Slow growth fetish

MarketWatch -- What do we do now, oh great Zen master? His sage advice to economists, politicians and investors everywhere: "The future ain't what it used to be. We made too many wrong mistakes. You've got to be very careful if you don't know where you're going, because you might not get there. At the crossroads: Growth!

Critics have long questioned the feasibility and desirability of exponential growth on a finite planet. Declining growth rates have in their turn been identified as instrumental in increased inequality and the rise of political populism. This paper explores these emerging arguments paying a particular attention to the dynamics of secular stagnation. It explores the underlying phenomenon of declining labour productivity growth and unpacks the close relationships between productivity growth, the wage rate and social inequality. It also points to the historical congruence and potential causal links between declining productivity growth and resource bottlenecks. Contrary to some mainstream views, this paper finds no inevitability in the rising inequality that has haunted advanced economies in recent decades, suggesting instead that it lies in the pursuit of growth at all costs, even in the face of challenging fundamentals. This strategy has hindered technological innovation, reinforced inequality and exacerbated financial instability.

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The relentless pursuit of GDP growth is being challenged from environmental and well-being standpoints. But where did the idea come from? The politics of economic growth are complex and contested as never before.