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The Desirability Of Economic Growth Essay

935 words - 4 pages

The Desirability of Economic Growth

The Benefits of Economic Growth
===============================

1. Economic growth means that real GDP has increased and therefore
leads to an improvement in the material standard of living. This means
that individuals have higher levels of real purchasing power enabling
them to buy a greater volume of goods and services - increasing
economic welfare ( bearing in mind individuals have unlimited wants ).
For instance, as western economies have grown over the decades
consider the changes in 'material ownership' of products such as
ownership rates of cars, dishwashers, housing, the number of foreign
holidays taken - all of which have continued to increase as real
spending power has grown.

2. Higher real incomes have enabled individuals to have greater access
to leisure time / activities. People can now satisfy their basic wants
more easily, with less time worked and hence devote more time to
leisure as they do not have to work as long to afford the basic
necessities for life.

3. As the economy grows, governments are able to collect more tax
revenues without increasing tax rates. This allows more resources to
be put into merit and public goods such as education and health
services, as well as funding more social security provision. Thus
better social services can emerge with the population gaining better
access to medical treatment or enjoying better education - helping to
improve living standards generally. Individuals will also have more
confidence that the state will have the resources to look after them
if they become unemployed or in need or support in the community.

( It could even be argued that those economies which have high levels
of real GDP command more political influence and status on the world
stage. They have therefore more powerful voices on the international
stage in organisations such as the United Nations, G8, or the World
Trade Organisation. )

The Costs of Economic Growth
============================

1. Pursuing economic growth policies can have some drawbacks,
affecting the quality of life. Individuals will be required in a
growing economy to learn new skills, be more flexible and often be
more occupationally and geographically mobile ( ie prepared to move
from one type of job to another, as well as be prepared to move
location). The pace of work is thought to be likely to increase, all
combining to add stresses to the individual. It has often be claimed
that the desire for faster economic growth is creating a more hectic
lifestyle - possibly offering less leisure time rather than more !

2. With economic growth comes a growth in consumption, more resources
are needed reducing the remaining supply of non-renewable resources
such as fossil fuels ( oil, gas and coal ), metal ores and other
natural resources. As these are used up at a faster rate, there are
fewer supplies left for future generations. Thus the finite pool is
more...

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