CM Lost Me When Discussing Growth and Prosperity

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techwreck's picture
techwreck
Status: Member (Offline)
Joined: Sep 4 2011
Posts: 1
CM Lost Me When Discussing Growth and Prosperity

CM uses the terms "growth" and "prosperity" in Chapter 5 as though they have universal definitions. They do not.  The examples provided involve physical growth of a human with no comparison to prosperity, and growth of a family (family size) vs. family prosperity (quite a different context).

But, then the question that is raised is, "What’s going to happen when 100% of our surplus money or energy is being used to simply grow?", implying that the issue is the growth of national or world economies which is another different context altogether.

In Chapter 1, CM says, "It's very important to distinguish between facts, opinions, and beliefs."  But when Chapter 5 states, "Growth is actually a consequence of surplus", and " Key Concept #2: Growth does NOT equal prosperity", it is difficult to tell whether we are discussing facts, opinions, or beliefs.

My understanding is that economies, local, state, and national, have natural cycles of growth and recession depending on economic and non-economic conditions.  These cycles have little to do with "surplus", however it is defined, and much to do with confidence in the future and the availability of credit, as well as the availability of the resources of production, such as energy, labor, and materials.  So, to define economic growth as dependent on "surplus" or "equal to prosperity" makes little economic sense to me.  Economic growth is desirable because the alternative is recession, and that growth is dependent on an adequate supply of capital, labor, and materials, as well as on public confidence in the future and government policies that facilitate, rather than hinder, the economy.

Further, it is a "given" that economic growth does not equal prosperity for everyone.  In a free market economy there are winners and losers, depending on competitive factors.  The goal of economic growth is usually stated as "a reasonable return on investment' or a low unemployment rate, rather than in terms of prosperity.  Granted, governments do measure changes in income, but these changes are due to many factors, growth being just one of them.

I hope other readers with more experience with CM's work will explain what I am missing and what the relationship is between surplus, growth, and prosperity in an economic context.

livsez's picture
livsez
Status: Bronze Member (Offline)
Joined: Dec 1 2008
Posts: 70
 I gave up a long time ago

 I gave up a long time ago trying to convince people who want to zero in on one or two details that for them discredit the entire Crash Course.  Many of those same people have since contacted me with the same question;  "What was the link to that Crash Course thing again?"  All I can say to you is finish watching the entire Crash Course (as well as reading the book), preferably in a group setting and not in one session, and then see if you still feel lost, or can trust yourself enough to begin investigating the "What should I do" series as well as all the other wealth of insight offered here.  This community is chock full of resources, information and intelligent people from all over the planet.  I'm sure we would all love to have you join in on the conversation.

All the best,

Livsez

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
It can take a while...

I see this is your first post...  so first, welcome to CMdotcom, and secondly, yes it will take you a while to digest the CC entirely, and most importantly, come to grips with its impications.  I've seen the CC a dozen times, mostly in group situations.  Hang in there....

Surplus IS essential to growth.  I don't understand why you can't see this.  if you have "just enough", you can get by and neither grow nor die, and if you have too little, well you'll just shrink!  So of course surplus allows you to grow.  Surplus food is what's making people obese.

You say "Economic growth is desirable because the alternative is recession, and that growth is dependent on an adequate supply of capital, labor, and materials, as well as on public confidence in the future and government policies that facilitate, rather than hinder, the economy."

More than that, "Economic growth is desirable" because without it debts cannot be serviced as money cannot be printed to pay the interest without causing high or hyper inflation.

As we hit "peak everything", growth will end (has ended?) and debts will not be serviced....  which is exactly what is starting to happen.  Once Peak Oil enters the fray in a serious fashion (ie, shortages, $5+ a gallon gas, next year?) then this recession will turn into a depression, only this time it will not end, at least not until the population has shrunk to such an extent those left are able to survive on NATURAL capital.  That's if there will be any left!

Personally, I believe that growth is UNDESIRABLE.... and I have restructured my entire life to this belief.

Mike

jrf29's picture
jrf29
Status: Gold Member (Offline)
Joined: Apr 18 2008
Posts: 453
Re: Growth and Prosperity

I'm not sure that I understand your question, but I'll give it a shot.  It seems that you are asking whether it is true that growth does not equal prosperity.

I think that we can agree that both growth and increasing prosperity depend on surplus.  Economic cycles are caused by a lot of things, such as confidence in the future, availability of credit, mass psychology, government policy, etc.  But without surplus energy, labor, and capital, nothing will happen.  Capital is any form of wealth that is devoted to increasing production, and itself is the result of the application of energy to natural resources.  Labor is drawn from that portion of the human population that has free time left over after all the food necessary for their survival has been obtained, which is again a product of energy and natural resources. 

Once a surplus of energy and capital has been found, we can do two things with it: we can grow the economy in terms of scale, or we can support the existing population in greater luxury. 

Prosperity can be an incident of economic growth.  Economic growth provides the opportunity for prosperity, since works of labor and investment must be undertaken to achieve the economic growth.  Additional jobs are created by economic growth, etc.  But economic growth does not EQUAL prosperity.  That is, the two are not one in the same.  If the population grows by 3%, and the number of jobs grows by 3%, then the economy will be bigger, but net prosperity has remained the same. 

You can have an exponentially increasing number of humans consuming an exponentially increasing share of natural resources (and hence an economy growing in size), but no increase in per capita material prosperity.  So while growth can result in prosperity under some circumstances, it does not equal prosperity.  The two are not necessarily the same thing.  That's the point.

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