Exactly
wrong, says Benjamin Friedman.
Friedman,
a Harvard economist, has written a hugely provocative book (``The
Moral Consequences of Economic Growth'') arguing that rapid growth
is morally uplifting. ``Economic growth -- meaning a rising standard
of living for the clear majority of citizens -- more often than
not fosters greater opportunity, tolerance of diversity, social
mobility, commitment to fairness, and dedication to democracy,''
he writes. Further, the opposite is true. Poor growth feeds prejudice,
class conflict and anti-democratic tendencies.
Look at
history, he says. In the United States, exploding economic growth
after World War II coincided with a broad expansion of rights
for women, blacks and the poor. During the prosperous Progressive
Era, from roughly 1895 to 1919, the ``idea of mass high school
education first took hold.'' In 1912, the federal government created
a Children's Bureau to discourage child labor. In the same year,
Congress passed the 17th Amendment switching the election of senators
from state legislatures to popular vote. In 1919, it passed the
19th Amendment giving women the vote.
Good times
often played out similarly in Europe. From 1850 to 1870, Britain's
per capita incomes rose 35 percent. In 1870, the government opened
civil service jobs -- until then reserved ``for candidates with
family connections'' -- to competitive testing. Comparable reforms
broadened the military's officer corps. Religious tolerance improved;
no longer was membership in the Church of England required to
teach at Oxford and Cambridge. After the Franco-Prussian War of
1870, France also prospered: in 1875, it adopted universal male
voting; in 1881 and 1882, it embraced compulsory schooling up
to age 13.
Nazi Germany
is, of course, the classic case of the converse: that growth's
absence is morally destructive. From 1929 to 1932, German industrial
production dropped 42 percent; in 1932, unemployment was 44 percent.
The rest is history.
People,
Friedman argues, instinctively compare themselves to ``two separate
benchmarks: their own (or their family's) past experience, and
how they see people around them living.'' When living standards
rise rapidly, more people feel optimistic, unthreatened and tolerant.
Economic growth isn't mainly about greed.
Case closed?
Well, not exactly.
One problem
is that Friedman's meticulous scholarship unearths much contrary
evidence. In the United States, the Great Depression didn't diminish
democracy; instead it ``fostered a broader commitment to opportunity
and mobility for all citizens.'' Britain passed momentous reforms
(unemployment insurance, old-age pensions) from 1908 to 1911,
a period of weak growth. Among poorer countries, many (Chile,
South Korea, China) achieved rapid growth under authoritarian
regimes, though Chile and South Korea are now democratic.
Up to a
point, Friedman's moral case for economic growth is solid. True,
growth alone rarely creates happiness. Beyond a certain income,
happiness depends on family relationships, a sense of belonging,
personal beliefs. But growth sure can cure misery. In the 1700s,
life expectancy in France was 25 years, and about 30 percent of
infants died before their first birthday. Now, life expectancy
in advanced countries is almost 80, and infant mortality is usually
less than 1 percent. Anyone who cares about world poverty must
favor economic growth.
Another
moral plus: societies whose politics focus on the sharing of prosperity
can promote their own stability. First, everyone can win. Second,
though remaining economic conflicts can be nasty, they're easier
to mediate than religious or ethnic differences -- where one side
must face eternal damnation or discrimination. It's no accident
that the United States and Britain are the oldest successful democracies.
But Friedman
mostly misses the real growth predicament facing most advanced
societies. It's not environmental spoilage. As he notes, most
rich societies protect their environments through tougher anti-pollution
regulations. In the last two decades, U.S. emissions of sulfur
dioxide are down 54 percent, he reports. Whether global warming
breaks this environmental truce remains to be seen.
The immediate
dilemma involves the welfare state. It requires fast economic
growth to generate the income and government revenues to pay all
the promised benefits. But the mounting costs of those benefits
-- especially as populations age in the United States, Europe
and Japan -- may stifle growth through higher taxes and budget
deficits. If so, the welfare state may cause the stagnation and
strains against which Friedman warns.
