Chapter 3
Economic Growth
I think it is fair to say that the Romans in the first century A.D. did not know what we now call ‘‘economics.’’ They measured their wealth by military exploits and the capture of slaves as a key source of energy. If they did have ‘‘economic growth’’ it must have been severely restricted since they did all their record keeping and accounting for the huge Roman Empire using Roman numerals, which is quite amazing! It was the Arabs that introduced arithmetic with the zero.
But since the industrial revolution, the Western countries discovered the means of increasing the nation’s wealth by manufacturing and trading in both goods and services. Capitalism was born and the standard of living of the citizen has continually increased. The question then arises, can economic growth go on forever? Is "sustai able growth" an oxymoron?
A search of the Internet shows a large number of references to economic growth and its possible consequences. When I sat down to rewrite an early draft of this Chapter, I had a new and disturbing insight. Granted that economic growth, as we have known it, cannot go on forever, then how would it ever be possible to slow it down? By legislation? I guess not. By popular agreement of the citizens? Equally unlikely. Therefore it must be thrust upon us, perish the thought. Or, change the nature of economic growth to one of less consumption of resources and sources of pollution. The information society is an example of such a concept. However, for the moment let us put aside that prospect and see what certain authors, starting from the early years, have said about economic growth.
It begins with Adam Smith and his book, TheWealth of Nations published in England in 1776.1)
Adam Smith
Smith is said to be the first political economist who wrote of economics. It was part of his work as a Scottish professor of philosophy. One of his basic principles was that the marketplace is driven by self-interest and that this should not be constrained by the setting of rules or political legislation. There is, as he says in his book, an ‘‘invisible hand’’ at work in the supply and demand and the setting of prices of goods and services. To quote The Wealth of Nations 1) on this:
‘‘Every individual necessarily labours to render the annual revenue of the society as great as he can. He generally indeed neither intends to promote the public interest, nor knows how much he is promoting it. He intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. By pursuing his own interest he frequently pro- motes that of the society more effectually than when he really intends to promote it.’’
As for men to try to control the marketplace, he does not favour it.
‘‘It is the highest impertinence and presumption, therefore, in kings and ministers to pretend to watch over the economy of private people, and to restrain their expense.’’
Smith was greatly influenced by the situation he observed in France where citizens at the time were under a very heavy tax burden and miserably poor. This situation eventually brought on the French Revolution and the rise of Napoleon.
Smith did not see the long range view of economic growth consuming nature’s basic resources. Interesting that Malthus did see a limit to population, but Smith did not see an eventual limit to economic growth. What he pointed out was the incentive that was the driving force of such growth self-interest of individuals and corporations, and he encouraged that! And little has changed to this day.
Jonas and Jonathan Salk
As pointed out in the previous Chapter, the Salks had a unique approach to the future in that they say that to reduce population from what they call Epoch A to Epoch B would require a major shift in the behaviour of people from competition to cooperation. This would