Chapter 1

What Growth Is, What Growth Does

Economic growth has become the secular religion of advancing industrial societies.

—DANIEL BELL The Cultural Contradictions of Capitalism

Are we right to care so much about economic growth as we clearly do?

For citizens of all too many of the world's countries, where poverty is still the norm, the answer is immediate and obvious. But the tangible improvements in the basics of life that make economic growth so important whenever living standards are low--greater life expectancy, fewer diseases, less infant mortality and malnutrition--have mostly played out long before a country's per capita income reaches the levels enjoyed in today's advanced industrialized economies. Americans are no healthier than Koreans or Portuguese, for example, and we live no longer, despite an average income more than twice what they have. Yet whether our standard of living will continue to improve, and how fast, remain matters of acute concern for us nonetheless.

At the same time, perhaps because we are never clear about just why we attach so much importance to economic growth in the first place, we are often at cross-purposes--at times we seem to be almost embarrassed--about what we want. We not only acknowledge other values; as a matter of principle we place them on a higher plane than our material well-being. Even in parts of the world where the need to improve nutrition and literacy and human life expectancy is urgent, there is often a grudging aspect to the recognition that achieving superior growth is a top priority. As a result, especially when faster growth would require sacrifice from entrenched constituencies with well-established interests, th...