The Moral Consequences of Economic Growth
The Moral Consequence of Economic Growth
Benjamin M. Friedman
Economic growth, technology progress brings the positive changes in society: open, mobile, generous, tolerant and democratic.
The book elaborated various ideas about economic growth and social progress. At the time of Adam Smith, the early thinkers understood the role of specialization (division of labor) in economic growth. Specialization alone actually made workers quite mechanical and partially resulted in the abhor labor conditions in the early stage of industrialization. Romanticism thinkers turned nostalgia. Marxism believed that the solution is communism. However, over the years, waves of technology innovations, which in turn requires skilled and thus higher paid labor, ultimated moved the society forward economically, politically as well as morally.
The book explains the relationship between economic growth and social progress from human nature point of view. There are always two benchmarks influencing people's decisions: comparing his current life with his previous life and comparing his life with his neighbours' life. When one's economic life stagnates or deteriorate, he tends to react very strongly out of fear that his neighbor might get ahead of him. That's the reason why both individual people and the society tends to be less tolerant towards immigrants, less generous towards the unfortunate in hard times. On the other side, when economy is doing well and people's life standard are improving, people could be open and tolerant and thus the society also moves forward.
The author checked his theory against the history of America, Briton, France and Germany. Laws protecting labors, promoting education, protecting environment, enlarging voting population happened in good times, while populist, KKK, Nazi, etc, happened in bad times. Although there are some exceptions, notably the America in Great Depression era, overall, social progress normally goes along with economic development. In developing counties, economic growth promotes stability while coups, political assassination tends to occur when the economy stagnates.
The Kuznet's curve mentioned in the book is quite interesting. In the early stage of economic development, such as industrialization of a agrarian society, the income inequality increases. However, when the economy develops further, the income inequality actually becomes smaller. In the environment aspects, same thing also happens. The early development put a lot of burden on the environment. Later on, people will treat environment more gently and try to make the development environmentally sustainable.
The ultimate force behind progress is technological innovation and productivity growth, which comes from investment, both in physical capital and human capital. Educating ourselves and our children is of most importance.
A great book. Highly recommended.
Benjamin M. Friedman
Economic growth, technology progress brings the positive changes in society: open, mobile, generous, tolerant and democratic.
The book elaborated various ideas about economic growth and social progress. At the time of Adam Smith, the early thinkers understood the role of specialization (division of labor) in economic growth. Specialization alone actually made workers quite mechanical and partially resulted in the abhor labor conditions in the early stage of industrialization. Romanticism thinkers turned nostalgia. Marxism believed that the solution is communism. However, over the years, waves of technology innovations, which in turn requires skilled and thus higher paid labor, ultimated moved the society forward economically, politically as well as morally.
The book explains the relationship between economic growth and social progress from human nature point of view. There are always two benchmarks influencing people's decisions: comparing his current life with his previous life and comparing his life with his neighbours' life. When one's economic life stagnates or deteriorate, he tends to react very strongly out of fear that his neighbor might get ahead of him. That's the reason why both individual people and the society tends to be less tolerant towards immigrants, less generous towards the unfortunate in hard times. On the other side, when economy is doing well and people's life standard are improving, people could be open and tolerant and thus the society also moves forward.
The author checked his theory against the history of America, Briton, France and Germany. Laws protecting labors, promoting education, protecting environment, enlarging voting population happened in good times, while populist, KKK, Nazi, etc, happened in bad times. Although there are some exceptions, notably the America in Great Depression era, overall, social progress normally goes along with economic development. In developing counties, economic growth promotes stability while coups, political assassination tends to occur when the economy stagnates.
The Kuznet's curve mentioned in the book is quite interesting. In the early stage of economic development, such as industrialization of a agrarian society, the income inequality increases. However, when the economy develops further, the income inequality actually becomes smaller. In the environment aspects, same thing also happens. The early development put a lot of burden on the environment. Later on, people will treat environment more gently and try to make the development environmentally sustainable.
The ultimate force behind progress is technological innovation and productivity growth, which comes from investment, both in physical capital and human capital. Educating ourselves and our children is of most importance.
A great book. Highly recommended.
posted by North Cascade at 10:58 PM
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