But of course, it is true:
For in Western economies, to keep the level of employment constant, with normal increases in productivity, GDP must grow by 2pc-3pc.
This is the flip side of all those arguments that increased economic wealth does not make us all happier.
We do actually know that the presence of economic growth, of increases in that wealth, does make people happier….or perhaps the correct way of putting it is that the absence of such growth makes people unhappier.
Bootle has here provided the reason why this is so. Labour productivity increases over time. Thus, if output stays static, less labour is required. So an economy with the usual rise in labour productivity but with static output (ie, the steady state economy) will have an ever increasing unemployment rate. It\’s not that difficult to see that this could lead to a tad of unhappiness.
There\’s nothing wrong with voluntary unemployment of course, another name for this is leisure. But involuntary unemployment really isn\’t a happy state.
All of which leads us to an interesting point about such a steady state economy. We sould have to find, in order to have such a steady state economy, a way of choking off any form of improvemnt in labour productivity. We would have to stop people inventing new machines, inventing new ways of employing labour which are more efficient, even, stop people launching new businesses (for many of those are indeed employing new insights into how labour can be used more efficiently).
All of which rather makes the dream of a steady state economy a fail. Can you imagine the sort of police state that would be required to root out even a new method of turnip weeding?
So, sorry, that dream don\’t work.