Quote:
Originally Posted by Enoch Root
Economic growth has continued unabated since the beginnings of free economic activity hundreds of years ago. Productivity gains have only enhanced its pace.
The slowing of activity that we have seen recently is a function of global debt: it's a current problem, it isn't some permanent change in the human condition.
Even if one were to argue (incorrectly) that growth has permanently slowed in first world nations, the vast majority of the global population is not first world.
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Demographics play a huge part in economics. Japan, a country with low birth rates and extremely low immigration, has been in an economic malaise for over 20 years now. China, now rapidly aging, may have missed the boat on broad economic prosperity. And most of the countries that still have high birth rates are politically dysfunctional and are unpromising candidates for the role of engines of the global economy.
Yes, there is still growth and increased productivity. But the rewards are going to a smaller and smaller group of people. Thomas Piketty argues persuasively in
Capital in the Twenty-First Century that the widespread prosperity the West enjoyed in the post-war boom was an anomaly. That it was only as a consequence of the enormous wealth destroyed in the two great wars that labour temporarily secured leverage in the enduring struggle against capital. And now we're returning to the historical norm, where capital takes home the lion's share of wealth generated by productivity, and labour has to settle for the scraps. Combine that with the rapidly accelerating automation of the economy, and it's hard to see how we'll see a return to the halcyon days of the post-war boom.