The Church of GDP

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun
The New York Sun
NEW YORK SUN CONTRIBUTOR

WASHINGTON – What’s the dominant religion of the past 100 years? The answer isn’t Christianity with its 2.1 billion followers or Islam with its 1.3 billion. It’s the idea of economic growth, the Church of GDP. Countless countries have embraced rapid growth as a cure to their ills. Getting richer is now an almost universal craving. And yet, the worship of growth inspires enormous ambivalence. It is widely seen – especially in wealthy societies – as morally corrupting: the mindless pursuit of materialism (do flat-panel TVs make us better off?) that drains life of spiritual meaning and also wrecks the environment.


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.

The New York Sun
NEW YORK SUN CONTRIBUTOR

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.


The New York Sun

© 2025 The New York Sun Company, LLC. All rights reserved.

Use of this site constitutes acceptance of our Terms of Use and Privacy Policy. The material on this site is protected by copyright law and may not be reproduced, distributed, transmitted, cached or otherwise used.

The New York Sun

Sign in or  Create a free account

or
By continuing you agree to our Privacy Policy and Terms of Use