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Is it just me, or is "lack of growth, but no negative growth" being considered "recession" now? Sounds stupid to me, if so. Because we can't keep growing indefinitely. Even if we expand out into outer space, all over the galaxy and beyond, eventually we are going to run out of ability to grow the economy. So why can't we consider "no growth either direction" to be good enough?

Not saying we're at that point yet, because there did seem to be a huge uptick of negative growth at one point, but from some comments people were making it gave the impression that the only good state for the economy, in their opinion, was positive growth. That in their opinion, anything other than expansion and growth was BAD and a recession.

Crossposted from http://fayanora.dreamwidth.org

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( 10 comments — Leave a comment )
baron_waste
Oct. 19th, 2010 01:57 am (UTC)

So long as population continues to grow, the economy must also, else the new numbers are not supplied. That's the basic idea. The fact that we've about reached the limits of growth on this planet, that we're bumping the ceiling so to speak, is what's causing difficulties. If Earth were merely an island on a megacontinent the size of Jupiter (somehow) there'd be no talk of 'recession.' Not in our lifetimes.

underlankers
Oct. 19th, 2010 02:15 am (UTC)
But when you consider that population is actually *declining* in some of the EU countries then it's fair to ask what that means for the whole "exceeding carrying capacity" idea. Especially since IIRC Mexico's birth rate is now on par with the EU countries. The immigration wasn't caused by surplus of population but the aftermath of the NAFTA set-up doing exactly what it was going to do.

OTOH, economic growth for the USA is going to be a lot harder now that some of those economic regions that up and blew themselves up in two big wars are actually gathering steam again. It's easy to grow an economy when everyone is so devastated they depend on yours to help rebuild. Now that they don't, that requires actual skills on the part of a political class mainly interested in subsidizing the upper upper class.
baron_waste
Oct. 19th, 2010 12:55 pm (UTC)

If by this and your similar comment below you are referring to World War II - as you obviously are - um… Are you aware that the war ended sixty-five years ago? And you're claiming the Marshall Plan nations are only recovering now? This is about on a par with saying that today's economic problems are a direct result of the Panic of 1873. (It would also be a major surprise to both West Germany and Japan, who had both recovered spectacularly by 1960…)

This is not to say that the war is not involved; President Roosevelt found the war a marvelous opportunity and excuse to explosively increase the scope and power of the Federal Government, throwing a burden of regulation and taxation on an economy that was indeed so robust that it withstood it easily… for a while. But the Federal budget - every cent of which comes from confiscatory taxation, drained from the nation's bloodstream - grew and grew beyond computation, the regulations it enforced grew and grew beyond comprehension, even as the labor unions who supported - and were supported by - that Government grew and grew… and sure enough, factories started closing all across America as companies began moving their operations overseas. *

In 1949 over half of all manufactured goods in the world were made in the USA. Today… “Made in China” is what you'll find on nearly every item in retail stores. Because the companies who used to have factories here, find it cheaper and easier to ship the materials overseas, have the products manufactured there, and ship them back.

That's not economic competition, it's distortion. Business - capitalism - finds a way to work, no matter what contortions governments put it through.



*I have a Reader's Digest from 1964 with an article indignantly describing the intrusive, unconstitutional new Federal bureaucracy being considered, the so-called “Equal Employment Opportunity Commission,” which would - by Federal mandate! - tell employers who they had to hire, who they could not fire, how much they had to pay… none of which was or was ever meant to be the business of the Federal Government! Surely, the Digest said, surely Americans would not stand for this!

underlankers
Oct. 19th, 2010 04:04 pm (UTC)
No, I'm referring to the areas affected by colonialism and the Soviet Empire. Colonialism was an utter catastrophe everywhere it went, and it was for the United States a blessing as it meant no serious competition for a time from the Indian and Chinese subcontinents. Nowadays both India and China are able to actually make good use of what they have and along with the EU are economic rivals at least on par with the United States.

The revival of India and China also has the obvious point that is obvious, namely that the United States, the most powerful state in North American history, exists in a continent that for most of human history was a backwater to which only Australia exceeded it. With the revival of China and India as their usual economic forces and whenever a Russian leadership shows up that has a bit more economic savvy than Putin the USA will be marginalized not by virtue of its decline but the return of everyone else.
baron_waste
Oct. 19th, 2010 05:07 pm (UTC)
That's an interesting distinction. I do not have the time to pursue that further now, but I will leave you with a differing opinion on the “uttercatastrophe” of colonialism:

“African leaders are quick to blame the legacy of colonialism for their troubles. I'll never make an argument for colonialism but the fact of business is that the average African was better off under colonialism than he has been under independence. For example, when Zaire became in independent in 1960, it had 31,000 miles of main roads; today, less than 3,500 remain usable. Before independence, every African country was self-sufficient in food production; today most depend on imports and others stand at the brink of famine. At the time of independence, the average growth rate among African countries was three percent. By 1980, it had fallen to one percent and by 1990, a negative 2.8 percent. By contrast, African countries with a greater measure of freedom and stability, Botswana, Mauritius, Cameroon and Senegal, have growth rates of 8, 4.4, 4.5 and 1 percent, respectively.

“People who think more foreign aid is the solution should know that the money either winds up in the hands of the elite and deposited in Swiss bank accounts or it's used to pay bribes to keep corrupt governments in power. Some African chiefs of states are among the world's richest men, such as Zaire's recently deposed Mobutu. If foreign aid doesn't fall into the hands of kleptocrats, it's used in ways that'd make a lunatic blush such as status symbols, factories and other projects of little or no use.

“The legacy of colonialism, used so often by Africans, is a sham excuse that can't hold water. After all some of the world's richest countries like the United States, Canada, Australia, New Zealand and Hong Kong were colonies. What's true about those ex-colonies that's untrue about Africa? The answer is a no-brainer. There's a greater measure of personal liberty, more secure private property rights, more limited and honest government and rule of law...”

Walter Williams, “The Tragedy Called Africa”
underlankers
Oct. 19th, 2010 05:38 pm (UTC)
And this is why you never debate this kind of thing with me.

First point-it has everything to do with their troubles. The new African states on the whole were formed after bitter wars that tended to blend in with Cold War proxy wars. Wars create financial and humanitarian catastrophes. For new countries, well.....and you add that colonial economic and political structures were altered at the whim of the colonial powers for the benefit of the new elite and to Hell with whether or not it made sense or not....

Botswana is the rare case of a country lightly touched by colonialism. Most African countries were ruled at gunpoint and de-colonization as noted produced lengthy wars that played a major role in wrecking the local economies even worse than the colonial rule did.

The first four are all also settler countries that happened to either nearly annihilate the Indigenous peoples (Canada, USA, and Australia) or subject them to second-class states (New Zealand). Hong Kong was an exception and like Singapore is easier to manage. And in the United States also the colonials overthrew the distant central government in something more like Britain being booted out of South Africa which led to enhancing already-existing problems into something far, far worse.
my_real_head
Oct. 19th, 2010 02:19 am (UTC)
The problem is that a capitalist economy depends on growth in order to work.

A friend described it to me like the game Monopoly. It's a capitalist economy without growth. Eventually the money runs out after only one person has it all. If you played Monopoly and kept adding money and players, it would never end.
underlankers
Oct. 19th, 2010 02:26 am (UTC)
The bigger problem at least for the USA is that its economic power was in large part an accident of being the only country to leave WWII better-off than it entered it. After most of the world was leveled and accepted US investment (the major exception the COMECON/Warsaw Pact) growing the economy was easy enough a Sahelanthropus could do it. Now it's harder because we have actual economic competitors again, something that hasn't been true since before WWII.
weishaupt
Oct. 19th, 2010 05:38 am (UTC)
The economy is based on so many stupid, irrational, self-centered and spiritually void assumptions that I think I will go and beat my head against a wall instead of thinking about it.
jonamo_cat
Oct. 20th, 2010 03:56 pm (UTC)

without the idea of growth there is no ego boost to the idea of investing

and so people who live through money become depressed

and everyone waitsarround, while the rich, like camels leading the thirsty to dried up wells, console their egos in how much worse off everyone else is

and once their egos recover eventualy so does the economy
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