In his FT column today, the ever-thoughtful Tim Harford has written about the dangers of moving into a zero-sum world, with the economy heading into a post-Brexit recesssion and in a political atmosphere which is already a game of grievances and blame. The column cites a wonderful book, Benjamin Friedman’s (2005) The Moral Consequences of Economic Growth. I’m biased, as Ben was my thesis adviser, but I do believe it to be a truly important book, especially for anyone also concerned about sustainability.
The book asks whether economists are right to care about economic growth, and finds the affirmative answer in political economy and the inter-relationship between growth and institutions. I wrote briefly about the book in 2012, worrying then about the rise of political extremism. Looking at the book again today, I am struck by its warning about the adverse consequences of withdrawing the state from social support, and its concern about the distribution of the benefits of economic growth. This now looks very prescient.
“Broadly distributed economic growth creates the private attitudes and public institutions that foster, not undermine, a society’s moral qualities,” Ben writes. “At the outset of the twenty first century, America’s problem is not unemployment. It is the slow pace of advance in the living standards or the majority of the nation’s citizens.” Rising living standards – for all – make societies more open and democratic. Unfortunately we in the UK seem likely to be testing what happens when living standards are falling, and the already-have-nots find they have even less.
The Moral Consequences of Economic Growth