Mindworks’ Weblog

Thinking Matters

Time for a good recession

Posted by Andrew Cooper on October 23, 2008

Last week’s edition of New Scientist included an excellent series of articles addressing the question ‘Why growth?’.  I remember a close relative of mine raising this question many years ago.  As a  professional non-economist I know that capitalism depends on growth, otherwise how would it be possible to pay bankers bigger bonuses each year (and, OK, pay increased pensions to pensioners etc. etc.).  

The growth imperative means that if there isn’t enough growth in the real economy, it’s necessary to invent an unreal one, based on lending money to people who can’t afford to repay it, and selling the resultant debt to each other while simulatneously short trading banks in the knowledge that they’ll inevitably collapse. Or something.

Also, growth obviously = more wealth which reduces poverty.  Except it doesn’t: at least, not in sub-Saharan Africa where poverty appears to be increasing whilst ‘capital flight’ is on the increase.  Poverty amongst bankers continues to be reduced, though, and it’s good to see Lloyds-TSB’s Chief Executive has still got a grip on the situation, although he probably isn’t destined for a career in the diplomatic service.  Here’s the Daily Mash’s take on the same story.

Economic melt-down punditry continues to be a major growth industry and I’m mildly surprised I haven’t been dragged onto a 24 hour news channel myself yet as they seem to have run out of people with something useful/sensible to say.  On the upside, there’s a good article by Charlie Leadbeatter here and I strongly recommend the Neuropod podcast, produced by Nature, if you’re interested in psychology and neuroscience generally.  The most recent edition includes an interview with an economist turned psychoanalyst who concludes, of course, the the melt-down is all psychology.

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