Growth scepticism and economic slowdown

A couple of people have asked me what impact I think the current economic slowdown will have on growth scepticism. The assumption behind the question seems to be that economic restraint will somehow make people see the benefits of growth again. In my view the answer is not straightforward but, on balance, the growth sceptics are likely to be strengthened.

It is true that cuts in living standards, or even slow increases in living standards, can generate resentment among those involved. Worrying about the consequences of wealth in the abstract is one thing but adjusting to the reality of lower living standards is another.

But in the current cultural climate it is likely that growth scepticism will be strengthened on balance. For example, striving for growth is likely to be seen as coming into conflict with environmental limits. Or it could also lead to fears of the destabilising consequences of inequality.

Growth scepticism can be seen, at least in part, as a negative and fearful response to the circumstances in which we find ourselves. For example, it was the economic crisis of the early 1970s that played a key role in first popularising the idea of the “limits to growth”.