A recent headline in the Guardian calls for an economic reckoning: “We economists have done the maths: ‘growth’ is a doomed strategy.”
More than 350 signatories, including economists Joseph Stiglitz, Thomas Piketty, Kate Raworth, and anthropologist Jason Hickel, have endorsed an over 100-page “Roadmap for Eradicating Poverty Beyond Growth” that provides a path to end extreme poverty — not by growing the economic pie, but through a global redistribution. While an admirable goal, the analysis is severely misguided and proposes policies that will hurt the poor.
The op-ed column starts with the blatantly false assertion that “we live in an age of manufactured scarcity” (emphasis added). Scarcity is simply the idea that we have limited resources in a world of unlimited wants.
But precisely because of economic growth, we live in a world with less relative scarcity that has eradicated poverty. Two hundred years ago, 80% of the world lived in extreme poverty. Now, less than 10%. And countries that become richer have much lower poverty levels.
The Roadmap itself acknowledges that the share of people in extreme poverty fell dramatically, even over the last three decades, while also recognizing that this progress was historically unprecedented. What it buries is the mechanism: This reduction was driven overwhelmingly by economic growth in areas such as East and South Asia, where hundreds of millions have escaped poverty precisely because of globalization and market liberalization.
The admission that poverty reduction has largely stalled in sub-Saharan Africa runs counter to their claim that “the promise that economic growth would ‘lift all boats’ has not been kept.” Many countries in sub-Saharan Africa have not seen poverty reduction because those countries have not experienced much economic growth relative to the rest of the world.
The boats that were lifted most dramatically were the ones at the bottom. This “post-growth” movement consistently conflates distributional effects in rich countries with the different development successes and challenges of much of the Global South.
Continue reading at The Washington Examiner.
Justin Callais, PhD, is Chief Economist at the Archbridge Institute. He leads the institute's "Social Mobility in the 50 States" project and conducts original research on economic development, upward mobility, and economic freedom. Dr. Callais received his Ph.D. in economics from Texas Tech University and his B.B.A. in economics from Loyola University New Orleans. He serves as an economic consultant at Callais Capital Management, and he is co-editor of Profectus Magazine, an online publication dedicated to human progress and flourishing. In addition, he publishes a regular newsletter on Substack titled "Debunking Degrowth."
Vincent Geloso, PhD, is a social mobility fellow at the Archbridge Institute and co-author of the institute’s “Social Mobility in the 50 States” report. He is senior economist at the Montreal Economic Institute and an assistant professor of economics at George Mason University. He specializes in economic history and the measurement of living standards today and in the distant past. Dr. Geloso earned his Ph.D. in economic history from the London School of Economics and Political Science and his undergraduate degree in economics from the University of Montreal.
Economics of Flourishing
A recent headline in the Guardian calls for an economic reckoning: “We economists have done the maths: ‘growth’ is a doomed strategy.”
More than 350 signatories, including economists Joseph Stiglitz, Thomas Piketty, Kate Raworth, and anthropologist Jason Hickel, have endorsed an over 100-page “Roadmap for Eradicating Poverty Beyond Growth” that provides a path to end extreme poverty — not by growing the economic pie, but through a global redistribution. While an admirable goal, the analysis is severely misguided and proposes policies that will hurt the poor.
The op-ed column starts with the blatantly false assertion that “we live in an age of manufactured scarcity” (emphasis added). Scarcity is simply the idea that we have limited resources in a world of unlimited wants.
But precisely because of economic growth, we live in a world with less relative scarcity that has eradicated poverty. Two hundred years ago, 80% of the world lived in extreme poverty. Now, less than 10%. And countries that become richer have much lower poverty levels.
The Roadmap itself acknowledges that the share of people in extreme poverty fell dramatically, even over the last three decades, while also recognizing that this progress was historically unprecedented. What it buries is the mechanism: This reduction was driven overwhelmingly by economic growth in areas such as East and South Asia, where hundreds of millions have escaped poverty precisely because of globalization and market liberalization.
The admission that poverty reduction has largely stalled in sub-Saharan Africa runs counter to their claim that “the promise that economic growth would ‘lift all boats’ has not been kept.” Many countries in sub-Saharan Africa have not seen poverty reduction because those countries have not experienced much economic growth relative to the rest of the world.
The boats that were lifted most dramatically were the ones at the bottom. This “post-growth” movement consistently conflates distributional effects in rich countries with the different development successes and challenges of much of the Global South.
Continue reading at The Washington Examiner.
Justin T. Callais
Justin Callais, PhD, is Chief Economist at the Archbridge Institute. He leads the institute's "Social Mobility in the 50 States" project and conducts original research on economic development, upward mobility, and economic freedom. Dr. Callais received his Ph.D. in economics from Texas Tech University and his B.B.A. in economics from Loyola University New Orleans. He serves as an economic consultant at Callais Capital Management, and he is co-editor of Profectus Magazine, an online publication dedicated to human progress and flourishing. In addition, he publishes a regular newsletter on Substack titled "Debunking Degrowth."
Vincent Geloso
Vincent Geloso, PhD, is a social mobility fellow at the Archbridge Institute and co-author of the institute’s “Social Mobility in the 50 States” report. He is senior economist at the Montreal Economic Institute and an assistant professor of economics at George Mason University. He specializes in economic history and the measurement of living standards today and in the distant past. Dr. Geloso earned his Ph.D. in economic history from the London School of Economics and Political Science and his undergraduate degree in economics from the University of Montreal.
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