How much does economic growth matter anyway?

Chris Bertram writes:

Mill’s idea (endorsed by Rawls btw) that the goal of our policy ought not to be one of continual struggle for growth or for relative advantage once the threshold has been reached where we could all hope to enjoy a satisfactory level of well being seems to be right.

In a forthcoming article, I write:

Just as the present appears remarkable from the vantage point of the past, our future may offer comparable advances in benefits.  Continued progress might bring greater life expectancies, cures for debilitating diseases, and cognitive enhancements.  Millions or billions of people will have much better and longer lives.  Many features of modern life might someday seem as backward as we now regard the large number of women who died in childbirth for lack of proper care.  Most of all, economic growth limits and mitigates tragedies.  It is a simple failure of imagination to believe that human progress has run its course.

If I read Chris correctly, he is saying "so what if Germany is poorer than the United States?" 

It is not my belief that the Germans will be consumed with envy.  I do think that a) the Germans will be missing out on some wonderful gains, b) there is no real standard for "a satisfactory level of well-being," c) a poorer Germany will be much less able to help the truly desperate parts of the world, if only by accepting immigrants, d) this is not a long-run political equilibrium in Germany, and e) at the global level, it is important that Western and European values are prominent, and this does require good or at least a decent growth performance.  Furthermore it is possible to believe a)-e) without seeing status games in relatively healthy Western societies as zero or negative sum.

On growth, keep the following in mind: If we are comparing a two percentage point boost to the growth rate, and starting at real income parity, a time horizon of only 55.5 years is needed to establish a 3:1 ratio of superiority in income.   

I am not not not saying that Chris is a communist or even a socialist, but my reporting would be remiss if I did not point out that defenders of East Germany, in the 1980s, made more or less the same argument as Chris’s bit quoted at the top of this post.

That all said, I am relatively bullish about German recovery, at least compared say to France or Italy.

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