Another "simple" economics question

[sam h]

What causes economic growth (in the long-term)?

[beta1607]

sustained consumption.

[vulturesrow]

[ QUOTE ]
sustained consumption.

[/ QUOTE ]

"...the encouragement of mere consumption is no benefit to commerce; for the difficulty lies in supplying the means, not in stimulating the desire of consumption; and we see that production alone furnishes those means. Thus, it is the aim of good government to stimulate production, of bad government to encourage consumption."

-Jean Baptiste Say

[mrgold]

[ QUOTE ]
[ QUOTE ]
sustained consumption.

[/ QUOTE ]

"...the encouragement of mere consumption is no benefit to commerce; for the difficulty lies in supplying the means, not in stimulating the desire of consumption; and we see that production alone furnishes those means. Thus, it is the aim of good government to stimulate production, of bad government to encourage consumption."

-Jean Baptiste Say

[/ QUOTE ]

I completely agree but we are stuck in a mindset that measures economic growth in pure consumption. Our whorishly commercial culture creates demands for otherwise unnessecary goods and then fills that deamnd and tacks both the cost of the advertisment for and the production of the previously unnesecaray goods on to the GDP and calls it growth. I know that the beauty of the market system is that it allows individuals to determine their own valuations of goods, but can we really say that a 200 dollar pair of underwear represents 200 dollars of economic growth if the desire for that underwear was created by advertisments. Or are people entirely rational for beeing willing to spend ungoldy amounts of money on brand name items?

[Darryl_P]

Sharp post. Reminds me of something called "True Cost Economics", the principles of which I think are brilliant...

http://www.gnn.tv/B02932

Edit: another link:

http://adbusters.org/metas/eco/truecosteconomics/

[SheetWise]

[ QUOTE ]
... but can we really say that a 200 dollar pair of underwear represents 200 dollars of economic growth if the desire for that underwear was created by advertisments.

[/ QUOTE ]
Yes. Call it a tax on stupidity if you like, but the process employs creative talent and supports the medium that distributes it.

[mrgold]

but it produces nothing of value. should we really define our economic progress by what we can sell rather than what we can produce. i beleive you (not positive about this but it was definitely some economic conservative on this site) made a post a little while talking about why breaking a window to boost market demand was a bad idea. It was said that it might boost demand for glass blowers and create jobs in that industry but that there would be hidden costs such as what might be purchased if the window were not broken or the labors of a man in a different carear who chose not to be a glass blower. I believe the above situation is an entirely similar one from a pracitical economic perspective if not a moral one.

[Exsubmariner]

Participation of more and more people in the established economic system. This can be achieved through trade, competition, the lending of capital, and when all else fails, slavery for free labor.

At least, that's my short version.

X

More people participating in the economy is one part of it.

The other is greater expertise, greater capital (as in machines, factories and systems for making things), and increases in efficiency.

[mrgold]

The economy is always limited by the full employment level. Long term economic growth is impossible with out technological growth and improvments in the capabilites of the workforce (education, poppulation growth, etc...).