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Thanks for the post! I’d add just one remark:
>it’ll just increase inequality
According to Pikkety’s (an egalitarian) inequality, if the rate of return on capital r is greater than economic growth g, then wealth inequality tends to increase (though some scholars contend that this is not an adequate explanation for our recent increase in inequality). Thus, I don’t think (consistent) egalitarians would be against growth per se.
>In the end, it’s more important that everyone is better off
True, but wealth inequality implies stark differences in power. Workers often see statements about how distributive policies might entail lower growth as a threat (of deinvestment) from capitalist classes—and that’s quite plausible, at least when it comes to negotiations about sovereign debt. If you think about social issues as sets of bargaining games, it’s quite understandable that some people will commit to egalitarian policies, even if they threaten to yield a lower pay-off—that’s basically how strikes happen (workers don’t directly benefit when factories shut down, but they use it to pressure for higher pay-offs). I don’t fully agree with Gerald Cohen, but I’d recommend it as the best moral analysis I’ve read (in ethics and political philosophy) on distributive justice as a bargaining game.
Thanks for your comment! I agree with your point on how egalitarians can be in favour of growth.
Good point, but I’m not sure that justifies a large number of policies that might lead to lower sustainable growth in the long run in favour of more equality. There’s definitely a balance to strike here I think between making sure power does not get too unequally distributed and growth; it’s not black and white. In particular, you also want to maintain a stable economy and democracy (necessary for growth to be sustainable), which does require solid institutions and I would argue also some degree of egalitarianism. Perhaps some metrics around stability can be added as early indicators to monitor while mainly focusing on sustainable growth? Curious for your thoughts on this. And thanks for the reading tip on Gerald Cohen, will add that to the list :)
Thanks for your answer. I think we mostly agree—I’d welcome metrics on stability and sustainability; and I guess we’d also agree that weighting welfare metrics by some inequality index might yield a useful proxy to capture things like hedonic adaptation and decreasing marginal utility of consumption.
Since you asked for feedback, I’ll try to briefly add some thoughts:
a) People often value equality per se (well, we’re comparing ourselves to others all the time); that’s likely explained by our evolutionary past in egalitarian hunter-gatherer tribes.
b) This doesn’t mean equality is a moral good in itself (though some will advocate it is), but it does mean it’s quite relevant for social stability.
c) I’d be particularly worried about how things like elite overproduction might jeopardize stability ( I don’t endorse Turchin’s dismal predictions, though).
Another argument in favour of replacing GDP or developing a complementary indicator could be that traditional macroeconomic aggregates are designed to measure only the monetary value of final goods produced and are not adequate to capture the role and value of data or non-monetary transactions. Thus, they do not effectively reflect the value created by the digital economy.
Thanks for the comment, that’s a very fair point! There are certainly some issues on how such services are represented in these metrics. I think if we can find a better way to measure the state of the economy that accurately includes this, I would be in favour. This article for example has a proposal to do that.
I don’t think it changes the main argument for focusing on the sustainable economic growth (in that case measured by a more accurate metric) instead of focusing on metrics like happiness or life expectancy (or other metrics not directly measuring economic growth) though. What do you think?
Thanks for the article link. The proposed GDP-B indicator does seem like a step in the right direction. The European Commission is also working on developing a new indicator that does a better job at modelling the digital economy (feasibility study).
Yes, I’m not convinced that well-being metrics alone would do a good job either and your argument for emphasising sustainable economic growth seems quite convincing to me.
This seems like a weird comparison. GDP reflects the total value of goods that people consume, whereas leisure time is just one such good, like food. Nobody cares if the total amount of food each person can eat increases by 1% each year, because 2000 kcal is enough for most people. The amount of leisure time available to people in the industrialized world has increased over the decades, but surely the amount of leisure time we can get will plateau at some point (it’s mathematically impossible for leisure time to exceed 168 hours a week, but it would probably peak below that).