22/pf/emergency-expenses-house... https://www.bankrate.com/banking/savings/financial-security-january-2019/ https://www.bankrate.com/banking/savings/financial-security-...
  - skybrian 7y ago
    For the U.S. it's $250,000 so most people in the U.S. won't have to worry about this.
choeger 7y ago
If there shall be no growth, there may be no innovation. Essentially every product and service has to be created the same way, using the same amount if manual labor, as yesteryear. Economical growth is not necessarily growth in consumption of resources. It is also a measure of getting more out of less.
- NeedMoreTea 7y ago
  I see, so there has been no new Japanese product or innovation during the 20 or 30 years of Japanese deflation? Every car is from 1990, every CD walkman still available, created with techniques of the 1990s? Are you sure about that? I'm sorry, but nothing of what you say follows.
  - RavlaAlvar 7y ago
    A country that still heavily relies on paper document, still using fax machine, and its most popular internet forum has not changed its design since inception. Yes, I would say the innovation in Japan has died out since the bubble.
    - coldtea 7y ago
      Spoken like a person who has never set foot in Japan. LOL. Might as well say the same things for a country that still heavily relies on fossil fuels, still doesn't have high speed rail, still has shitty internet speeds, has crumbling roads and infrastructure, and still uses these horrible air-conditioning units, and wooden (!!!) houses, not to mention their mobile internet situation...
      - JoeSamoa 7y ago
        Can confirm. W t f America.
      - bouncycastle 7y ago
        Sure, the US also had a recession and it shows. But I can vouch for OP what he said about Japan. Once you step outside Tokyo/Osaka in to the smaller cities, you'll see abandoned buildings, crumbling public infrastructure and many people living off government benefits, struggling to make ends meet. Decades of recession have really taken their toll. I wouldn't call that poverty yet, but definitely there's a lot of austerity. The beurocracy is insane. My guess is that the government crept in lots of it because it helps to keep the public servants employed. If you look in to the post office or local government ward office, there is always a whole army of office workers sending away faxes and stamping them, then stapling some papers. (They still use these weird stamps to sign their documents btw) And yes, Japanese still use faxes, drive old taxis and generally you'll see a lot of antiqued technology that still works, but I think that's kind of charming. I especially enjoy seeing some of the old narrow guagae trains still chugging along the country side from time to time (in stark contrast to the shinkansen). Also exiting to see laser disks / VCRs / minidisks when visiting Japanese houses. Just the other day I seen an automated piano controlled by a device which seemed to be reading the data from a 3.5 inch floppy! Sometimes I can spot the odd CRT display still happily flickering, including the old vintage arcade games... The bowling alley down the block still uses what seems to be a DOS based system to manage their displays & business. Visiting a hospital is sometimes like visiting a museum... Oh, btw, got to fly in a Boeing 767 on a domestic route a few months ago, that was a pleasant surprise as I haven't been on one in years!
ricardobeat 7y ago
Unfortunately capitalism, or at at least the systems we built around it, can not be sustainable without growth.
dfischer 7y ago
I think people lose sight that a recession is normal and part of the cycle of boom and bust. Net net it’s always higher but you need a cool-off period.
- MegaButts 7y ago
  > Net net it’s always higher So far this is true for the US, but Japan shows this might not always be the case.
- ionised 7y ago
  The fact the people believe the cycle of boom/bust is somehow an inevitability of life rather than a flaw in our economic ideology is yet another cynical neo-liberal deception of the working and middle classes.
onion2k 7y ago
If output were stable then innovation would only be used to improve the efficiency of production. That would mean fewer jobs producing the same amount of stuff, which would lead to increased inequality (fewer people working and earning compared to people who aren't working). That doesn't sounds like a good thing to me. The societal benefit of "infinite growth" is fully utilising the workforce. If an innovation reduces the number of people needed in a job we can try to grow a different part of the economy to use those people. Unless we can think of a different way to utilise people (eg universal basic income, negative income tax, free stuff for everyone, or something) growth is a useful mechanism to regulate society to an extent.
- coolaliasbro 7y ago
  Output should never be stable in theory as people will not always need the same amounts of the same things. Optimally, output of consumer goods would dwindle if they were made to last as long as possible and convincing people to buy shit they don't need or really even want wasn't a key component of the economy. Also, the notion of "ways to use people" seaks directly to the alienation of labor central to capitalist systems.
mschuster91 7y ago
> There is no need for continuous growth. In the current model of capitalism, yes there is a systemic need for continuous growth - one might say, for VC-style turbo capitalism, there is in fact an even worse need for exponential growth.
sytelus 7y ago
I think you misunderstand "growth" as wall-street profits. The world GDP today is $80T. If you divide that by world's working population (which is ~65% of total population), you will arrive at about $9/hr wage rate for average human. The growth is the improvement in value of time for an average human being. This is obviously very broad view because returns are extremely unevenly distributed but when GDP grows, many people benefit by having their standard of life elevated by that little bump. Continuous growth is what led to dramatic reduction in massive poverty in India and China compared to 1970s and now also starting to take place in Africa. There is most definitely need for continuous growth.
- hnarn 7y ago
  What's interesting is that you don't follow your own reasoning to it's almost completely Marxist end: continuous growth is only necessary _because of_ the extremely uneven distribution of wealth, and it follows that the need for continuous growth is then _exacerbated_ by the continuous increase in income disparity. "(...) Beginning in the 1970s, economic growth slowed and the income gap widened. Income growth for households in the middle and lower parts of the distribution slowed sharply, while incomes at the top continued to grow strongly. The concentration of income at the very top of the distribution rose to levels last seen 90 years ago".[1] [1]: https://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality https://www.cbpp.org/research/poverty-and-inequality/a-guide...
  - kortilla 7y ago
    No, the need for growth is not related to uneven distribution. You can have perfectly even distribution of a really unproductive economy and everyone will be just as poor. If we want to get enough food, shelter, and medicine for the population of the world to just not be in the brink of starvation, homelessness and death from simple diseases, we need more economic growth. The economic output of a society is independent of the wealth distribution mechanisms. We wouldn’t magically gain all of the output we needed by just switching to socialism. A simple example is a workforce building houses without tools and a workforce building houses with tools. The latter will have more economic output than the former and will be better for society overall, regardless of what share of the profits the workers get.
coldtea 7y ago
Continuous growth itself is irrational. But in a system that presupposes "continuous growth" for sustaining itself, and all its structures have been built with that assumption, fear of recession is totally rational.
- NeedMoreTea 7y ago
  Quite. For most of time, up to the 20th century, growth was not an expected part of economic activity. Neither expected or required. GDP didn't even get dreamed up until the 1930s, and its inventor warned against it being used as a measure of the success of a nation. Of course it was soon used as a measure of success, comparison and an easy concept for headlines and politicians. So the irrational belief that infinite growth on a finite planet was not only possible but desirable and necessary became the modern religion. :)
  - JoeSamoa 7y ago
    This... We need to optimize efficiency against known negative externalities better. We need to stop optimizing finance and start optimizing how our business affects all life cycles on the planet.
dragonwriter 7y ago
> Fear of recession is irrational. Not if you rely on selling labor for the income necessary to acquire the needs of daily survival, it isn't.
chewz 7y ago
It seems like a contradiction. Fear of recession is rational due to the world that we have all made - it is built around and addicted to growth, inovation, overconsumption. For zero growth or negative growth world a lot would have to change significantly. From presonal choices to government policies.
ijidak 7y ago
Well, wait. Not taking sides on any particular economic system. But... The global population is growing, correct? So there should be at least some minimal growth to keep up with population growth, no? Otherwise, if there is zero economic growth but a growing population, doesn't that imply increasing poverty?
- lordgrenville 7y ago
  I think this is correct, and answers the common question of "how do we expect growth to go on indefinitely?" It follows from this that as we get to the stage where the global population starts to shrink we will not require constant growth. Of course then we will have the serious issue of how to fund people past retirement age as population shrinks.
  - gmueckl 7y ago
    Funding retirement in an inverted age pyramid is not a theoretical problem. Germany is facing this problem already and it is going to get much, much worse in the next 10 years. As a side note, this inverted age pyramid aligns partially with a unbalanced power distribution as old people outvote younger generations and their interests by a wide margin.
    - lordgrenville 7y ago
      Yeah. I didn't mean to imply this is only a future problem, just that it will most likely eventually affect the entire global population.
zerogvt 7y ago
Speaking reasonably and from an ecologic point of view you're 100% right. But for the current economic system simple sustenance, i.e. not growing, is similar to death. It's much like a shark, if it stops moving it cannot breathe. I think a lot of it is down to being powered by loans which in essence can be paid back only if the total output grows. Imagine a bank that lends you 100K to set up a business. You'll pay back eventually more than you initially got -say 130K- over a period of the next 10 yrs. The extra 30K will only appear in the economy somewhere if the economy grows. At least that's how this game is supposed to be played.
- dragandj 7y ago
  If you set up a business, instead of just burning the loan, shouldn't that new business expand the economy just a little?
  - JoeSamoa 7y ago
    It should, but there is some predatory spending going on that is actually shrinking the economy because of inequality. How fun is a poker game at the end of the night when one guy has all the chips? Everyone usually goes home or takes on debt to double down in a drunk stupor.
smcl 7y ago
This is an incredibly blinkered viewpoint. Sure if you're insulated from the effects of economic downturns (you have a secure job or no dependents, and you have a lot of savings and a diverse investment portfolio, and you're healthy and/or have no need to worry about losing health insurance benefits) then sure, you can relax and tell yourself that everything will work out alright in the end. However the reality is that recessions mean a lot of suffering and uncertainty for a sizeable chunk of the population. Pretending this isn't the case is extremely bizarre.
- RickJWagner 7y ago
  You're right. I sometimes feel conflicted about bad economic news-- a lot of my reading materials suggest this is 'good', because it's an opportunity to buy distressed assets and make more money. Then I think about the cost to others, and I realize I'd rather not make the money and let others have an easier time of it.
- gehwartzen 7y ago
  I think it can be a fairly reasonable viewpoint; there are many systems where "downturn" type events are good for the system as a whole and also disproportionally good to some members. A natural forest fire is good for the forest from time to time, good for certain well established individual trees, and good for future generations but of course terrible for those trees that get culled out.
  - oblio 7y ago
    The issue with this is that there's a lot of "culling" happening during these recessions. And people aren't trees.
    - umvi 7y ago
      Right but we aren't incinerating people during the culling. Very few (if any) people actually die compared to trees in a forest fire.
      - 7y ago
naravara 7y ago
There is a need for continuous rent/mortgage payments, availability of food in the pantry, debt repayments, and health insurance though. Have you considered that people might not want to lose their jobs in a contraction?
challenger22 7y ago
People die due to the lower economic output of a recession. Lower GDP is a sign that we are not solving the world's problems as quickly as we had been previously. There are real negatives to be feared. https://www.businessinsider.com/study-recessions-unemployment-mortality-rates-2015-10/ https://www.businessinsider.com/study-recessions-unemploymen...
- Dumblydorr 7y ago
  Yeah, very true. We would expect a rise in suicidality in white males in USA, for instance, as has already been happening due to hollowed out midwestern economics and ongoing opioid crisis.
jayalpha 7y ago
"There is no need for continuous growth." ROTFL. Good luck with that mate. Show me how this is going to work. The Nobel prize in economics is yours for sure! https://ourfiniteworld.com/2011/02/21/there-is-no-steady-state-economy-except-at-a-very-basic-level/ https://ourfiniteworld.com/2011/02/21/there-is-no-steady-sta...
- baq 7y ago
  I see your economic argument and raise you a thermodynamics one. https://dothemath.ucsd.edu/2011/07/galactic-scale-energy/ https://dothemath.ucsd.edu/2011/07/galactic-scale-energy/
  - jayalpha 7y ago
    I have used this link too here. The Link is basically identical, if you take this into consideration: https://www.declineoftheempire.com/2012/01/wealth-and-energy-consumption-are-inseparable.html https://www.declineoftheempire.com/2012/01/wealth-and-energy...

I like this sentence. Please elaborate or give some links, I would like to read more. Edit: why the downvotes? I am sincerely interested to read more about the necessity of growth or the lack of it.

frozenport 7y ago
https://en.m.wikipedia.org/wiki/Voluntary_Human_Extinction_Movement https://en.m.wikipedia.org/wiki/Voluntary_Human_Extinction_M...

carlmr 7y ago

I get where you come from. You have to see though that for a lot of people recession means losing their jobs, being unable to provide for their families, etc. The fear of recession is entirely rational for anyone without a savings account covering the next 2 years.

ironic_ali 7y ago
Everyone should be spreading their savings around different banks. Banks will only pay back a certain amount if they go bust - and it depends on the country how much that is.
- mschuster91 7y ago
  > Everyone should be spreading their savings around different banks. Which savings? 60% of the US population has less than 1.000 $ in liquid savings per [1]. In Germany it's 33% per [2]. When the recession hits (not if but when) people are going to get fucked. The 2008 crisis wiped out what many people had and its aftermath left them unable to rebuild their savings, and social security institutions have been wrecked since neoliberalism took over - I certainly expect (food) riots once recession hits. The Yellow Vests in France are an example what a still relatively rich but angry population can do, and extrapolating from that reveals a not very nice future. [1]: https://www.cbsnews.com/news/most-americans-couldnt-cover-a-1000-expense/ https://www.cbsnews.com/news/most-americans-couldnt-cover-a-... [2]: https://www.focus.de/finanzen/news/finanzen_news_armut_in_deutschland/armutsgefaehrdung-in-deutschland-fast-ein-drittel-kann-sich-unerwartete-ausgaben-unter-1000-euro-nicht-leisten_id_8805287.html https://www.focus.de/finanzen/news/finanzen_news_armut_in_de...
  - TheSpiceIsLife 7y ago
    How deep, how rapid, and where, does recession need to be in order for there to be food riots?
    - carlmr 7y ago
      https://www.thetimes.co.uk/article/britain-four-meals-away-from-anarchy-fc9kfgc0w92 https://www.thetimes.co.uk/article/britain-four-meals-away-f...
      - TheSpiceIsLife 7y ago
        Firstly, if you’re going to post a link it’d be helpful if you elaborate why you believe the content of the link supports or refutes your claim. Secondly, the link you provided states “in the event of a catastrophe that stops the supply of food”. Is a recession a food supply halting catastrophe?
        carlmr 7y ago
        I didn't make a claim, so I don't need to support or refute it. But back to the point. Not having money is functionally the same as stopping your supply of food. So if the recession is deep enough that enough people can't buy food anymore there may be riots and looting. Above posters said that 60% of Americans don't have meaningful savings. That would mean in the event that they can't afford food, more than half of America might start a revolt. (Of course depending on the size of the recession).
        TheSpiceIsLife 7y ago
        My point is: you’re confusing catastrophe with recession. In a food supply halting catastrophe we’ve got problems, catastrophic problems. A recession that hits any significant portion of the population will have political-will to find alternative outcomes, and probably won’t happen with the rapidity catastrophes are usually associated with. Eg. food aid, wealth redistribution, easy / no-interest credit, government jobs. I’m not saying any and every political outcome won’t result in a catastrophe, but every food halting catastrophe is, by definition, a massive catastrophe. You may have a wider point though: just in time manufacturing / delivery in the food industry means probably most of the world is a few meals away from panic.
- coldtea 7y ago
  >Everyone should be spreading their savings around different banks. Depending on the country this will not save you. You can have it in N banks, and still get back up to a fixed X amount, because the amount is per person, not per account. And this assumes people have "savings". Most people outside of the 10% echo chamber live paycheck to paycheck. https://www.cnbc.com/2019/01/09/shutdown-highlights-that-4-in-5-us-workers-live-paycheck-to-paycheck.html https://www.cnbc.com/2019/01/09/shutdown-highlights-that-4-i... https://money.cnn.com/2018/05/22/pf/emergency-expenses-household-finances/index.html https://money.cnn.com/2018/05/22/pf/emergency-expenses-house... https://www.bankrate.com/banking/savings/financial-security-january-2019/ https://www.bankrate.com/banking/savings/financial-security-...
- skybrian 7y ago
  For the U.S. it's $250,000 so most people in the U.S. won't have to worry about this.

choeger 7y ago

If there shall be no growth, there may be no innovation. Essentially every product and service has to be created the same way, using the same amount if manual labor, as yesteryear. Economical growth is not necessarily growth in consumption of resources. It is also a measure of getting more out of less.

NeedMoreTea 7y ago
I see, so there has been no new Japanese product or innovation during the 20 or 30 years of Japanese deflation? Every car is from 1990, every CD walkman still available, created with techniques of the 1990s? Are you sure about that? I'm sorry, but nothing of what you say follows.
- RavlaAlvar 7y ago
  A country that still heavily relies on paper document, still using fax machine, and its most popular internet forum has not changed its design since inception. Yes, I would say the innovation in Japan has died out since the bubble.
  - coldtea 7y ago
    Spoken like a person who has never set foot in Japan. LOL. Might as well say the same things for a country that still heavily relies on fossil fuels, still doesn't have high speed rail, still has shitty internet speeds, has crumbling roads and infrastructure, and still uses these horrible air-conditioning units, and wooden (!!!) houses, not to mention their mobile internet situation...
    - JoeSamoa 7y ago
      Can confirm. W t f America.
    - bouncycastle 7y ago
      Sure, the US also had a recession and it shows. But I can vouch for OP what he said about Japan. Once you step outside Tokyo/Osaka in to the smaller cities, you'll see abandoned buildings, crumbling public infrastructure and many people living off government benefits, struggling to make ends meet. Decades of recession have really taken their toll. I wouldn't call that poverty yet, but definitely there's a lot of austerity. The beurocracy is insane. My guess is that the government crept in lots of it because it helps to keep the public servants employed. If you look in to the post office or local government ward office, there is always a whole army of office workers sending away faxes and stamping them, then stapling some papers. (They still use these weird stamps to sign their documents btw) And yes, Japanese still use faxes, drive old taxis and generally you'll see a lot of antiqued technology that still works, but I think that's kind of charming. I especially enjoy seeing some of the old narrow guagae trains still chugging along the country side from time to time (in stark contrast to the shinkansen). Also exiting to see laser disks / VCRs / minidisks when visiting Japanese houses. Just the other day I seen an automated piano controlled by a device which seemed to be reading the data from a 3.5 inch floppy! Sometimes I can spot the odd CRT display still happily flickering, including the old vintage arcade games... The bowling alley down the block still uses what seems to be a DOS based system to manage their displays & business. Visiting a hospital is sometimes like visiting a museum... Oh, btw, got to fly in a Boeing 767 on a domestic route a few months ago, that was a pleasant surprise as I haven't been on one in years!

ricardobeat 7y ago

Unfortunately capitalism, or at at least the systems we built around it, can not be sustainable without growth.

dfischer 7y ago

I think people lose sight that a recession is normal and part of the cycle of boom and bust. Net net it’s always higher but you need a cool-off period.

MegaButts 7y ago
> Net net it’s always higher So far this is true for the US, but Japan shows this might not always be the case.
ionised 7y ago
The fact the people believe the cycle of boom/bust is somehow an inevitability of life rather than a flaw in our economic ideology is yet another cynical neo-liberal deception of the working and middle classes.

onion2k 7y ago

If output were stable then innovation would only be used to improve the efficiency of production. That would mean fewer jobs producing the same amount of stuff, which would lead to increased inequality (fewer people working and earning compared to people who aren't working). That doesn't sounds like a good thing to me. The societal benefit of "infinite growth" is fully utilising the workforce. If an innovation reduces the number of people needed in a job we can try to grow a different part of the economy to use those people. Unless we can think of a different way to utilise people (eg universal basic income, negative income tax, free stuff for everyone, or something) growth is a useful mechanism to regulate society to an extent.

coolaliasbro 7y ago
Output should never be stable in theory as people will not always need the same amounts of the same things. Optimally, output of consumer goods would dwindle if they were made to last as long as possible and convincing people to buy shit they don't need or really even want wasn't a key component of the economy. Also, the notion of "ways to use people" seaks directly to the alienation of labor central to capitalist systems.

mschuster91 7y ago

> There is no need for continuous growth. In the current model of capitalism, yes there is a systemic need for continuous growth - one might say, for VC-style turbo capitalism, there is in fact an even worse need for exponential growth.

sytelus 7y ago

I think you misunderstand "growth" as wall-street profits. The world GDP today is $80T. If you divide that by world's working population (which is ~65% of total population), you will arrive at about $9/hr wage rate for average human. The growth is the improvement in value of time for an average human being. This is obviously very broad view because returns are extremely unevenly distributed but when GDP grows, many people benefit by having their standard of life elevated by that little bump. Continuous growth is what led to dramatic reduction in massive poverty in India and China compared to 1970s and now also starting to take place in Africa. There is most definitely need for continuous growth.

hnarn 7y ago
What's interesting is that you don't follow your own reasoning to it's almost completely Marxist end: continuous growth is only necessary _because of_ the extremely uneven distribution of wealth, and it follows that the need for continuous growth is then _exacerbated_ by the continuous increase in income disparity. "(...) Beginning in the 1970s, economic growth slowed and the income gap widened. Income growth for households in the middle and lower parts of the distribution slowed sharply, while incomes at the top continued to grow strongly. The concentration of income at the very top of the distribution rose to levels last seen 90 years ago".[1] [1]: https://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality https://www.cbpp.org/research/poverty-and-inequality/a-guide...
- kortilla 7y ago
  No, the need for growth is not related to uneven distribution. You can have perfectly even distribution of a really unproductive economy and everyone will be just as poor. If we want to get enough food, shelter, and medicine for the population of the world to just not be in the brink of starvation, homelessness and death from simple diseases, we need more economic growth. The economic output of a society is independent of the wealth distribution mechanisms. We wouldn’t magically gain all of the output we needed by just switching to socialism. A simple example is a workforce building houses without tools and a workforce building houses with tools. The latter will have more economic output than the former and will be better for society overall, regardless of what share of the profits the workers get.

coldtea 7y ago

Continuous growth itself is irrational. But in a system that presupposes "continuous growth" for sustaining itself, and all its structures have been built with that assumption, fear of recession is totally rational.

NeedMoreTea 7y ago
Quite. For most of time, up to the 20th century, growth was not an expected part of economic activity. Neither expected or required. GDP didn't even get dreamed up until the 1930s, and its inventor warned against it being used as a measure of the success of a nation. Of course it was soon used as a measure of success, comparison and an easy concept for headlines and politicians. So the irrational belief that infinite growth on a finite planet was not only possible but desirable and necessary became the modern religion. :)
- JoeSamoa 7y ago
  This... We need to optimize efficiency against known negative externalities better. We need to stop optimizing finance and start optimizing how our business affects all life cycles on the planet.

dragonwriter 7y ago

> Fear of recession is irrational. Not if you rely on selling labor for the income necessary to acquire the needs of daily survival, it isn't.

chewz 7y ago

It seems like a contradiction. Fear of recession is rational due to the world that we have all made - it is built around and addicted to growth, inovation, overconsumption. For zero growth or negative growth world a lot would have to change significantly. From presonal choices to government policies.

ijidak 7y ago

Well, wait. Not taking sides on any particular economic system. But... The global population is growing, correct? So there should be at least some minimal growth to keep up with population growth, no? Otherwise, if there is zero economic growth but a growing population, doesn't that imply increasing poverty?

lordgrenville 7y ago
I think this is correct, and answers the common question of "how do we expect growth to go on indefinitely?" It follows from this that as we get to the stage where the global population starts to shrink we will not require constant growth. Of course then we will have the serious issue of how to fund people past retirement age as population shrinks.
- gmueckl 7y ago
  Funding retirement in an inverted age pyramid is not a theoretical problem. Germany is facing this problem already and it is going to get much, much worse in the next 10 years. As a side note, this inverted age pyramid aligns partially with a unbalanced power distribution as old people outvote younger generations and their interests by a wide margin.
  - lordgrenville 7y ago
    Yeah. I didn't mean to imply this is only a future problem, just that it will most likely eventually affect the entire global population.

zerogvt 7y ago

Speaking reasonably and from an ecologic point of view you're 100% right. But for the current economic system simple sustenance, i.e. not growing, is similar to death. It's much like a shark, if it stops moving it cannot breathe. I think a lot of it is down to being powered by loans which in essence can be paid back only if the total output grows. Imagine a bank that lends you 100K to set up a business. You'll pay back eventually more than you initially got -say 130K- over a period of the next 10 yrs. The extra 30K will only appear in the economy somewhere if the economy grows. At least that's how this game is supposed to be played.

dragandj 7y ago
If you set up a business, instead of just burning the loan, shouldn't that new business expand the economy just a little?
- JoeSamoa 7y ago
  It should, but there is some predatory spending going on that is actually shrinking the economy because of inequality. How fun is a poker game at the end of the night when one guy has all the chips? Everyone usually goes home or takes on debt to double down in a drunk stupor.

smcl 7y ago

This is an incredibly blinkered viewpoint. Sure if you're insulated from the effects of economic downturns (you have a secure job or no dependents, and you have a lot of savings and a diverse investment portfolio, and you're healthy and/or have no need to worry about losing health insurance benefits) then sure, you can relax and tell yourself that everything will work out alright in the end. However the reality is that recessions mean a lot of suffering and uncertainty for a sizeable chunk of the population. Pretending this isn't the case is extremely bizarre.

RickJWagner 7y ago
You're right. I sometimes feel conflicted about bad economic news-- a lot of my reading materials suggest this is 'good', because it's an opportunity to buy distressed assets and make more money. Then I think about the cost to others, and I realize I'd rather not make the money and let others have an easier time of it.
gehwartzen 7y ago
I think it can be a fairly reasonable viewpoint; there are many systems where "downturn" type events are good for the system as a whole and also disproportionally good to some members. A natural forest fire is good for the forest from time to time, good for certain well established individual trees, and good for future generations but of course terrible for those trees that get culled out.
- oblio 7y ago
  The issue with this is that there's a lot of "culling" happening during these recessions. And people aren't trees.
  - umvi 7y ago
    Right but we aren't incinerating people during the culling. Very few (if any) people actually die compared to trees in a forest fire.
    - 7y ago

naravara 7y ago

There is a need for continuous rent/mortgage payments, availability of food in the pantry, debt repayments, and health insurance though. Have you considered that people might not want to lose their jobs in a contraction?

challenger22 7y ago

People die due to the lower economic output of a recession. Lower GDP is a sign that we are not solving the world's problems as quickly as we had been previously. There are real negatives to be feared. https://www.businessinsider.com/study-recessions-unemployment-mortality-rates-2015-10/ https://www.businessinsider.com/study-recessions-unemploymen...

Dumblydorr 7y ago
Yeah, very true. We would expect a rise in suicidality in white males in USA, for instance, as has already been happening due to hollowed out midwestern economics and ongoing opioid crisis.

jayalpha 7y ago

"There is no need for continuous growth." ROTFL. Good luck with that mate. Show me how this is going to work. The Nobel prize in economics is yours for sure! https://ourfiniteworld.com/2011/02/21/there-is-no-steady-state-economy-except-at-a-very-basic-level/ https://ourfiniteworld.com/2011/02/21/there-is-no-steady-sta...

baq 7y ago
I see your economic argument and raise you a thermodynamics one. https://dothemath.ucsd.edu/2011/07/galactic-scale-energy/ https://dothemath.ucsd.edu/2011/07/galactic-scale-energy/
- jayalpha 7y ago
  I have used this link too here. The Link is basically identical, if you take this into consideration: https://www.declineoftheempire.com/2012/01/wealth-and-energy-consumption-are-inseparable.html https://www.declineoftheempire.com/2012/01/wealth-and-energy...