More and more economists seem to be coming around to the idea that “low-growth, low-inflation” is the new normal. For most, this is not a change for the better. Because they believe economic progress depends upon economic growth, they hope for private sector “innovation,” or government “stimulus,” to kick-start economic growth.
I’m not an econometrician, of course, but I don’t dread and fear this “new normal.” Rather, I welcome it.
As someone famous once said, “Growth for the sake of growth is the ideology of the cancer cell.” It seems to me that growth is desirable, until we’re done growing. At some point things grow as large as they ought to grow. At that point it’s best that they stop growing.
Growth that is dependent upon depletion of finite natural resources is unsustainable. Growth that is dependent upon an ever-increasing human population is unsustainable. Such growth may create “economic activity” and jobs, in the short run. But in the long run it is deadly, like cancer.
In the “new normal” there probably will be fewer jobs. Nominal incomes may very well stagnate or fall.
But that doesn’t mean humanity’s quality of life will necessarily fall. In fact, I expect our overall quality of life to improve. It will require some discipline, and a transition out of consumerism, but I expect that in the “new normal” it will be easier than ever to lead a very fulfilling and comfortable life with little money. “Economic growth” (at least as traditionally understood) may be unnecessary in a stable population whose basic needs are met.
Looking back at the last 20 years, we’ve seen amazing technological advances that have dramatically improved the overall quality of human lives around the world. The pace of technological achievement we’re seeing these days suggests that the changes that come with the next 20 years will be even more dramatic–to the point of being nearly unbelievable.
I believe we’re transitioning into the next phase of human existence–a phase our ancestors have been anticipating for thousands of years. The future is very bright and is rapidly approaching.
Maybe it’s ironic that we have a pre-existing set of values that are well-suited to the “new normal” and our emerging new world–values we have cultivated over 10,000 years of pre-industrial civilization. The agrarian values of virtue, prudence, thrift, community-based economies, sustainability, reverence for the transcendent and for the natural world, morality, self-reliance, love of neighbors, simplicity–these, I believe, will be the foundations for the peaceful, creative, benevolent societies that will emerge as we leave our ancient struggles behind us.
And if I’m wrong about the direction of humanity, if my technological optimism is misplaced and civilization is in fact proceeding toward collapse rather than toward progress, then it is agrarian values that will sustain us in that future as well.
Rambling thoughts on a rainy Christmas Eve morning…