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From: abs@rdin.UUCP (Andrew Siegel)
Newsgroups: net.flame,net.politics
Subject: Fallacies of Zero-growth Economies
Message-ID: <464@rdin.UUCP>
Date: Mon, 20-Aug-84 15:14:20 EDT
Article-I.D.: rdin.464
Posted: Mon Aug 20 15:14:20 1984
Date-Received: Wed, 22-Aug-84 03:14:18 EDT
Organization: Resource Dynamics Inc., New York
Lines: 82

I'm amazed at some of the odd ideas that people have about economics.
Specifically, I can't understand what attraction a no-growth economy
would hold for anyone.

Would anyone argue with the fact that almost any *constructive* human
action creates wealth?  Anytime that we convert an item into
a more desirable item, we have added to the wealth of the universe.

Examples: stacking wood; cutting very long pieces of wire
into short ones; writing Lotus 1-2-3; sweeping a floor.

In a way, then, we constantly create order from chaos.

To have an economy with zero-growth, we must synchronize these
constructive acts of order and creation with *destructive* acts of equal
magnitude, i.e. for every floor swept, another one must be dirtied; for
every new time-, energy-, and/or money-saving idea, an old one must be
forgotten.  Clearly, this is ridiculous.


With this in mind, there are some fallacies that I wish to address:

Fallacy 1: A growing GNP means a growing consumption of energy
	   and raw materials.

Response:  This is not true.  Energy and raw materials cost money.
	   Producers want to minimize cost to themselves.  Therefore,
	   there is a tendency to minimize use of these resources.
	   In fact, as technology improves, the energy and materials
	   needed to perform a task (or to create an item) diminish.

	   Example: which costs more to operate, an IBM 7090 or
	   16 IBM PC's?  Which uses less energy for equivalent amounts
	   of work?  Which uses fewer raw materials to provide
	   the same capability?

	
Fallacy 2: In a no-growth economy, "those products that are least needed
	   will no longer be produced", or efficiency will be
	   improved by "flushing marginal products out of the market."
	   (Quoted from an article by Kurt Guntheroth.)

Response:  This assumption indicates that some objective third
	   party somehow knows which products are "least needed"
	   or marginal.

	   If a product is "least needed", but is still being produced,
	   then isn't it obvious that SOMEONE needs it?  After
	   all, manufacturers don't produce merely for the pleasure
	   of seeing their logo on a department store shelf;  they
	   produce for profit.  If no one's buying the product,
	   they'll eventually stop making it.  (Unless, of course,
	   the manufacturer is subsidized.)

	   Anyway, we don't have to wait for a no-growth economy
	   for these things to happen;  the market takes care
	   of these automatically.


Fallacy 3: Isn't there some inherent limit as to how large the
	   economy can grow?

Response:  Wouldn't it have been a tragedy if, after Aristotle
	   said "Objects at rest remain at rest, and objects
	   in motion come to rest", all scientists then and in
	   the future decided that "we know everything there is
	   to know", and stopped thinking?

	   Can anyone say with conviction that we know everything
	   there is to know?

	   We will always learn new concepts and ideas, and we will
	   always be able to apply some of these ideas in order
	   to create more wealth.



Let the GNP determine itself.  Don't mess with it.


				Andrew Siegel
				philabs!rdin!abs (until 8/24)