Economic Growth

Any economic wizz kids out there, please?

A tree has a finite growth. An elephant has a finite growth. You and I have a finite growth. Everything, except the economy, has a finite growth.

Why is it, please, that the expesively educated suits in Whitehall expect the economy to go on growing year after year after year after year . . . . . . when the facts are showing this just does not happen?

Thanks.

Originally Posted by rydalong

You and I have a finite growth.

My waistline still seems to be expanding

Well there's a number of reasons.

There will be more economic activity, on average, simply if there are more people. So, for example, immigration does usually have that kind of effect. So do increasing birth rates and/or life expectancy, if it's positive/productive time, not just being cared for on benefits.

But more importantly -

- technology improves
- systems, processes, techniques and working methods improve, and the improvements are usually quite widely shared, at least in the long run
- in some cases new basic resources are obtained - though this is clearly something of a problem with fixed reserves such as oil, gas, coal etc.

And also

- economic demand increases, as people just want more and more stuff. Most businesses, and all of the ones that survive, are meeting demand from someone.

...

You are right though, that there is a natural limit. It can't literally go on for ever. One day our sun will rupture.
...

HTH

Remember kids, toast can go up as well as down. HTH

Originally Posted by go_slow

Remember kids, toast can go up as well as down. HTH

Yebbut when it goes down, the buttered side always hits the floor

Originally Posted by moth

Yebbut when it goes down, the buttered side always hits the floor

Not if you strap it to the back of a cat.

Originally Posted by BananaMan

You are right though, that there is a natural limit. It can't literally go on for ever. One day our sun will rupture.

We really will have landed on the moon by then though, and probably some other planets too.

Originally Posted by Fruity

We really will have landed on the moon by then though, and probably some other planets too.

The pubs will have no atmopshere, I'm telling ya.

Originally Posted by go_slow

Not if you strap it to the back of a cat.

It's always good to get answers for the really important stuff first, doncha think?

Right, about this economy thing now...

Originally Posted by go_slow

Not if you strap it to the back of a cat.

I also invented a perpetual motion machine once.



It didn't work.

Originally Posted by go_slow

Not if you strap it to the back of a cat.

Shhh, not many people have work out perpetual motion yet.

Originally Posted by moth

Right, about this economy thing now...

Meh, it'll never catch on.

Originally Posted by saga_lout

I also invented a perpetual motion machine once.



It didn't work.

Did you try a blue elastic band instead of the one the postie gave you? It's well known the post office are the paramilitary wing of an organisation that is trying to suppress new technologies, evidenced by the fact we still have post men and women delivering mail instead of a mailamatic 3000 robot.

Continued economic growth will be possible as long as there is a growing consumer base and a continued supply of raw materials. If either of these things stops, growth cannot continue. You can't make something from nothing, as much as the economicsts would love to pretend.

I am reminded of the old chestnut about the 3 men trapped on a desert island with a large can of baked beans and no way to open it/

The scientist had a jolly wheeze on how to open it using the laws of physics.
The engineer designed an elaborate mechanism out of unlikely materials.
The economist assumed a can opener.

The whole 'science' of economics is a logical construct built on a raft of assumptions. Most of those assumptions are based on historic facts, they were true at some point in the past. The problem is that times are changing, what was true may not be true in 10 or 20 years time. And if the underlying assumptions change, so does the answer.

Unfortunately many (most?) economists seem to concentrate on extending their logic based on the same set of assumptions, few seem to want to confront the assumptions themselves. Probably because the answers are unpalatable and no-one wants to pay for uncomfortable answers.

So, to answer the original question, no the economy cannot continue to grow. It will stop. The $64,000 question is when. It could recover from it's temporary blip and go on for another few hundred years (we recovered from the South Sea Bubble). Or it might not.

Old joke: if you lock 3 bankers in a room, which one makes a profit?

A. They all do.