On Economic Growth

Red Baron gets his economic insights from reading the news and articles on the Internet. This means I am no expert, but since my youth, I have always found the credo of a capitalistic liberal economy suspect: Economic growth guarantees prosperity.

On the other hand, capitalism needs economic growth to be stable. Otherwise, crises with millions of unemployed people will create social unrest. But is it possible to grow infinitely in a finite world?

We had accelerated economic growth in the past. It was based on cheap energy and exploiting seemingly unlimited oil, natural gas, coal, ores, and mineral resources.

You may like to add the recent UN Climate Change Conference COP28 in Dubai.

For a long time, we have known that burning fossil fuels accelerates climate change. There were many solutions to reduce the emissions, but action should have been followed. Now we are in front of the shambles or, if you prefer, with the back to the wall. We are now forced to work fast on transforming our economies to green standards to limit global warming.

Some optimists think climate protection and economic growth will go hand in hand. If there are only sufficient incentives for technical progress and innovation, technological progress will generate new jobs and economic development.

 

But will the amount of growth be sufficient to guarantee a stable society? Anyway, it will be necessary to move towards a circular economy. This is the only way to ensure that future growth consumes fewer natural resources.

I fear green energy will only be enough if we learn to limit ourselves. Many managers, entrepreneurs, engineers, and bankers know this but dare not speak out that there will be no green economic growth.

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