To the Editor:
In “A Low-Growth World: One Key to Persistent Economic Anxiety” (The Upshot, front page, Aug. 7), Neil Irwin writes: “The first step to trying to reverse the slowdown is to understand why it’s happening. A good way to do that is to re-examine predictions from smart economists.”
According to the philosopher and economist John Stuart Mill, the end of growth is both inevitable and desirable. In “Principles of Political Economy,” he wrote that “the increase of wealth is not boundless.” He added: “A stationary condition of capital and population implies no stationary state of human improvement. There would be as much scope as ever for all kinds of mental culture, and moral and social progress; as much room for improving the Art of Living, and much more likelihood of its being improved, when minds ceased to be engrossed by the art of getting on.”
Without continued economic growth, Americans would have to buy a less expensive house. But if they work less and relax more with friends and neighbors, could they actually be happier? The Bernie Sanders campaign suggests that rebuilding fairness could be more important than continual economic growth.
Maybe we are striving for the wrong end.
To the Editor:
The Upshot reports on some theories by prominent economists on why “economic growth in advanced nations has been weaker for longer than it has been in the lifetime of most people on earth.”
One thought from some of us in the for-profit sector is the unprecedented explosion of regulations that have forced businesses large and small to devote a lot of resources to compliance efforts. The inputs — direct labor, meetings, reviews and paperwork — are enormous. But the outcomes are essentially zero.
But perhaps the biggest issue involves defining the original problem. Why confine the study to “advanced nations”? Looking at population-weighted growth, the economic activity of the world is right on track. China and India — representing over a third of the world’s population — have seen growth rates in the high single digits. Their populations are catching up to the “advanced nations” standards. That is the real story.
CHARLES H. GESSNER
To the Editor:
The explanation for America’s slow growth is quite simple. In a capitalistic system, maximizing profits is the overarching concern. Since the population is increasing, as is automation, corporations maximize profits by lowering wages as much as possible and getting by with as few workers as possible. Workers have become fungible.
Wage stagnation is a major problem in the United States; hence, disposable income has decreased for most folks in America. That means that demand for goods and services has decreased, resulting in the need for even fewer workers.
The Fed has provided almost free money hoping that corporations would borrow at low rates and expand, invest in new plants and equipment, and hire new workers. Instead, corporations have used borrowed money to buy back stock, to buy other companies, and to pay executives huge bonuses and stock options.
Only a relatively low number of people at the top have benefited. Thus, we have fewer people at the top supporting an increasing number of poor people at the bottom. This is unsustainable.
These forces have led to the rise of Donald Trump and his followers. The end game won’t be pretty. Welcome to third-world America.
[Source: The New Yourk Times]