Growth of the past two centuries has not always led to an integral development and an improvement in the quality of life.
To accept the idea of infinite or unlimited growth proves attractive to economists, financiers and experts in technology. It is based on the lie that there is an infinite supply of the earth’s goods, and this leads to the planet being squeezed dry beyond every limit. It is the false notion that an infinite quantity of energy and resources are available, that it is possible to renew them quickly, and that the negative effects of the exploitation of the natural order can be easily absorbed.
The deepest roots of our present failures have to do with the direction, goals, meaning and social implications of technological and economic growth.
People’s quality of life actually diminishes – by the deterioration of the environment, the low quality of food or the depletion of resources – in the midst of economic growth.
Economic growth tends to certain standardization with the aim of simplifying procedures and reducing costs. A politics concerned with immediate results, supported by consumerist sectors of the population, is driven to produce short-term growth.
The foreign debt of poor countries has become a way of controlling them.
The culture of relativism drives one person to take advantage of another, to treat others as mere objects, imposing forced labor on them or enslaving them to pay their debts.
The twenty-first century is witnessing a weakening of the power of nation states, chiefly because the economic and financial sectors, being transnational, prevail over the political.
Economic powers continue to justify the current global system where priority tends to be given to speculation and the pursuit of financial gain. The financial crisis of 2007-08 provided an opportunity to develop a new economy. But the response to the crisis did not include rethinking the outdated criteria which continue to rule the world. Saving banks at any cost, making the public pay the price, only reaffirms the absolute power of a financial system, a power which has no future and will only give rise to new crises.
The economy accepts every advance in technology with a view to profit, without concern for its potentially negative impact on human beings. The principle of the maximization of profits reflects a misunderstanding of the very concept of the economy. As long as production is increased, little concern is given to whether it is at the cost of future resources or the health of the environment.
Some circles maintain that current economics and technology will solve all environmental problems, and argue that the problems of global hunger and poverty will be resolved simply by market growth. People’s quality of life actually diminishes – by the deterioration of the environment, the low quality of food or the depletion of resources – in the midst of economic growth.
Talk of sustainable growth becomes a way of distracting attention and offering excuses.
Finance overwhelms the real economy.
A change in lifestyle could bring healthy pressure to bear on those who wield political, economic and social power. This is what consumer movements accomplish by boycotting certain products. They prove successful in changing the way businesses operate, forcing them to consider their environmental footprint and their patterns of production. When social pressure affects their earnings, businesses clearly have to find ways to produce differently.
Enlighten those who possess power and money
that they may avoid the sin of indifference,
that they may love the common good, advance the weak,
and care for this world in which we live.
IMF report: concern about Income Inequality impacting growth.
Causes and Consequences of Income Inequality: A Global Perspective
Inequality within most advanced and emerging markets and developing countries has increased, a phenomenon that has received considerable attention. President Obama called widening income inequality the “defining challenge of our time.” A recent Pew Research Center survey found that the gap between the rich and the poor is considered a major challenge worldwide, and Pope Francis has spoken out against the “economy of exclusion.” The extent of inequality, its drivers, and what to do about it have become some of the most hotly debated issues by policymakers and researchers alike.
Equality, like fairness, is an important value in most societies. Irrespective of ideology, culture, and religion, people care about inequality. Widening inequality has significant implications for growth and macroeconomic stability; it can concentrate political and decision making power in the hands of a few, lead to a suboptimal use of human resources, cause political and economic instability, and raise crisis risk. The economic and social fallout from the global financial crisis and the resultant headwinds to global growth and employment have heightened the attention to rising income inequality.
Building on earlier IMF work which has shown that income inequality matters for growth, we show that the income distribution itself matters for growth as well. In particular, our findings suggest that raising the income share of the poor and ensuring that there is no hollowing-out of the middle class is good for growth through a number of interrelated economic, social, and political channels.