Growth is another word that I think is misunderstood. We generally think of growth as a good thing. When plants and animals grow, they become more productive. When your knowledge grows, you become wise. When your wealth grows, you have an easier life. When the economy grows, the population becomes wealthier.
There is, however, another side to growth. A person can grow too much and become obese. If a person gains a certain kind of knowledge, he might become a con artist and use it to cheat people. If people become wealthy, they often use their wealth to gain power, while keeping others poor.
Our society is currently worried about AI getting so smart, that evil people might use it to build power for themselves, or the AI machines might go rogue and decide they don’t even need people anymore. If AI can create vaccines quick enough to fight an epidemic, might they also create a lethal infection that has no cure, or hack into the water supply or the energy grid?
Then there’s the population. I talked about this in my blog of April 24, 2024. Population growth is generally thought of as a good thing. There are more people to produce goods and provide services. More children to take care of their elders. The stock market grows and peoples’ savings grow with it.
But with population growth beyond a certain point, comes poverty, homelessness, disease, and social unrest. Civilization crowds out animal life causing extinction of species. The water becomes polluted, and rising carbon dioxide levels lead to global warming, which causes fires and rising coastal waters.
Growth of the economy is one area that most economists seem to agree is a good thing. When I was in the practice of medicine, a private equity firm bought the hospital where I practiced. Certain less profitable services were discontinued; people were fired to save money on payroll, and we started having conferences on “efficiency.” These discussions had nothing to do with improving patient care. They were more concerned with increasing profit. Can a patient be discharged sooner? Can we treat him/her with fewer medications? The theory behind private equity is to buy a company that’s losing money, make it more efficient and thence more profitable, and then sell it for a profit. Unscrupulous investors sometimes pocket the profits and run the hospital into bankruptcy. With fixed payments from Medicare and Medicaid in recent years, many communities have lost their hospitals.
The same goes for other companies. The recent trend in deregulation has made it worse. Companies increase their profits at the expense of efficiency and safety. The company makes more money, but workers get injured due to cuts in safety standards, and customers buy an inferior or dangerous product.
The same reasoning is applied to the nation’s economy. Companies focus on growth rather than quality, and management focuses on their personal wealth rather than the salaries of their employees. This results in increasing profits, and a huge gap between the wealth a few company managers and the rest of the population. With wealth comes power, which the wealthy use to get government contracts. Government spending increases and the national debt grows and grows. Just as with other types of growth, there comes a tipping point. Natural resources are depleted; the government goes bankrupt, and the population rises up in protest, or revolution.
That’s the situation we’re in now. The country is increasingly run by the super wealthy. The water table going down so it’s harder for farmers to grow their crops and feed their animals. Climate change is leading to warmer weather and more severe storms. We have the most advanced medical science in the world, but the poorest health care of any developed nation.
So growth is neither good nor
bad, but without limits, or regulation, it can lead to an existential
crisis.
