GDP is a proxy for quality of life. Reason that continuous economic growth is a goal is that the economy has a number of feedback loops it in. If the economy is growing, people are more likely to consume, more people consuming results in more economic growth.
If the reverse is happening, the economy is contracting, this results in people spending less, which results in the economy contracting more, which results in people loosing jobs, those people have less money to spend etc.
Zero economic growth is unstable the slightest bit of noise will cause it to shift into a contraction. So having economic growth and using the limits to the rate of growth to control how much growth happens is much more stable.
You're not wrong but GDP (just like other metrics) are liable to being gamed and over optimized.
I am sure plenty of people across America and western Europe would tell you their quality of life has gone down in the last 30-40 years (as wages have stagnated) and national inequality has increased in these countries.
I personally believe immigration and globalisation more widely are contributing
factors to a wealth redistribution of the middle and working classes of wealthy countries to developing ones.
It's perfectly possible for global inequality to come down while globally local inequality increases. That would be a perfect example of Simpsons paradox - if wealth stratifies in every country you might see this.
That we can't have a nuanced discussion about that without it being shamed as nationalism or racism is dangerous. After all, governments are democratically elected to serve their own people. If they aren't looking after their own citizen's interests are they doing their job? More cynically if you structurally ignore the "proles" then you leave yourself exposed to populism rearing its head.
I don't really have any answers, nor much expertise on these matters but I notice a resoluteness on topics such as GDP which resembles faith more than reason.
Shouldn't we be looking then at GDP per capita? If there's less people, we can still be producing enough so that producers have jobs and get money and want to consume and &c.
I think that one of the issues with this GDP going down, which might not be the same in the US as in the EU, is the redistributive nature of the economy in Europe. Many (most?) social programs are paid for by people currently working and they're paid right away. In other words, you pay for your grandparents' pension, you pay for your neighbour's hospital bill, etc.
A falling GDP due to low fertility often comes with an ageing of the population. Older people usually don't work, usually need more healthcare, etc. Hence there's a growing need of money to redistribute, but less money coming in since there are less young people working.
> A falling GDP due to low fertility often comes with an ageing of the population. Older people usually don't work, usually need more healthcare, etc. Hence there's a growing need of money to redistribute, but less money coming in since there are less young people working.
That's accurate. The main "issue" here is that people live longer, ergo their retirement period is longer. When retirement systems were set up, with the retirement age set to ~65, people lived to be 70. Now they live to be 80, and the retirement age is still at 65.
On the other side: "back in the day", a lot of jobs where quite physical, which made it hard to do them in your 60ies. That's very different today. And of course: productivity gains more than make up for low fertility, we no longer need 30% of the population to work in food production, thanks to automation and modern technology, 1-3% can do the same just fine.
If the reverse is happening, the economy is contracting, this results in people spending less, which results in the economy contracting more, which results in people loosing jobs, those people have less money to spend etc.
Zero economic growth is unstable the slightest bit of noise will cause it to shift into a contraction. So having economic growth and using the limits to the rate of growth to control how much growth happens is much more stable.