Iain J Coleman has a good post up on Fistful of Euros highlighting this paper by UCDavis economist Peter Lindert (that Carlos mentioned in this Electrolite comment thread about this NYT article about the working poor in America). See what I mean about conversations? Anyway, the paper describes why a high-spending welfare state doesn’t depress GDP (viz., “looks like a free lunch” but isn’t). Here’s Iain’s summary, emphasis mine:
… social spending is good for personal productivity, and democracy is effective in ensuring that real-world governments avoid the costly mistakes that anti-welfare theorists assume. Apart from illustrating the dangers of hand-waving economic arguments, this tells us that the choice between a European-style high-welfare state, and a US-style low-welfare state, has nothing to do with promoting economic growth and is simply a matter of which kind of society we find more pleasant to live in.
I’d better confess that I haven’t read the paper yet and will likely be out of my depth if I do, the dismal science being mostly Martian (or worse, mathematics) to me; but that’s why I read blogs, and the excerpt makes intuitive sense to me. I certainly know which kind of society I prefer; besides, “growth for the sake of growth is the ideology of the cancer cell”1. I keep hearing that modern economic theory is predicated on infinite growth, but that can’t be right: it’s too crazy. Nonetheless, Economic Growth does seem to have become some kind of modern deity, Mammon’s offsider, and it’s not obvious to me that economic growth is intrinsically good, or that the opposite of growth is shrinkage (or stagnation). Why is it bad if we don’t make more, build more, spend more, own more crap this year than we did last year? What has happened to the concept of “enough”, as in, “I have enough, I don’t need more possessions or security, I can afford to pay into a pool of common good from which those in need can draw”? For what kind of person is a bigger television more important than that the hungry should have food?
But as I said, I’m probably just out of my depth.
Update: fixed the link to the Electrolite thread.