Economic Growth Theories - Costs of Growth - Who pays?
'Growth is good, recession is bad'. This is the standard view of economic growth, and it tends to be treated as the Holy Grail of economic policy. However, it may not always be good. Possible costs of growth include:
- Inequality of income - growth rarely delivers its benefits evenly. It often rewards the strong, but gives little to the economically weak. This will widen the income distribution in the economy.
- Pollution (and other negative externalities ) - the drive for increased output tends to put more and more pressure on the environment and the result will often be increased pollution. This may be water or air pollution, but growth also creates significantly increased noise pollution. Traffic growth and increased congestion are prime examples of this.
- Loss of non-renewable resources - the more we want to produce, the more resources we need to do that. The faster we use these resources, the less time they will last.
- Loss of land - increased output puts further pressure on the available land. This may gradually erode the available countryside.
- Lifestyle changes - the push for growth has in many areas put a great deal of pressure on individuals. This may have costs in terms of family and community life.