When talking about “growth”, you do have to understand what it is that is growing, as Eli points out on a recent thread. What economists and politicians want to grow is the velocity of money exchanges. This is primarily because that is where all three good things, public revenue, profit and employment, come from. This is called the “gross product”, the total of all financial transactions.
Many of the transactions are destructive, but there is enormous pressure to continue. Without being on the selling side of transactions, you are not allowed to be on the buying side. And without being on the buying side, you are essentially not allowed any resources at all, except marginal castoffs.
We have paid very little attention to encouraging that such exchanges actually tend to have a net positive value.
Kindle replaces books at lower capital cost. The paper industry loses jobs. The economy shrinks. The environment benefits. We are better off if we aren’t in the paper or ink business. It counts as negative growth.
Craig’s list replaces a key profit center of newspapers. Reporters lose jobs, but the rest of us find buyers and sellers of used furniture. New furniture manufacturers face a shrinking market. Negative growth for newspapers, for furniture, for hardwood, for softwood. Consumers are better off for it. It counts as negative growth, contraction.
State and federal taxes are cut, reducing police services in a neighborhood. The neighborhood declines. People who can afford to do so move out at the cost of expense and disruption. Buildings are abandoned and fall into ruin, while new buildings are constructed in the new neighborhood. This is growth.
When this happens you are likely to get a job. When you get a job, you are selling something (your efforts). When you sell things you get to buy things. If you don’t get to buy things you are not entitled to them. Therefore you demand policies that create jobs. But nobody checks to see if these jobs are actually a good idea.
The more we successfully replace material goods with ethereal goods, the more jobs will be lost. Thus the more demand there will be to construct conditions where there are more jobs. If we are not careful (and apparently we are not careful) the new jobs are as destructive as the old ones or more so.
The idea that we are in poverty in America is ridiculous. Demand is declining because people have the stuff they want. The problems we are seeing are because we live in a system designed to cope with scarcity encountering surplus. Yet almost everybody wants to restimulate demand.
I’m sorry. I’m still not getting it.