Within the advanced countries, growth rates tend to be very stable over long periods of time, provided one averages over periods long enough to eliminate business-cycle effects (or corrects for short-term fluctuations in some other way). For poorer countries, however, there are many examples of sudden, large changes in growth rates, both up and down. Some of these changes are no doubt due to political or military disruption: Angola’s total GDP growth fell from 4.8 in the 60s to – 9.2 in the 70s; Iran’s fell from 11.3 to 2.5, comparing the same two periods. I do not think we need to look to economic theory for an account of either of these declines. There are also some striking examples of sharp increases in growth rates. The four East Asian ‘miracles’ of South Korea, Taiwan, Hong Kong and Singapore are the most familiar: for the 1960-80 period, per capita income in these economies grew at rates of 7.0, 6.5, 6.8 and 7.5, respectively, compared to much lower rates in the 1950’s and earlier. Between the 60s and the 70s, Indonesia’s GDP growth increased from 3.9 to 7.5; Syria’s from 4.6 to 10.0.
I do not see how one can look at figures like these without seeing them as representing possibilities. Is there some action a government of India could take that would lead the Indian economy to grow like Indonesia’s or Egypt’s? If so, what, exactly? If not, what is it about the ‘nature of India’ that makes it so? The consequences for human welfare involved in questions like these are simply staggering: Once one starts to think about them, it is hard to think about anything else.
Robert Lucas, ‘On the Mechanics of Economic Development’, Journal of Monetary Economics, vol. 22, no. 1 (July, 1988), pp. 4-5
In Guns, Germs, and Steel Jared Diamond suggested that geography, botany, and zoology were destiny. Europe and Asia pressed ahead economically, and remained ahead to the present day, because of accidents of geography. They had the kinds of animals that could be domesticated, and the orientation of the Eurasian land mass allowed domesticated plants and animals to spread easily between societies. But there is a gaping lacuna in his argument. In a modern world in which the path to riches lies through industrialization, why are bad-tempered zebras and hippos the barrier to economic growth in sub-Saharan Africa? Why didn’t the Industrial Revolution free Africa, New Guinea, and South America from their old geographic disadvantages, rather than accentuate their backwardness? And why did the takeover of Australia by the British propel a part of the world that had not developed settled agriculture by 1800 into the first rank among developed economies?
Gregory Clark, A Farewell to Alms: a Brief Economic History of the World, Princeton, 2007. pp. 13-14
It was a common platitude—during the boom years of the 1980s—that Japan was the future and that America needed to follow and learn from Japan. The funny thing is, those claims might have been true, but in the opposite direction of how they were intended. Japan is an object lesson in how to live with a slow-growth economy.
Tyler Cowen, The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better, New York, 2011, p. 87
If the time horizon is extremely short, the benefits of continued higher growth will be choked off and will tend to be small in nature. Even if we hold a deep concern for the distant future, perhaps there is no distant future to care about. To present this point in its starkest form, imagine that the world were set to end tomorrow. There would be little point in maximizing the growth rate, and arguably we should just throw a party and consume what we can. Even if we could boost growth in the interim hours, the payoff would be small and not very durable. The case for growth maximization therefore is stronger the longer the time horizon we consider.
Tyler Cowen, ‘Caring about the Distant Future: Why it Matters and What it Means’, University of Chicago Law Review, vol. 74, no. 1 (Winter, 2007), p. 28
Just as it is possible to dissociate energy growth from GNP growth, it is possible to dissociate GNP growth from welfare growth. The latter separation could be brought about by the abolition of the positional goods that are so important in modern economies. If everyone is motivated by the desire to be ahead of the others, then everybody will have to run as fast as they can in order to remain at the same place. Without any change in preferences, welfare levels could be raised if everyone agreed to abstain from this course. By contrast, most proposals to distinguish between ‘real’ and ‘false’, or ‘natural’ and ‘social needs’, imply that preferences should be changed—which immediately raises the spectre of paternalism. One should not confuse the needs that are social in their object (positional goods) with needs that are social in their origin.
Jon Elster, ‘Risk, Uncertainty and Nuclear Power’, Social Science Information, vol. 18, no. 3 (June, 1979), p. 378
[T]he real per capita income of the world now is about 7-8 times that of a century ago. If we proceed along an environmentally responsible path of growth, our great grandchildren in a century will have a real per capita income 5-6 times higher than our level now. Is it worth the risk of environmental disaster to disregard environmental protection now to try to grow a little faster? If this faster growth could be sustained, our great grandchildren would enjoy a real per capita income 7-8 times (instead of 5-6 times) higher than our level now. However, they may live in an environmentally horrible world or may well not have a chance to be born at all! The correct choice is obvious.
Yew-Kwang Ng, ‘Happiness Studies: Ways to Improve Comparability and Some Public Policy Implications’, The Economic Record, vol. 84, no. 265 (June, 2008), pp. 261-262
“Growth” is a funny sort of concept. For example, our GNP increases every time we build a prison. Well, okay, it’s growth in a sense, but it’s kind of a dumb measure. Has our life improved if we have more people in prison?
Noam Chomsky, ‘Interview with Jerry Brown’, in SPIN Magazine, 1993