The economy has to grow

In a vicious circle - the economy has to grow - at any cost?

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We have everything we need. And yet industrialized nations are constantly producing even more. The economy is forced to grow, says the Swiss economist Mathias Binswanger in his latest book.

Author: Norbert Bischofberger

Mathias Binswanger describes the development of economic growth as “from promise of salvation to compulsive action”. Economic growth generates prosperity. This has worked well in rich countries so far. The disadvantages are now becoming increasingly visible: stress or high environmental pollution.

Arousing needs instead of meeting them

Mathias Binswanger notes that we have gotten into a kind of vicious circle: “An economy of meeting needs has become an economy of awakening needs”.

New needs have to be constantly awakened in order to stimulate consumption and economic growth. The car market, for example, has long been saturated. It is only about bringing faster, heavier, more luxurious or more efficient cars onto the market.

Mathias Binswanger

economist

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Mathias Binswanger, the link opens in a new window is professor of economics at the University of Applied Sciences Northwestern Switzerland in Olten and private lecturer at the University of St. Gallen. He was visiting professor in Freiberg in Germany, at the Qingdao Technological University in China and at the Banking University in Saigon (Vietnam).

Mathias Binswanger is the author of numerous books and articles in specialist journals and in the press. His main research interests lie in the areas of macroeconomics, financial market theory, environmental economics and research into the relationship between happiness and income.

In 2017, the Neue Zürcher Zeitung ranked Mathias Binswanger among the three most important economists in Switzerland based on her influence in public. His theses are impressive. He likes to speak of the “treadmills of happiness”: More prosperity does not make people in rich countries happier or happier.

There are other models

Mathias Binswanger comes to the conclusion in his analysis: “Competition is part of capitalism like competition is part of sport”. He considers stock corporations to be growth drivers. However, there are cooperative forms of economic activity such as car sharing or cooperatives for housing or energy.

Mathias Binswanger gives examples of SMEs that are successful without growth: a wooden furniture manufacturer, a brewery, a printing company or a shoe retailer.

Book reference

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Mathias Binswanger: «The need to grow. Why the economy has to keep growing, even if we have enough », Wiley-VCH Verlag, Berlin 2019

For his critics, these are "sandpit games". You reply: Without growth there is no innovation, no development, no prosperity. Schools, health care, social services or old-age provision would be financed through economic growth and tax revenues.

Rebuild capitalism

The strength of Mathias Binswanger's book lies in its analysis. He dissects the need to grow with a knife-edge. He picks up on a discomfort. Many people feel: We have reached a limit. It cannot go on like this, the pursuit of growth and ecological goals cannot be reconciled.

Anyone who expects ready-to-use solutions will be disappointed. Mathias Binswanger describes his book as “growth-friendly and growth-critical”. He suggests to alleviate the urge to grow and shows how a purely capitalist economic system could be rebuilt. The general direction is clear: less is more.

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  • Comment from Amos Zweig (Amos Zweig)
    Lately I have often heard the argument that infinite growth is not possible on a finite world, and that therefore capitalism is doomed and will collapse sooner or later.
    Not even the first part of this statement is true, and the second part is certainly not true! Capitalism can just as well control the growth as well as the contraction of the economy optimally.
    I go into all of this in detail on my blog.
    Agree Agree to the comment Select answers to reply to the comment
  • Comment from A. Keller (eyko)
    I don't want to be a more economy. I don't want to grow anymore, I don't want to produce as much more from year to year as I did before. Infinite growth is not possible on a finite planet! Infinite economic growth cannot exist because there are only limited areas and raw materials. As soon as these have reached a limit, there can be no more economic growth. Our planet is suffering more and more and nobody wants to see it. Limit economic greed so that everyone is well.
    Agree Agree to the comment Select answers to reply to the comment
    1. answer from Olivier Wetli ("out of this world")
      I don't even see it because of limited resources, because if we had almost unlimited resources, the greed would only increase! I can fully sign your first sentence! But I have to check myself again and again. The greed that slumbers in all of us. And as you wrote a post before: It has nothing to do with right or left, these are just different ways of satisfying the same greed.
      Agree agree to the comment
    2. Show answers
  • Comment from A. Keller (eyko)
    Our economy has to grow constantly. Right and left politicians have held on to it for ages. It's time to stop! So far it has been a good thing. Many people believed in more the following day, the following year, the following decade, entrepreneurs trusted in the success of their inventions and projects, and most of the time people actually had more money, more televisions, more prosperity. The economy must be dampened for the benefit of all.
    Agree Agree to the comment Select answers to reply to the comment

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