Economic Growth and Increased Wellbeing

In Business, Finance, Management  ||  04-11 ||  Tags: economy   Wellbeing   income  ||  Readers: 78

Overall, the figures for developed countries suggest that, in itself, additional income is unlikely to make much difference to wellbeing

Obviously, however, income matters a great deal for people living in poverty.

There are powerful arguments for more economic growth in countries where a large proportion of the populace lives in poverty.

But this should not be construed  as automatic approval of growth at all costs:

 the nature of the growth process matters.

Increases in average income often conceal widening inequality

and in countries undergoing industrialisation large numbers of people are thrown out of rural impoverishment into a worse condition in the uncontrolled economies of the cities.

 In addition, millions of people who have climbed their way out of poverty have been plunged  back into it by economic collapse with no safety net and in an even worse situation than when they were back in their rural villages and had a plot  of land to rely on.

Below a certain threshold, increasing income does improve wellbeing, but when a nation has risen above that threshold, it is no longer persuasive to argue that even more growth is needed to conquer residual poverty.

Rich nations have in almost all cases been rich for a long time, but even in those nations the problem of residual poverty has become an insoluble one.

Indeed, in most industrialized nations, by some measures poverty rates have actually risen in the last two decades, despite the fact that average incomes have continued to grow. 

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