The FT com­men­ta­tor Mar­tin Wolf recent­ly asked, “Is unlim­it­ed growth a thing of the past?” It is a provoca­tive ques­tion giv­en the cur­rent eco­nom­ic out­look. Fac­tor in the longer term prospects for eco­nom­ic out­put at any lev­el of analy­sis, from indi­vid­ual entre­pre­neurs to the col­lec­tive glob­al econ­o­my, and it’s not only provoca­tive but immense­ly rel­e­vant. For exam­ple, have you checked the unem­ploy­ment lev­els in both the US and Europe? “Euro­stat, the Euro­pean Union’s sta­tis­tics agency, declared in a report on Mon­day that in August, 18.2 mil­lion peo­ple were out of work across the 17 coun­tries that share the euro cur­ren­cy bloc; the high­est unem­ploy­ment num­bers since the data series start­ed in 1995.” 

It would be easy for any­one to assert that the world has reached its lim­its on growth. Wolf´s argu­ments are informed by a paper pub­lished this sum­mer by Robert J. Gor­don of North­west­ern Uni­ver­si­ty in the Unit­ed States, in which he rais­es fun­da­men­tal ques­tions about the process of eco­nom­ic growth — and, in so doing, chal­lenges the assump­tion, near­ly uni­ver­sal since Solow’s sem­i­nal con­tri­bu­tions of the 1950s, that eco­nom­ic growth is a con­tin­u­ous process with­out end. Oth­ers have exam­ined the his­toric pat­terns of growth (the so-called “long-wave the­o­rists”) and may have pro­vid­ed a slight­ly more upbeat argu­ment that the cap­i­tal mar­kets abil­i­ty to redi­rect invest­ment will keep the wheels of growth churn­ing forward.

End of the roadWhile Gor­don is not opti­mistic that our rev­o­lu­tion­ary com­put­er age has the the poten­tial to gen­er­ate end­less eco­nom­ic growth from all things dig­i­tal, he does have a point that oth­er eco­nom­ic rev­o­lu­tions (going back to the 1750s) peaked and declined. Yet that does not mean — even if the com­put­er age should sput­ter, eco­nom­i­cal­ly — that growth is kaput. I’ve seen enough entre­pre­neurs face-to-face to believe that steady-state econ­o­mists need to get out more.

Besides, can you imag­ine the politi­cian, CEO or entre­pre­neur telling his or her con­stituents that growth as we know it has come to an end? For­get more job cre­ation, dear cit­i­zens. For­get more div­i­dend growth, my trust­ed share­hold­ers. For­get any vaca­tion this sum­mer because our busi­ness is just not grow­ing enough to sup­port it, my dear employ­ees and your families.

Nonethe­less, it’s worth your time to read the good­bye-growth advo­cates. Their argu­ments do indeed sound like the death of cap­i­tal­ism as we know it; and, if it should hap­pen, the results will be far more tan­gi­ble (and thun­der­ous) than the melt­down of Lehman Broth­ers or the bank­rupt­cy of Gen­er­al Motors. As we strug­gle as a glob­al com­mu­ni­ty with the adverse effects of a con­stant­ly churn­ing and grow­ing econ­o­my, that alter­na­tive seems just a lit­tle bit scary. My prob­lem is that I can’t quite come to advise any­one to “be afraid; be very afraid”. Can you?

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