Dangerous Addiction?

by Art Woolf

Here at Vermont Tiger, we believe that economic growth, as Martha Stewart would say, is "a good thing."  Growth has led to wondrous things:  electricity, aspirin, automobiles, iPods, cell phones, antibiotics, airplanes, computers, television and radio, wrinkle free clothing, fresh fruits and vegetables available year-round, comfortable homes with heating and air conditioning, safer food supplies, lower childhood mortality, increasing life expectancy, pop top beer cans, and a host of other inventions that have made our lives better, safer, healthier, and more enjoyable.

Not everyone agrees. 

I was leafing through a publisher's catalogue and found a book review with this quote by Robert Costanza, a professor of ecological economics at UVM:

Overcoming our addiction to economic growth is one of the most important challenges for the 21st century. Peter Victor’s masterful summary of the history and fallacies of this particularly pervasive and increasingly dangerous addiction will be a great help in getting over it.

An online dictionary defines addiction as

compulsive need for and use of a habit-forming substance (as heroin, nicotine or alcohol)  characterized by tolerance and by well-defined physiological symptoms upon withdrawal;

broadly : persistent compulsive use of a substance known by the user to be harmful

Does Professor Costanza really think that the beneficiaries of economic growth know it to be harmful to themselves?  Or is it just Professor Costanza who thinks economic growth is harmful to all of us?  And does he really believe that economic growth is like heroin?  I thought it was pretty bizarre when President Bush called for an end to our "addiction to oil," and this is equally bizarre to me.

Economic growth allows us to devote our scarce resources to the production of new goods and services without producing less of something else.  That means a lot to some people, including billions of extremely poor people worldwide, but also to many people here in the U.S.  The only other way to devote more resources to new goods is to devote less to something else.  You can have a bigger slice of the pie if the pie is getting bigger or by forcing someone else to have a smaller piece.

Last weekend, my wife and I attended a fundraiser for neuroblastoma research.  NB is a rare, and usually fatal, cancer that primarily occurs in very young children   It turns out that Fletcher Allen Health Care is one of the leading research institutions in the nation at developing drugs to fight NB.   Economic growth means that we have more resources available to research and fight disease like NB.  I hope that we never get over our addiction to it.

Comments

[Dennis Lukas]

It is nice to see another UVM professor supporting a socialist agenda. Peter Victor in a direct quote, considers John Maynard Keynes and Karl Mark two of the greatest ecomomists.Keynes, Keynesian ecomomics, in short, says the government must spend money it does not have. Karl Marx,needs no introduction!

[Vermont Woodchuck]

Something far more sinister underlies socialist economics. All run on OPM; cut that off either through internal exhaustion or external forces, the Marxist/Fascist order must collapse OR wage war to plunder another's wealth to survive.

Political suicide is seldom an overt choice; we have had wars in search of loot. You may attach any name you like to that acquisitive process, but a rose is a rose is...

[gene laber]

I am amazed that an economist would refer to economic growth as an addiction that is to be avoided. Is it not obvious that economic growth has made mankind much better off? Very good post Art.

[milton newport]

I think an anti-growth mentality lies behind at least some of the desire to limit energy production. The lack of reliable, low-cost electricity inhibits entrepreneurial activity. There will be no need to preach about affluenza.

[Jonathan Lesser]

Art, clearly we are better off in a penurious, Hobbsian-world. Isn't it odd that the only ones who wring their hands and gnash their teeth over the horrors of economic growth are those whose lifestyles are paid for by such growth.

[Timothy Diette]

Good stuff, Art.

Maybe ironically for Prof. Costanza, increased productivity also enables people to support inefficient production of "buying local" or some organic foods.
(For this post, I will ignore real or perceived quality differences in these goods and whether carbon is properly priced)

[Lazarus Long]

Professof of "Ecological" Economics???? Oh, Please!!!! It just goes to show that you can insert "ecological" or "sustainable" into anything to make it sound magnificent.

[Bill]

Why is my alma mater so overloaded with these fascist radical progressive movement beauties? Some of these characters won't be satisfied until we are all living in mud huts and riding bicycles. Themselves and their socialist co-conspirators are exempted, of course. Their employers must award them 7% annual pay hikes at taxpayer and tuition-payer expense. Their health insurance must be 100% employer paid. When their trust fund shows healthy growth, you can be sure they don't call the trust officer to complain.

[RFC]

If the addiction ever comes to Vermont, I'm afraid it comes too late. We were vaccinated against Economic Growth many years ago and every year our socialist-run General Assembly gives us booster shots.

Well at least we won't need to be put in an isolation chamber. Given a couple of more years and nobody will want to come near us anyway.

[Tom Licata]

"Maybe ironically for Prof. Costanza, increased productivity also enables people to support inefficient production of "buying local" or some organic foods."

I don't understand this statement. Increased productivity would promote comparative advantage and dissuade "buying local."

[Glenn Eno]

Another sad by-product is some of his students are out of state tuitions who get to vote as residents of Vermont. Nothing like having our own Dr Kevorkian for economic growth.

[Chris Campion]

Apparently the addiction to increased spending in higher ed is entirely supportable, however, regardless of those unfortunate but unavoidable impacts on staff who might not find themselves with a job to trundle in to every morning. Ultimately, you can't make something out of nothing, so I'm not really sure how one can become an economist and fail to understand both the value of economic growth, and how it occurs. Perhaps it was because I only have a minor in Econ from UVM that I did not receive the wondrous learnings contained with the ecological economics coursework.

Considering how catastrophically UVM's finances have been managed in the last decade, I should fail to be surprised that this thinking still pervades our city on the hill. I look forward to the wake-up call.

[Sheldon Katz]

How far does the good professor's opposition to growth go? Does he want to turn back the clock or just freeze it? Neither sounds very "progressive." Indeed, both are regressive. And what principle informs his answer to this question? I doubt there can be one. His answer would be entirely subjective.

To put the professor's "thinking" in the best light possible, he and others of like-mind seem to conflate economic growth (resulting from free markets) with their perception that most people, particularly those achieving material success, lack virtue or self-control e.g. are materialistic or avaricious in its worst form (whatever that means). To the extent the perception is accurate, these are at most personal failings (assuming a well developed legal system) that harm only the individual involved. Scrooge's worst victim was the old man himself.

And economic growth does not cause these personal failings -- they are part of the human condition. No one ever said that free market capitalism would eliminate vice or perfect the human soul. It is the only system, however, that creates the proper incentives (again given a fair justice system) for upright conduct toward others.

Of course, the professor's perception that those who prosper the most in a free market capitalist society suffer these failings should not go unchallenged. The quest for material excess cannot and does not explain their success. Generally, they just love what they do, or what they can do for others, and the material success follows.

[Lazarus Long]

Sheldon: Thank you for your analysis and perceptions. You have skewered one of the tenents of the politics of envy.

[Vermont Woodchuck]

Sheldon, funny, you don't look Daoist.(Tao)

[Timothy Diette]

Tom Licata,
I am not sure if you will check back to read this as a response to your confusion about productivity and comparative advantage.

I was referring to an increase in overall productivity (this means we can produce more of some goods or services using fewer resources).

Productivity does not increase in all sectors of the economy equally. For example, part of the challenge in education is the lack of increase in productivity (and some would say decrease).

As the economy overall grows more productive, this frees up resources to produce something else. One of those "something else" goods could be labor intensive farming that individuals value because it makes them feel good to pay a premium to a local farmer for a product (or they find it tastes better and therefore they are buying a higher quality product).

I think the confusion may have been between increases in productivity for the society vs. productivity in locally produced goods?