8 ms·

I'm no expert in economics but it seems whenever the idea of capitalism without growth is mentioned, most people prefer to stick their heads in the sand. If, in

I'm no expert in economics but it seems whenever the idea of capitalism without growth is mentioned, most people prefer to stick their heads in the sand. If, in my naive view, we have cyclic crises because of growth, shouldn't it be natural to focus on an alternative? Is this alternative too hard to implement?

sesuximo 7y ago
cycles naturally arise from self righting forced. like a boat rocking back and forth, the economy grows too fast and swings back. is that so bad?
- vincent-toups 7y ago
  I don't know, ask someone whose kid can't get medical treatment because they lost their job in a downturn.
  - didgeoridoo 7y ago
    This is a non sequitur, and unnecessarily inflammatory besides. Capitalism is totally compatible with a robust social safety net.
  - cyrksoft 7y ago
    Or ask the hundreds of millions who died under socialist and communist systems. Or ask the hundreds of millions or more who are no longer poor thanks to capitalism. Edit: typo
    - deleted 7y ago
      [deleted]
- dillonmckay 7y ago
  That doesn’t seem true. There has been quite a history of interventionist policies.
WMCRUN 7y ago
While I hope we can design alternative systems and sustainable, circular economies, the desire for growth may be a hardwired part of the human condition. Despite all good intentions, the hedonic treadmill is real. You may like the work of Kate Raworth at Oxford though.
- pas 7y ago
  In economics growth is a natural consequence of technological progress. And that doesn't seem to be stopping any time soon. The big applied questions is how to manage the cyclicality - that arises in any dynamic system anyhow.
  - WMCRUN 7y ago
    I would argue the real question is sustainability. The universe is finite.
    - limomium 7y ago
      Last I heard it was expanding -- and the expansion was accelerating. When we looked at the most empty spot we could find with the best camera ever built, we saw more universe than we could even have imagined. Earth, ok, that's somewhat finite. Yet we're literally barely scratching its surface.
    - pas 7y ago
      Right, the concern is not unfounded, but maybe a bit counterproductive without context. There are many resources we already exploit very inefficiently, and the sustainability of those is a real worry, but the general carrying capacity of Earth and the solar system is really really vastly huge, we just do very dumb things to ourselves economically speaking. (This is of course the coordination problem, and it's hard, as human behavior is what it is.)
pas 7y ago
Cycles arise in any complex/dynamic system. It's natural. Managing it should be natural too. Applying dampening on the amplitudes would help. That's basically the mandate of central banks. Growth is the consequence of population growth and technological progress and the process of specialization (comparative advantages). All three are in pretty much full force, so it's not just growth because greed. (sorry for double posting :| )
- WalterBright 7y ago
  The business cycle isn't really a cycle. It's a fractal, chaotic system. A cycle is predictable, a chaotic system is not.
  - pas 7y ago
    I purposefully haven't said periodicity or something else (maybe I should have added a bit more detail anyway.) The ebb and flow, the up and down the cycling is known, but when and its magnitude is not. Sure it's chaotic and it probably has scale-free (self-similar or fractional-dimensional) properties at certain regimes, but on the large scale it's pretty well approximated by dynamic systems. (See the micro founded macro models used by central banks.) Of course, we're getting better at modeling both micro and macro behavior of economies. (The caveat is that the economy also evolves so old models usually get less and less accurate, so job security for econometricians.)
bpatel576 7y ago
I think it would be more correct to say that we have cyclical crises because of debt, which is a function of growth.
- pas 7y ago
  Cycles arise in any complex/dynamic system. It's natural. Managing it should be natural too. Applying dampening on the amplitudes would help. That's basically the mandate of central banks. Growth is the consequence of population growth and technological progress and the process of specialization (comparative advantages). All three are in pretty much full force, so it's not just growth because greed.
fifnir 7y ago
Simple non-growth-based capitalist endeavor that I've been daydreaming about (setting up a supermarket as an example): The goal of Supermarket(SM) is to provide products to customers and a stable occupation for those working in the system, not to maximize profit. SM will only sell to subscribed members. Whenever someone buys something, they pay only the cost of the product, and the purchase is recorded. At the end of each month, SM has to balance its finances: costs have to be equalized with income. We will charge our members an additional % over whatever they bought for this month, just as much as it's needed to balance the books. The more customers we have and the more volume we moved, the less % everyone has to pay. This way, instead of customers paying a predetermined % margin for each product, they pay as little as it's needed to keep things going. They don't pay for anyone's profit.
- frozen11b 7y ago
  Sound like an interesting twist in co-OP comoany
  - didgeoridoo 7y ago
    It sounds precisely like a grocery co-op. Are these not common where you live? https://www.moneycrashers.com/food-coop-costs-benefits-drawbacks/ https://www.moneycrashers.com/food-coop-costs-benefits-drawb...
    - fifnir 7y ago
      Not in my corner of the world unfortunately
    - dgellow 7y ago
      The two largest grocery chains in Switzerland are both cooperatives (they together represent ~70% of retail): - Coop (that's the name) has https://en.wikipedia.org/wiki/Coop_(Switzerland) https://en.wikipedia.org/wiki/Coop_(Switzerland) - Migros https://en.wikipedia.org/wiki/Migros https://en.wikipedia.org/wiki/Migros
- 7y ago
isoprophlex 7y ago
In medicine you'd call that cancer, so, yeah... Maybe we need something more sustainable than growth for the sake of growth. Also if we're globally maxed out, I think an economy is 'temporal zero sum', if that makes sense: you grow now by borrowing but pay back in the next recession? Totally not an economist though.
- dnautics 7y ago
  The beauty of free markets (not sure if I'd call it capitalism) is that even if you're resource zero-sum, free markets can still experience growth, by seeking more efficient redistribution of those resources given individual preferences.
  - harimau777 7y ago
    As I understand it, free markets determine preferences based on price. However, the price someone can buy something for includes both their desire to pay and their ability to pay. Therefore, I'm not sure that price is always a good metric for allocating resources. Do resource zero-sum, free markets still reliably experience growth from the perspective of someone who doesn't view price as a good measurement of value? If so that would potentially be useful because it could allow more progressive leaning and more libertarian leaning people to find some common ground.
    - dnautics 7y ago
      If you pay for something it means that your value for the money is less than the value of the satisfaction you believe you will get out of it. Money does not magically create an equivalence class of value across all items of the same price.
  - aSplash0fDerp 7y ago
    >by seeking more efficient redistribution of those resources given individual preferences. Whats the difference between the wealthy and the rich? ---Freedom Whats the difference between the rich and the poor? ---Nothing Its hard to know if they're talking about AI or the economy when they start using words like manipulation, distortion, smoke-n-mirrors and illusion.
harimau777 7y ago
The problem that I would see is that since wealth tends to be passed on to future generations, without growth it would be difficult for those who currently are not wealthy to ever become wealthy. This is maybe a similar point, but it also seems to me that the without growth we would need to come up with some alternative to 401ks in order to allow people to build wealth.
scythe 7y ago
People ignore the idea "let's not have growth" because it's a bad idea. Here's a quick two-question quiz to determine whether you're in favor of economic growth: - Do you believe wealth and income should be distributed equitably around the world? - Do you want to live on more than USD 17.3k per annum? If you answered "yes" to both of these questions, then congratulations! You're in favor of economic growth. The average global income per capita is USD 17.3k per annum. If that number goes up, we call that "growth". That is the definition of growth. Of course you can get into population control, but if the alternative to growth is China-style population control -- necessarily more severe than just handing out birth control -- then bring on the economic crises, I say.
- RaiseProfits 7y ago
  > - Do you want to live on more than USD 17.3k per annum? By itself this is meaningless. What does it buy where you are? Most places that’s more than enough to live comfortably. Anyway, money is only useful to decide who starves.
  - duxut_staglatz 7y ago
    The more accurate question is do you want to live with whatever goods can currently be bought with USD 17k in the US today?
    - deleted 7y ago
      [deleted]
    - RaiseProfits 7y ago
      I’m not seeing the productivity gains anyway, buddy, I work for minimum wage and you’re barking up the wrong tree. Growth doesn’t matter if it doesn’t reach the people.
      - duxut_staglatz 7y ago
        Yes, indeed. But growth does matter if it reaches the people, which is scythe's point.
Unsimplified 7y ago
You can have growth without unnatural cyclic crises. Focus om the deeper causes of artificial crises (those without actual resource shocks).
Nasrudith 7y ago
The concept of growth is much misunderstood popularly with the various unsustainable growth memes. Growth isn't just more raw resources and finished goods but also development which makes things more efficient. Importantly even if the goal is more environmental sustainability it isn't the enemy. Apply growth in productivity and less land is needed for production and more can be preserved. NYC has more value from Central Park than say the area as a gold mine now. The automation job losses are themselves a sign of it - keeping the same number of employees and adding even more capacity would be wasteful. To go without growth is to surrender entirely and doom oneself to decline. If everyone is working towards something and not experiencing growth by definition something is wrong - that level of effort should lead to improvement over time even if they are just a chain of masters, journeymen, and apprentices. The cycles are a result of phantom growth from phantom values - even if the production is real returns may diminish more than expected.
jariel 7y ago
I don't think the notion that 'growth causes recession' is reasonable in any way. Yes, there are some negative aspects of 'negative growth' in things like deflation which can cause 'downward spirals' but there's no reason we shouldn't be able to grow consistently for the foreseeable future.

sesuximo 7y ago

cycles naturally arise from self righting forced. like a boat rocking back and forth, the economy grows too fast and swings back. is that so bad?

vincent-toups 7y ago
I don't know, ask someone whose kid can't get medical treatment because they lost their job in a downturn.
- didgeoridoo 7y ago
  This is a non sequitur, and unnecessarily inflammatory besides. Capitalism is totally compatible with a robust social safety net.
- cyrksoft 7y ago
  Or ask the hundreds of millions who died under socialist and communist systems. Or ask the hundreds of millions or more who are no longer poor thanks to capitalism. Edit: typo
  - deleted 7y ago
    [deleted]
dillonmckay 7y ago
That doesn’t seem true. There has been quite a history of interventionist policies.

WMCRUN 7y ago

While I hope we can design alternative systems and sustainable, circular economies, the desire for growth may be a hardwired part of the human condition. Despite all good intentions, the hedonic treadmill is real. You may like the work of Kate Raworth at Oxford though.

pas 7y ago
In economics growth is a natural consequence of technological progress. And that doesn't seem to be stopping any time soon. The big applied questions is how to manage the cyclicality - that arises in any dynamic system anyhow.
- WMCRUN 7y ago
  I would argue the real question is sustainability. The universe is finite.
  - limomium 7y ago
    Last I heard it was expanding -- and the expansion was accelerating. When we looked at the most empty spot we could find with the best camera ever built, we saw more universe than we could even have imagined. Earth, ok, that's somewhat finite. Yet we're literally barely scratching its surface.
  - pas 7y ago
    Right, the concern is not unfounded, but maybe a bit counterproductive without context. There are many resources we already exploit very inefficiently, and the sustainability of those is a real worry, but the general carrying capacity of Earth and the solar system is really really vastly huge, we just do very dumb things to ourselves economically speaking. (This is of course the coordination problem, and it's hard, as human behavior is what it is.)

pas 7y ago

Cycles arise in any complex/dynamic system. It's natural. Managing it should be natural too. Applying dampening on the amplitudes would help. That's basically the mandate of central banks. Growth is the consequence of population growth and technological progress and the process of specialization (comparative advantages). All three are in pretty much full force, so it's not just growth because greed. (sorry for double posting :| )

WalterBright 7y ago
The business cycle isn't really a cycle. It's a fractal, chaotic system. A cycle is predictable, a chaotic system is not.
- pas 7y ago
  I purposefully haven't said periodicity or something else (maybe I should have added a bit more detail anyway.) The ebb and flow, the up and down the cycling is known, but when and its magnitude is not. Sure it's chaotic and it probably has scale-free (self-similar or fractional-dimensional) properties at certain regimes, but on the large scale it's pretty well approximated by dynamic systems. (See the micro founded macro models used by central banks.) Of course, we're getting better at modeling both micro and macro behavior of economies. (The caveat is that the economy also evolves so old models usually get less and less accurate, so job security for econometricians.)

bpatel576 7y ago

I think it would be more correct to say that we have cyclical crises because of debt, which is a function of growth.

pas 7y ago
Cycles arise in any complex/dynamic system. It's natural. Managing it should be natural too. Applying dampening on the amplitudes would help. That's basically the mandate of central banks. Growth is the consequence of population growth and technological progress and the process of specialization (comparative advantages). All three are in pretty much full force, so it's not just growth because greed.

fifnir 7y ago

Simple non-growth-based capitalist endeavor that I've been daydreaming about (setting up a supermarket as an example): The goal of Supermarket(SM) is to provide products to customers and a stable occupation for those working in the system, not to maximize profit. SM will only sell to subscribed members. Whenever someone buys something, they pay only the cost of the product, and the purchase is recorded. At the end of each month, SM has to balance its finances: costs have to be equalized with income. We will charge our members an additional % over whatever they bought for this month, just as much as it's needed to balance the books. The more customers we have and the more volume we moved, the less % everyone has to pay. This way, instead of customers paying a predetermined % margin for each product, they pay as little as it's needed to keep things going. They don't pay for anyone's profit.

frozen11b 7y ago
Sound like an interesting twist in co-OP comoany
- didgeoridoo 7y ago
  It sounds precisely like a grocery co-op. Are these not common where you live? https://www.moneycrashers.com/food-coop-costs-benefits-drawbacks/ https://www.moneycrashers.com/food-coop-costs-benefits-drawb...
  - fifnir 7y ago
    Not in my corner of the world unfortunately
  - dgellow 7y ago
    The two largest grocery chains in Switzerland are both cooperatives (they together represent ~70% of retail): - Coop (that's the name) has https://en.wikipedia.org/wiki/Coop_(Switzerland) https://en.wikipedia.org/wiki/Coop_(Switzerland) - Migros https://en.wikipedia.org/wiki/Migros https://en.wikipedia.org/wiki/Migros
7y ago

isoprophlex 7y ago

In medicine you'd call that cancer, so, yeah... Maybe we need something more sustainable than growth for the sake of growth. Also if we're globally maxed out, I think an economy is 'temporal zero sum', if that makes sense: you grow now by borrowing but pay back in the next recession? Totally not an economist though.

dnautics 7y ago
The beauty of free markets (not sure if I'd call it capitalism) is that even if you're resource zero-sum, free markets can still experience growth, by seeking more efficient redistribution of those resources given individual preferences.
- harimau777 7y ago
  As I understand it, free markets determine preferences based on price. However, the price someone can buy something for includes both their desire to pay and their ability to pay. Therefore, I'm not sure that price is always a good metric for allocating resources. Do resource zero-sum, free markets still reliably experience growth from the perspective of someone who doesn't view price as a good measurement of value? If so that would potentially be useful because it could allow more progressive leaning and more libertarian leaning people to find some common ground.
  - dnautics 7y ago
    If you pay for something it means that your value for the money is less than the value of the satisfaction you believe you will get out of it. Money does not magically create an equivalence class of value across all items of the same price.
- aSplash0fDerp 7y ago
  >by seeking more efficient redistribution of those resources given individual preferences. Whats the difference between the wealthy and the rich? ---Freedom Whats the difference between the rich and the poor? ---Nothing Its hard to know if they're talking about AI or the economy when they start using words like manipulation, distortion, smoke-n-mirrors and illusion.

harimau777 7y ago

The problem that I would see is that since wealth tends to be passed on to future generations, without growth it would be difficult for those who currently are not wealthy to ever become wealthy. This is maybe a similar point, but it also seems to me that the without growth we would need to come up with some alternative to 401ks in order to allow people to build wealth.

scythe 7y ago

People ignore the idea "let's not have growth" because it's a bad idea. Here's a quick two-question quiz to determine whether you're in favor of economic growth: - Do you believe wealth and income should be distributed equitably around the world? - Do you want to live on more than USD 17.3k per annum? If you answered "yes" to both of these questions, then congratulations! You're in favor of economic growth. The average global income per capita is USD 17.3k per annum. If that number goes up, we call that "growth". That is the definition of growth. Of course you can get into population control, but if the alternative to growth is China-style population control -- necessarily more severe than just handing out birth control -- then bring on the economic crises, I say.

RaiseProfits 7y ago
> - Do you want to live on more than USD 17.3k per annum? By itself this is meaningless. What does it buy where you are? Most places that’s more than enough to live comfortably. Anyway, money is only useful to decide who starves.
- duxut_staglatz 7y ago
  The more accurate question is do you want to live with whatever goods can currently be bought with USD 17k in the US today?
  - deleted 7y ago
    [deleted]
  - RaiseProfits 7y ago
    I’m not seeing the productivity gains anyway, buddy, I work for minimum wage and you’re barking up the wrong tree. Growth doesn’t matter if it doesn’t reach the people.
    - duxut_staglatz 7y ago
      Yes, indeed. But growth does matter if it reaches the people, which is scythe's point.

Unsimplified 7y ago

You can have growth without unnatural cyclic crises. Focus om the deeper causes of artificial crises (those without actual resource shocks).

Nasrudith 7y ago

The concept of growth is much misunderstood popularly with the various unsustainable growth memes. Growth isn't just more raw resources and finished goods but also development which makes things more efficient. Importantly even if the goal is more environmental sustainability it isn't the enemy. Apply growth in productivity and less land is needed for production and more can be preserved. NYC has more value from Central Park than say the area as a gold mine now. The automation job losses are themselves a sign of it - keeping the same number of employees and adding even more capacity would be wasteful. To go without growth is to surrender entirely and doom oneself to decline. If everyone is working towards something and not experiencing growth by definition something is wrong - that level of effort should lead to improvement over time even if they are just a chain of masters, journeymen, and apprentices. The cycles are a result of phantom growth from phantom values - even if the production is real returns may diminish more than expected.

jariel 7y ago

I don't think the notion that 'growth causes recession' is reasonable in any way. Yes, there are some negative aspects of 'negative growth' in things like deflation which can cause 'downward spirals' but there's no reason we shouldn't be able to grow consistently for the foreseeable future.