Slowth is not de-growth.
This is an old chart, ending at 2017 because the metric is no longer updated (chained 2007 dollars). I'll butt splice a more up-to-date series.
Slowth is the secular trend to slowing GDP growth over time. Not unique to #cdnecon
Causes for slowth /2
This is an old chart, ending at 2017 because the metric is no longer updated (chained 2007 dollars). I'll butt splice a more up-to-date series.
Slowth is the secular trend to slowing GDP growth over time. Not unique to #cdnecon
Causes for slowth /2
A lot of people talk about slowth as "secular stagnation" Loss of profitability/productivity (innovation slowdown, blah blah)
The biggest factor is demographic.
This holds across the global north (more industrialized=older, incl China and Sth Korea)
In Canada it looks like this.
The biggest factor is demographic.
This holds across the global north (more industrialized=older, incl China and Sth Korea)
In Canada it looks like this.
The more olds you have in a population, the more restricted/fixed incomes, less purchasing power.
In Canada the biggest component of GDP is household spending, so population aging is a natural drag on growth.
Other reasons for slowth /4
In Canada the biggest component of GDP is household spending, so population aging is a natural drag on growth.
Other reasons for slowth /4
Two other reasons for slowth (beyond pop aging):
1. Climate chaos: more frequent, intense natural disasters: floods, fires, windstorms, earthquakes (maybe Covid?/pandemics?) are interrupting production and making return to "normal" production in a place slow if ever.
/5
1. Climate chaos: more frequent, intense natural disasters: floods, fires, windstorms, earthquakes (maybe Covid?/pandemics?) are interrupting production and making return to "normal" production in a place slow if ever.
/5
Third reason for more slowth post-Covid19 (beyond population aging and climate chaos):
Geopolitical tensions: less certainty re supply chains, and end to exports as default setting for growth strategies. A pivot to domestic, but, back to doh, population aging constraints.
/6
Geopolitical tensions: less certainty re supply chains, and end to exports as default setting for growth strategies. A pivot to domestic, but, back to doh, population aging constraints.
/6
These three reasons (population aging; more intense and frequent climate "events"; and growing geopoliticial frictions) were accelerating pre Covid 19 and will not go away when the virus does.
Expect slowth for a long time.
Why does this matter? (For the degrowth crowd) /7
Expect slowth for a long time.
Why does this matter? (For the degrowth crowd) /7
Slowth is not lovely. A short list why:
1. It increases social and economic tensions. The closer you get to zero growth, the more gains for one group look like losses for another. Crank up the political heat.
/8
1. It increases social and economic tensions. The closer you get to zero growth, the more gains for one group look like losses for another. Crank up the political heat.
/8
Slowth is not lovely #2
Given that growth produced more inequality and/or was not a sufficient condition to reduce inequality (in Canada, both true: we've plateaued at record high rates since 2000ish) it's hard to imagine how slower growth could help address inequality.
/9
Given that growth produced more inequality and/or was not a sufficient condition to reduce inequality (in Canada, both true: we've plateaued at record high rates since 2000ish) it's hard to imagine how slower growth could help address inequality.
/9
Re to Slowth Is Not Lovely #2:
IMF research shows stubbornly high levels of inequality suppress growth.
My take on this, as a mom: the longer you discount a generation of kids' potential because they are poor, the less raw material you have to develop society's potential.
/10
IMF research shows stubbornly high levels of inequality suppress growth.
My take on this, as a mom: the longer you discount a generation of kids' potential because they are poor, the less raw material you have to develop society's potential.
/10
Slowth is Not Lovely #3:
Covid19 has revealed the contours of the Essential Economy, and that we are likely to be dealing with labour shortages at the same time as labour surpluses (not enough workers and too many people unemployed).
This creates real policy challenges
/11
Covid19 has revealed the contours of the Essential Economy, and that we are likely to be dealing with labour shortages at the same time as labour surpluses (not enough workers and too many people unemployed).
This creates real policy challenges
/11
Slowth is Not Lovely #3 cont'd:
Humans are the limiting and potential creating factor in any economy. Can't sustain yourself or grow without capital, to be sure. But growth plans based on money without people is nonsense on stilts. Investments require implementation.
/12
Humans are the limiting and potential creating factor in any economy. Can't sustain yourself or grow without capital, to be sure. But growth plans based on money without people is nonsense on stilts. Investments require implementation.
/12
Slowth is Not Lovely #3 cont'd:
How to thread the needle between income supports (during Covid, keep people at home, not scrambling for any job, to reduce transmission rates) and making work pay?
This is the perennial (non-Covid) problem re policy design for working-age pop.
/13
How to thread the needle between income supports (during Covid, keep people at home, not scrambling for any job, to reduce transmission rates) and making work pay?
This is the perennial (non-Covid) problem re policy design for working-age pop.
/13
Slowth is Not Lovely #4
This brings us to that hit question: Why Not Just Cut Everyone a $2,000 Cheque?
Even during Covid19, most Canadians are still working. A good chunk of them are vulnerable workers (lowpay, no protections, public facing), taking care of the vulnerable.
/14
This brings us to that hit question: Why Not Just Cut Everyone a $2,000 Cheque?
Even during Covid19, most Canadians are still working. A good chunk of them are vulnerable workers (lowpay, no protections, public facing), taking care of the vulnerable.
/14
Slowth is Not Lovely #4 con't.
Financial help is needed, but not uniformly, and not just to the unemployed either. (Covid19 revealed unpredictable incomes of gig and precarious workers is a real issue, for households and for the economy as a whole.)
This is tricky because
/15
Financial help is needed, but not uniformly, and not just to the unemployed either. (Covid19 revealed unpredictable incomes of gig and precarious workers is a real issue, for households and for the economy as a whole.)
This is tricky because
/15
Slowth Is Not Lovely #4 cont'd
Income supports are critical to provide stability in household incomes, during seismic events like Covid, but in less stressed times too for a certain % of the population.
Which %?
How much help?
/16
Income supports are critical to provide stability in household incomes, during seismic events like Covid, but in less stressed times too for a certain % of the population.
Which %?
How much help?
/16
Slowth Is Not Lovely #4
How to design income supports when population aging means we'll need all hands on deck to do the work of the Caring Economy, the Essential Economy (no the robots will not be eating allathejobs, anytime soon) so we need work to pay.
Even more tricky.
/17
How to design income supports when population aging means we'll need all hands on deck to do the work of the Caring Economy, the Essential Economy (no the robots will not be eating allathejobs, anytime soon) so we need work to pay.
Even more tricky.
/17
Slowth is not Lovely #5
Even more tricky than designing a robust social safety net is paying for it, when a growing share of your population is either too old or too young to work.
So you're asking the people who *do* work to pay for those who may choose not to work.
Tricky.
/18
Even more tricky than designing a robust social safety net is paying for it, when a growing share of your population is either too old or too young to work.
So you're asking the people who *do* work to pay for those who may choose not to work.
Tricky.
/18
Herein endeth the epistle, "Slowth Is Not Lovely".
And that isn't even the "de-growth" edition.
Dear de-growthers: watch what you wish for, for you may get it.
!Fin!
And that isn't even the "de-growth" edition.
Dear de-growthers: watch what you wish for, for you may get it.
!Fin!
