Recently I had the pleasure of discussing my latest set of posts, “Macroeconomics and Moral Judgment,” with a group of Unitarian Universalists in Salisbury, Maryland. They are a pretty progressive bunch of folks, and my views were largely well received. A few of them raised excellent questions that forced me to reflect on my own assumptions.
In my presentation, I talked about how to grow the economy in a more authentic and sustainable way, as opposed to creating an illusion of wealth by running up debt. I argued that just reducing spending doesn’t work macroeconomically, and that part of the answer is to fund useful spending by channeling more of the national income where it is needed. That includes paying workers enough to live on, as well as giving government the revenue to fund human capital investments that private industry doesn’t find profitable.
I wouldn’t have been surprised to get some pushback from economic conservatives who prefer to keep the lion’s share of the wealth in the hands of the private “job creators.” I wasn’t as prepared for the comments that questioned my whole macroeconomic framework. One person asked if our economy needs to keep growing at all, and whether contraction might be considered just as normal as expansion. Another suggested that economics and morality may be irreconcilable, and that the most moral stance might be detachment from economic desires.
Perhaps such comments reflect a reaction against greed and materialism, the desire to acquire unlimited possessions that leads the rich to hog the wealth and the not-so-rich to run up debt. As I said in my presentation, frugality certainly has its place among the individual virtues.
However, my main concern was how we want the economy as a whole to work. Most economists assume that economic growth is a good thing, and that severe economic contractions are both undesirable and avoidable with sound macroeconomic policies. One reason for preferring expansion is population growth. The UN projects world population to grow from 7.2 billion to 9.6 billion by 2050. That implies a huge increase in the demand for jobs. And since several of those billions are still living in abject poverty, we would like the growth in incomes to do more than just keep pace with population growth. Alleviating poverty when the economic pie is growing is hard enough. If it has to be done entirely by taking from the rich to give to the poor, it is even harder.
Economic growth does not have to mean always producing more of the same stuff. A case can be made that we produce too many fossil fuels, too much junk food, too much pornography. We should be producing more solar panels and bicycles and mental health services. We need to define economics broadly to include all marketed goods and services, not just the obvious material ones. True, not everything should be commodified–turned into marketable commodities. We don’t want a world in which no one cares for a child without being paid. But on the other hand, we don’t want a world in which parents who need paid jobs have no access to both a job market and a child care market. So even as markets for some goods and services may shrink, we need other markets to expand.
My presentation didn’t try to address environmental concerns. The earth may require humans to cap our population growth and stop basing our growth on the extraction of nonrenewable resources. Even then, growth in wealth could still occur through the enhancement of human value with education and the expansion of the market for high-quality services and recycled/repaired/retooled material things.
I respect the kind of detachment that acknowledges the impermanence of all things, as taught by Buddhism and other process philosophies. But that applies not just to economic exchanges, but to everything else–ideas, laws, relationships, and so forth. Economic exchanges are no more inherently morally dangerous than any other human experience. Participating in them is not a vice, and remaining aloof from the effort to make them work better to meet human needs is not a virtue. When billions of people need higher incomes in order to live a decent life, advocating sustainable economic growth based on human capital development and fair reward distribution is an expression of compassion.
In the end, I continue to believe that a pro-growth stance is also a moral stance, as long as the kind of growth one advocates is economically and environmentally sustainable. The fact that it is challenging to achieve doesn’t make it bad.