Why Growth Is Stupid

Summary

In this video, Gary critiques the common narrative that economic growth is the solution to all problems, highlighting the disconnect between rising GDP and declining living standards for the average person. He challenges the notion that productivity is the sole issue, pointing out the explosion of wealth among the richest while the middle class struggles. Gary emphasizes the growing inequality as the real problem, suggesting that the focus on growth without addressing this disparity is misguided and calls for a shift in priorities to tackle the root cause of economic disparity.

Takeaways

• 📉 The speaker challenges the notion that economic growth is the ultimate solution to societal problems, suggesting that it's often used as a distraction from deeper issues like inequality.
• 🇬🇧 The British economy is highlighted as an example where productivity is not the main issue, despite claims by figures like Mark Carney, the former head of the Bank of England.
• 🌍 The script points out that falling living standards are not just a UK issue but a global phenomenon affecting middle classes across various countries.
• 💡 The disconnect between stagnant or falling productivity and the increasing wealth of the richest individuals is emphasized, questioning the focus on productivity as the sole economic indicator.
• 📊 Productivity is defined as GDP per worker or per hour worked, suggesting that the real issue might be with the distribution of economic growth rather than its rate.
• 🚀 The script criticizes the obsession with GDP growth, which continues to rise while ordinary people's living standards decline, indicating a flawed economic model.
• 💰 It is argued that the wealth of the richest is increasing rapidly, even as the living standards of the majority are falling, suggesting a systemic issue with wealth distribution.
• 🏦 The speaker calls out economists and politicians, many of whom are wealthy themselves, for blaming the public for economic issues instead of addressing inequality.
• 🤔 The term 'productivity' is scrutinized as a moralistic term that shifts the blame onto workers rather than examining the structures that create inequality.
• 📈 The script suggests that the focus on growth without a plan is absurd, especially when the funds for growth are not accessible to the majority of the population.
• 📢 A call to action is made for people to demand solutions to inequality from politicians, rather than accepting the status quo and the empty promise of growth.

Q & A

What is the main argument presented by Gary in the video?

Gary argues that the focus on economic growth and productivity as the sole solutions to economic problems is misguided. He suggests that the real issue is the growing inequality, where the rich are getting richer while the living standards of the majority are falling.

What does Gary suggest is the problem with the British economy according to Mark Carney?

Mark Carney, the former head of the Bank of England, suggests that the British economy is not productive enough, implying that productivity is the fundamental issue affecting the UK's economic health.

How does Gary refute the idea that productivity is the main issue affecting living standards?

Gary points out that if productivity were the main issue, we would expect to see a decline in living standards specifically in the UK. However, he notes that living standards are falling globally, indicating a more systemic problem.

What evidence does Gary provide to counter the productivity argument?

Gary cites the growth in wealth among the richest individuals and the record highs in stock markets worldwide, suggesting that if productivity were truly the issue, these indicators of wealth accumulation would not be occurring.

What is Gary's view on the role of economists and politicians in addressing economic issues?

Gary criticizes economists and politicians, particularly those who are wealthy themselves, for failing to address the issue of inequality and instead focusing on growth as a solution, which he believes is a simplistic and misguided approach.

What is the term 'productivity' defined as in the context of the video?

In the video, productivity is defined as GDP per worker or GDP per hour worked, essentially measuring the economic output per unit of labor.

How does Gary describe the current state of GDP growth in relation to living standards?

Gary notes that while GDP has been growing over the years, this growth has not translated into improved living standards for the majority of people, especially when compared to the wealth accumulation of the richest individuals.

What does Gary suggest is the fundamental problem with the global economy?

Gary suggests that the fundamental problem is not a lack of productivity or economic growth, but rather the growing inequality where wealth is increasingly concentrated among the rich.

What is Gary's critique of the current approach to solving economic issues?

Gary criticizes the current approach for being overly simplistic, with a focus on growth without addressing the underlying issue of inequality, which he believes is the real cause of declining living standards.

What does Gary propose as the solution to the economic issues discussed in the video?

Gary proposes that the focus should shift from growth to addressing the growing inequality, suggesting that this is the real issue affecting the living standards of the majority.

How does Gary describe the situation where growth is used as a catch-all solution by economists and politicians?

Gary describes this situation as 'growth is stupid,' indicating that using growth as a blanket solution without a comprehensive plan to address inequality is unhelpful and misguided.

Outlines

00:00

📉 The Illusion of Productivity and Economic Growth

In this first paragraph, the speaker challenges the notion that economic growth, particularly in the UK, is the solution to all economic problems. The speaker cites Mark Carney, former governor of the Bank of England, who attributes the British economic decline to a lack of productivity. However, the speaker argues that while productivity might not be collapsing, living standards are falling globally, not just in the UK. This suggests that the problem is not solely productivity but also growing inequality. The speaker points out the disconnect between the stagnation of productivity and the explosion of wealth among the richest individuals, questioning the focus on growth as a panacea while ordinary living standards deteriorate.

05:01

🤑 The Disconnect Between Wealth and Productivity

The second paragraph delves deeper into the issue of economic inequality. The speaker criticizes Mark Carney, highlighting his privileged background and questioning his perspective on productivity as the sole economic issue. The speaker emphasizes that productivity is essentially GDP per worker or GDP per hour worked, and while GDP has been growing, it has not translated into improved living standards for the majority. Instead, the wealth of the richest has skyrocketed, indicating a systemic issue with wealth distribution rather than productivity. The speaker also criticizes other economic figures, such as Andrew Bailey, for blaming workers for inflation, suggesting a broader problem of economists and politicians failing to address the real issues of inequality.

10:03

📈 The Folly of Growth as a Cure-All

In the final paragraph, the speaker argues that the insistence on growth as the primary economic solution is misguided and reflects a lack of understanding of the problem of inequality. The speaker points out that despite the rhetoric of growth, there is no concrete plan to achieve it, especially when considering the lack of funds for people to spend. The speaker calls for a reevaluation of the focus on growth and a shift towards addressing the growing inequality, which they see as the root cause of the collapse in living standards. The speaker ends with a call to action, urging viewers to demand solutions that tackle inequality, not just economic growth.

Keywords

💡Productivity

Productivity refers to the efficiency with which goods and services are produced in an economy. It is often measured as GDP per worker or GDP per hour worked. In the video, the speaker challenges the notion that the British economy's problems stem from a lack of productivity, pointing out that while productivity may not be growing rapidly, it is not the sole cause of economic issues, especially when wealth inequality is also at play.

💡Economic Growth

Economic growth is the increase in the production of goods and services in an economy over time. The video critiques the idea that economic growth is the ultimate solution to economic problems, arguing that while it is often pursued, it has become a hollow goal when it doesn't translate into improved living standards for the majority of the population.

💡Wealth Inequality

Wealth inequality refers to the uneven distribution of assets among different social classes or individuals within a society. The video emphasizes that wealth inequality is a significant issue, with the rich getting richer while the living standards of the average person decline, highlighting a disconnect between economic growth and equitable distribution of wealth.

💡Living Standards

Living standards are the level of comfort and well-being that a person or group enjoys, often measured by income, housing, and access to services. The script discusses the decline in living standards across the world, especially for the middle class, as a key issue that economic growth alone does not address.

💡Mark Carney

Mark Carney is a former governor of the Bank of England and Bank of Canada, mentioned in the video as an example of an elite economist who attributes economic problems to productivity issues rather than wealth inequality. His perspective is criticized for not acknowledging the broader economic challenges faced by ordinary people.

💡GDP

Gross Domestic Product (GDP) is the total value of goods and services produced over a specific time period within a country's borders. The video uses GDP as a measure of economic activity, noting that while GDP has been growing, it does not necessarily reflect improvements in the living standards of the average citizen.

💡Inequality

Inequality is the difference in status, rewards, or resources within a society. The script argues that economists and politicians often overlook the issue of inequality, focusing instead on growth metrics like GDP, which can mask the reality of increasing disparities in wealth and living conditions.

💡Middle Class

The middle class is a social group that falls between the working class and the upper class in terms of income, social status, and wealth. The video points out that the middle class is experiencing a decline in living standards, which is indicative of broader economic issues that growth alone cannot solve.

💡Elites

Elites refer to individuals or groups with significant influence or power, often due to wealth or social status. The script criticizes economic elites, like Mark Carney, for failing to address the issue of wealth inequality and instead blaming economic problems on the productivity of the general population.

💡Investment

Investment in the economic context refers to the use of money in the hope of achieving benefits in the future, such as funding infrastructure or businesses. The video suggests that without proper investment, calls for economic growth are empty promises, as growth requires capital to drive improvements and development.

💡Cancer of Inequality

The term 'cancer of inequality' is a metaphor used in the video to describe the destructive and pervasive nature of wealth inequality. It suggests that inequality is a systemic problem that, if left unaddressed, will continue to undermine economic stability and social well-being.

Highlights

The speaker challenges the notion that economic growth is the primary solution to economic problems, suggesting that it may be a simplistic view.

Mark Carney, former head of the Bank of England, is quoted as saying that the British economy is not productive enough, which the speaker disputes.

The speaker argues that living standards are falling not just in the UK but across the world, indicating a global issue beyond just productivity.

Despite claims of low productivity, the speaker points out that GDP has continued to grow, contradicting the narrative of economic collapse.

The wealth of the richest individuals is increasing rapidly, even as the living standards of the average person decline, highlighting a growing inequality.

The speaker criticizes the focus on GDP growth as a measure of economic health, suggesting it may not reflect the well-being of the majority.

The speaker questions the advice from wealthy economists and politicians who blame the public for economic issues, rather than addressing systemic problems.

Economists are accused of having a blind spot regarding inequality, with an obsession on growth as the primary economic goal.

The speaker suggests that the mantra of 'growth' has become a distraction from addressing the root causes of economic disparity.

The transcript discusses the absurdity of politicians and economists advocating for growth without a clear plan or understanding of its implications.

The speaker calls for a reevaluation of the focus on growth, suggesting that it has become a meaningless word without a coherent strategy.

The wealth of the richest continues to grow, even as economic growth is cited as the solution to falling living standards, creating a paradox.

The speaker emphasizes the need for the public to demand more from politicians, focusing on addressing inequality rather than just economic growth.

The transcript concludes with a call to action, urging viewers to recognize that the real issue is not growth, but the inequality in wealth distribution.

The speaker argues that without addressing inequality, any talk of economic growth is futile and will not improve living standards for the majority.

The transcript ends with a strong message that the focus should shift from growth to addressing the growing inequality in wealth.

Transcripts

welcome back to Gary's economics today

we are going to talk about why growth is

stupid all right this is a thing which

I've been thinking about for a while and

um it was prompted this week by an

article which I read in the New Yorker a

good long article about British

economics uh by a guy called Sam Knight

um where he talks about basically the

collapse of the British economy the

collapse of British politics a lot of

people are looking us saying what's

going on in Britain it's falling apart

and he interviewed a guy called Mark

Carney who is a former governor of the

bank of England he was a governor of the

bank of England back when I was a Trader

um and Mark Cary had this very piffy way

of describing the British economy and

the British economic problem and I've

got the exact quote here what he said

was it's just not that productive an

economy anymore this is Mark Carney

former head of the bank of England the

problem with Britain is that is just not

that productive an economy and we hear

these kinds of arguments all the time on

the news um from the conservative party

sometimes even from the labor party the

problem with Britain is we're just not

productive enough we as Britain is a

fundamental problem we we productivity

is lacking we're sort of fundamentally

weak we need to fix productivity and I

have a problem with this way of

describing the economy and first of all

I'm not against productivity I'm not

against economic growth I think these

things are all good things

if fundamentally the biggest problem was

a lack of UK

productivity number one what we'd be

seeing is living standards falling

specifically in the UK and I think a lot

of people who who live in the UK feel

that what we have is a specific UK

problem it's very important to recognize

living standards are falling for middle

classes all across the world all across

the world so this YouTube channel is

watched all across the world we've got a

lot of viewers in America in Australia

and places like Germany the Netherlands

we get messages all the time saying

living standards are collapsing here in

the US in Germany it's definitely

happening places like Italy and Spain

even a country like Australia which is

generally considered to have strong

living standards a good place to live

living standards are falling there so if

the problem was specifically UK

productivity and I'm not saying we don't

have a problem with productivity if that

was the main problem why are living

stands collapsing all across the world

the second thing is to say

if the problem was a lack of growth in

productivity and I'm not saying we don't

have a lack of growth in productivity

why are living standards falling so in

The Last 5 Years specifically we have

seen really a collapse in the living

standards of the average British family

this has happened at the same time as

the enormous growth inequality we we've

reached a situation now when you know

about half of the families in the

country struggle to simultaneously feed

their kids and turn the heating on in

the

winter and this has not coincided with a

collapse in in British productivity yeah

we can argue there's stagnation in

British

productivity but productivity is not

collapsing and yet living standards are

collapsing so again we have a second

disconnect here but the third thing and

I think the most important disconnect is

if the fundamental problem in the

British economy or even the global

economy is a lack of

productivity

why is wealth of the richest people in

the country the richest people in the

world Millionaires and billionaires why

are these people's wealth exploding

through the ceiling so I'm sitting here

now we're filming this at the beginning

of April in the last couple of weeks we

have seen almost every single stock

market in the entire world hit a new

record alltime

high does that sound like a world which

has a problem of fundamental

productivity growth so we

saw another piece of news that came out

yesterday was that the world gained 141

new billionaires last year in an amazing

year for rich

people I always remember in the middle

of the the depth of the cost of living

crisis the financial times had an

article and the headline was will the

Boom in luxury goods ever stop that was

the that was the article you know we saw

in the first year of covid the largest

and fastest ever increasing

wealth of the richest people in the

country we saw the average US billion

iire double their wealth in a single

year the average UK billionaire made 630

million in a single

year does this sound to you like a

country and a world where the

fundamental problem is is productivity

growth and I'll say I'll keep saying I'm

not against productivity grow

productivity is great if you live in a a

country and a world where living

standards of ordinary people are

collapsing and living standards of the

richest are exploding through the room

stock markets are exploding to new

alltime highs the gold price hit a

massive new alltime high

yesterday do you really think the

problem is productivity growth do you

not think there might be a deeper

problem with inequality so I think we

need to look a little bit closer at who

this guy Mark car is right so Mark car

as I've said was former head of the bank

of England he's actually a Canadian he's

not British before that he was head of

the Bank of Canada and before that he

was a very well-paid Banker of a golden

sack so what you have here is a very

wealthy man

who has been very well paid throughout

his career I'm sure him and his family

are all very rich they are part of a

class of very wealthy people who are

getting rich up very rapidly whose

living standards are increasing very

rapidly turning around to you and saying

the problem is productivity you guys are

just not productive enough and I

think what we have here is one single

example of a much broader problem which

is that economists and politicians who

very often are very

rich live in an economy which is seeing

lifesty of the very rich get

fantastically better seeing the wealth

of the very rich explode very quickly

while your living standards

collapse turning around to you and

saying the problem is your

productivity um and let's unwrap unwrap

a little bit what productivity is

because I think productivity sounds like

a very moralistic term productivity is

basically GDP per worker or sometimes

it's GDP per hour worked so essentially

unless you know people are working

rapidly more hours which in the UK they

are essentially it comes down to GDP

growth and these guys are basically

saying the reason you're poor is because

GDP growth is is not high enough and um

first to say GDP is not is not falling

GDP of the UK now is higher than it was

before covid GDP of of almost every

Western country is higher now than it

was before covid GDP is enormously

higher than it was 30 40 5050 years ago

when people like my dad possibly your

dad were able to work regular jobs and

buy houses um GDP goes up and up and up

and up and up the wealth of the richest

goes up and up and up living stands for

the rich go up and up and up Ordinary

People are are really getting poor very

rapidly and wealthy men like Mark Carney

turn around and say it's because your

your productivity is not good enough and

we had an we had a very similar example

where Andrew Bailey who is the current

governor of the bank of England said

that inflation is is your fault for

asking for high wages and Andrew Bailey

has paid half a million pounds a year um

we have an increasing problem of

economists trying to tell

you that it's your fault and in many

cases even saying it's not happening

there was a conservative politician on

TV just last week saying that living s

is better than than they've ever

been it's very very important that that

people like you understand inequality is

growing and inequality is growing very

quickly and when inequality grows

quickly living standards for the rich

increase and living standards for for

the poor fall economists have a

fundamental blind spot about inequality

what they are obsessed about is growth

and they will always be obsessed about

growth and they will always tell you

that growth is the problem and lack of

productivity is the problem in my

opinion and I've got lots of videos

where hope I'll convince you we have a

fundamental problem of growing

inequality and what I see is a sick

economy which has a growing cancer of

inequality going to the doctor and the

doctor is saying listen don't worry

about your cancer grow your way out of

it listen we grow year after year and

living standards fa and it's not going

to work and growth is great but I think

it it has become basically a mantra

basically a prayer of our intellectual

classes which is don't worry about

anything else just grow just grow and I

think it it's basically reached the

point where growth has become

essentially a code word from the very

rich which

is I'm an idiot I don't understand this

problem I have no real solutions but

just

grow with with no plan we're in this

absolutely absurd situation in this

country where we have a conservative

government whose plan is just grow

whilst absolutely starving people and

government of the funds they need to

provide any sort of growth we have a

labor government that are going to come

in and their plan is we're going to grow

the economy without doing any investment

and without put any money in your

pockets I think growth has

become such a meaningless word that it's

just something economists and

politicians scream about with no real

plan and

um I would like you to turn around to

these economists and these politicians

and ask them with what money what money

do want us to grow with if we have no

money to go out to our shops to our high

streets and to

spend then where is the economic growth

going to come from um and if the problem

is a lack of growth then why do the

wealth of the richest people in our

country and the richest people of the

world keep growing more and more um

so I would like to leave you with a

message that growth in our Modern Age as

much as it would be wonderful has become

basically a signal of stupidity people

with no plans people with no

understanding

of the problem of growing

inequality are insisting that the

problem is is our lack of economic

growth um we won't go anywhere good when

all the money goes to the rich and

nothing goes to anybody else um people

like Mark Carney people like Andrew

Bailey people like our our very wealthy

politicians they're not going to do

anything about it it has to be you it

has to be me we have to scream at these

politicians and say the problem is not

economic growth the problem is growth of

inequality of wealth if you don't fix it

our living stands will collapse so I'll

keep making videos about it if you keep

talking about it it's not growth it's

not Mark Carney it's inequality stupid

we have to fix it thank you