Growth Is Associated With Prosperity

By Author: allan
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vIn most people's mind, growth is associated with prosperity. We judge how well the economy is doing by the size of the Gross National Product (GNP), a measure, supposedly, of growth. Equally axiomatic, however, is the notion that increased pressure on dwindling natural resources must inevitably lead to a decline in prosperity, especially when accompanied by a growth in population. So, which is correct?

What growth advocates mean, primarily, when they say growth is necessary for prosperity is that growth is necessary for the smooth functioning of the economic system. In one arena the argument in favor of growth is particularly compelling and that is with regard to the Third World. To argue against growth, other than population growth, in light of Third World poverty and degradation, seems callous. But is it? Could it be that growth, especially the growth of the wealthier countries, has contributed to the impoverishment, not the advancement, of Third World countries? If not, how do we account for the desperate straits these countries find themselves in today after a century of dedication to growth?

To see how this ...
... might be the case we must look at the impact of growth on Third World countries — the reality, not the abstract stages-of-economic-growth theory advocated through rose-colored glasses by academicians of the developed world. What good is growth to the people of the Third World if it means the conversion of peasant farms into mechanized agri-businesses producing commodities not for local consumption but for export, if it means the stripping of their land of its mineral and other natural treasures to the benefit of foreign investors and a handful of their local collaborators, if it means the assumption of a crushing foreign indebtedness, the proceeds of which goes not into the development of the country but into the purchase of expensive cars and the buying of luxurious residence in Miami?

Admittedly, this is an oversimplification. But the point, I believe, remains valid: that growth in underdeveloped countries cannot simply be judged in the abstract; it must be judged based on the true nature of growth in these societies, on who benefits and who is harmed, on where growth is leading these people and where it has left them. When considered in this way, it just might be that in the present context growth is more detrimental to the well-being of the wretched of the earth than beneficial.

So, do we need growth for prosperity? Only the adoption of zero growth can provide the answer. But that is a test not easily undertaken. Modern economies are incredibly complex phenomena, a tribute to man's ability to organize and a challenge to his ability to understanding. Anything that affects their functioning, such as a policy of zero growth, should not be proposed without a wary prudence and a self-doubting humility. But if the prospect of leaping into the economic unknown is fear-inspiring, equally so is the prospect of letting that fear prevent us from acting when the failure to act could mean untold misery for future generations and perhaps environmental catastrophes which threaten our very existence. 1. Which of the following statements does the author support?