Growth is good: mission or mania?

ORIGINAL INTRODUCTION

News that the UK economy is slowly lifting itself back to its pre-crisis 2008 peak has been widely welcomed. Annualised growth rates of nearly three per cent seem possible and some have even trumpeted the UK as the fastest growing economy in Europe. Yet there is also considerable scepticism in some circles about the merits of growth.

It may seem obvious that economic growth is a good thing after many years of belt-tightening and cutbacks. The experience of Greece since the Eurozone crisis, for example, is a salutary example of the hardship and loss of independence that can occur in the absence of growth. Yet the idea that growth should be limited and sustainable was a dominant current of thought before the crisis. Growth was criticised for not making us happy, for damaging the environment, and for increasing inequality in society. These ideas have not disappeared, although those who support them have found it prudent to be rather more muted than before. Nonetheless, continued protests against fracking, against HS2 and against new runways at airports – to take just the case of renewing infrastructure – show that doubts about the value of growth remain.

It is ironic that these doubts should exist at a time when there is actually very little growth taking place. Business investment has yet to take off since the crisis and interest rates remain stubbornly low. There has been little reduction in the US trade deficit and UK productivity has not recovered to pre-crisis levels. Is a lack of faith in growth preventing governments from taking the measures needed to revive their economies? Is this scepticism about the benefits of growth leading policymakers to fall back on financial solutions – like quantitative easing, house-price bubbles and consumer debt – instead of investing for real wealth creation?

Rising prosperity means more choices for us all. The continued existence of some 2.5 billion people living on less than $2 per day should on its own make the case for going flat out for growth to life people out of poverty. Is it possible to make a positive case for growth today or must we accept – perhaps even welcome – limited growth as the ‘new normal’? In the absence of productive growth, is another financial crisis simply inevitable? What can be done to create the conditions for growth, for an economic renaissance?

SPEAKERS

Daniel Ben-Ami
journalist and author, Ferraris for All: in defence of economic progress and Cowardly Capitalism

Ricardo Fuentes-Nieva
head of research, Oxfam GB; co-author. Working for the Few: political capture and economic inequality

Mark Littlewood
director general, Institute of Economic Affairs

Kitty Ussher
managing director, Tooley Street Research

CHAIR
Angus Kennedy
convenor, The Academy; author, Being Cultured: in defence of discrimination