Economic Growth

Economic growth is one of those concepts that nobody wants to contradict. Even its detractors cannot avoid using it. They talk about green growth, sustainable growth, and in the most extreme cases, they talk about de-growth.

Yet economic growth, as a concept and a reality, is recent. Modern measures of economic growth are less than a century old, dating back to the invention of GDP by Simon Kuznets in the 1930's. Also, economists mostly agree that economies did not grow before the 19th century, so economic growth—as a phenomenon—is also recent.

As many others, I believe the idea of economic growth is now ready for retirement. The question that lingers, therefore, is what will replace it, since economic growth will leave a void in public speech, as both a staple paragraph of political campaigns and a recurrent topic in newsmedia.

But economic growth cannot last forever. If the GDP per capita of the U.S. grew, in real terms, at a modest rate of 1% for the next millennia, the average American would be making a whopping 1.1 billion dollars a year by the year 3,014.

A more reasonable interpretation of this number is to think that the growth we have seen during the last century was part of an S-shaped curve, a phase-transition. This means that growth will either peter out during this millennium, or that we are measuring the wrong thing. Either way, we can conclude that the idea of economic growth is on its way out.