The importance of economic growth

That time period (the last three decades), which coincidentally spans my professional career, has seen the global economy increase by approximately 3.4pc per annum in purchasing power parity terms.

Compounding you see: that makes the total economic output some 2.7 times what it was only 30 years ago.

There\’s another way of putting this: GDP is the value of all goods and services produced at market prices. That is, the value added in the economy. And another way of thinking about value added is that this is the capacity, a measurement of our ability, to solve human problems. Which has more than doubled and near tripled in just a grandfather (as Terry Pratchett calls 30 years).

All rather good, innit?

Oh, and we could try mapping this over the IPCC\’s economic forecasts too. A1 is where we have more globalisation, more and continuing capitalist free marketry. GDP growth continues in the 20th century as it did in the 20th… about 3% actually. And there are two very important outcomes of that forecast. Firstly, human poverty is abolished by 2100. Finally, entirely done, over.


Further, if solar power continues to get cheaper as it did in the 20th, if energy intensity of production declines at that same 20 th century rate, then according to A1T then there\’s no problem with climate change either. This is, note, without any plans at all to do anything about it.

As Mr. Dillow (pbuh) has been wont to note the best forecasts are usually that tomorrow will be much like today, next year like this, next decade like last.

If we just carry on like we have been our two most difficult problems would appear to very much solve themselves.

Hurrah, eh?

6 thoughts on “The importance of economic growth”

  1. And yet strangely the price of a packet of cream crackers is only a few per cent lower than it was in the 1970s in real terms.

    Something up with the statistics, I fear.

  2. As our two most difficult problems seem too be politicians & environmentalists, what are you proposing? A cull?

  3. GDP is 2.7 times what it was 30 years ago, but debt as a percentage of GDP is much higher than it was then. If we really are so much richer and more productive today, why do we have to keep borrowing so much?

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