Why Growth Is Stupid
Summary
TLDRIn 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
- đ 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.
- đŹđ§ 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.
- đ The script points out that falling living standards are not just a UK issue but a global phenomenon affecting middle classes across various countries.
- đĄ 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.
- đ 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.
- đ The script criticizes the obsession with GDP growth, which continues to rise while ordinary people's living standards decline, indicating a flawed economic model.
- đ° 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.
- đŠ The speaker calls out economists and politicians, many of whom are wealthy themselves, for blaming the public for economic issues instead of addressing inequality.
- đ€ The term 'productivity' is scrutinized as a moralistic term that shifts the blame onto workers rather than examining the structures that create inequality.
- đ 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.
- đą 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
đ 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.
đ€ 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.
đ 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.
Mindmap
Keywords
đĄProductivity
đĄEconomic Growth
đĄWealth Inequality
đĄLiving Standards
đĄMark Carney
đĄGDP
đĄInequality
đĄMiddle Class
đĄElites
đĄInvestment
đĄCancer of Inequality
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
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