When some people hear the words “economic growth” they imagine factories spewing smoke into the atmosphere:
This is a false image of what economists mean by “economic growth”. Economic growth according to economists is about achieving more with less. It’s about efficiency. It is about using our scarce resources more wisely.
The stoves of the 17th century had an efficiency of only 15%. Meanwhile, the induction cooktops of today achieve an efficiency of 90%. Pre-16th century kings didn’t have toilets, but 54% of humans today have toilets all thanks to economic progress.
Efficiency, if harnessed safely, benefits us all. It means we can get more value for less scarce resources, thus increasing the overall pie.
Will economic growth create more inequality due to rent seeking and wealth concentration? The evidence suggests that as GDP (not a perfect measure, but a decent one) grows, per capita incomes also grow. I’d rather be a peasant in South Korea than an average government employee in North Korea.
When some people hear the words “economic growth” they imagine factories spewing smoke into the atmosphere:
This is a false image of what economists mean by “economic growth”. Economic growth according to economists is about achieving more with less. It’s about efficiency. It is about using our scarce resources more wisely.
The stoves of the 17th century had an efficiency of only 15%. Meanwhile, the induction cooktops of today achieve an efficiency of 90%. Pre-16th century kings didn’t have toilets, but 54% of humans today have toilets all thanks to economic progress.
Efficiency, if harnessed safely, benefits us all. It means we can get more value for less scarce resources, thus increasing the overall pie.
Will economic growth create more inequality due to rent seeking and wealth concentration? The evidence suggests that as GDP (not a perfect measure, but a decent one) grows, per capita incomes also grow. I’d rather be a peasant in South Korea than an average government employee in North Korea.