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Saturday, October 20, 2012

'The Moral Benefits of Economic Growth'

Just a quick reminder of what can happen "if the majority of the people do not see an improving future":

Is the Financial Sector Worth What We Pay It?, Somewhat Logically: ...Benjamin Friedman holds, in The Moral Consequences of Economic Growth, that “greater opportunity, tolerance of diversity, social mobility, commitment to fairness and dedication to democracy” derive directly from economic growth. He shows that even during stagnation–let alone recession and depression–those values can vanish easily. Brad Delong observes, in reviewing Friedman, that if the majority of the people do not see an improving future, these values are at risk even in countries where absolute material prosperity remains high. Given rising political intransigence and loss of common social purpose in the U.S., and the rise of nationalistic political sentiments in Europe, the effects of increasing stagnation and inequality are becoming more evident... All the data seem to affirm Friedman’s assertion that all societal strata should participate to maximize the moral benefits of economic growth. ...
The idea that the key to future stability and prosperity is to tilt the advantages even more toward the wealthy -- more tax cuts at the top and so on -- is crazy. We've had a boatload of tax cuts at the top already and the benefits have not trickled down as promised -- the benefits were anything but widely shared -- and it would be hard to describe the last few years as prosperous. As a consequence, I think we are already seeing a decline in faith that democracy as an institution that works for all of us rather than an institution that gets captured by powerful, wealthy interests. My eyes have certainly been opened the last few years.

    Posted by on Saturday, October 20, 2012 at 09:59 AM in Economics, Income Distribution | Permalink  Comments (31)



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