Unlimited Wants and Economic Growth

Robert Frank has an excellent article in the New York Times titled The More We Make, the Better We Want. The article really explains the how our unlimited wants or our never-ending sense of not being satisfied acts as an engine of economic growth. This is a great article to have around to have students read and discuss. There are numerous directions to take this.

Should we be satisfied at some point? If so, where? How does standard of living figure into choices we make? Are my wants the same as yours, and subject to the same elasticities? Should they be?

As always, I'd be interested to hear your thoughts and suggestions.

Posted by TSchilling at September 29, 2006 7:44 PM


Comments
Economists Are destroying America. Economists, politicians, and executives from both parties have promised American families that “free” trade policies like NAFTA, CAFTA, and WTO/CHINA would accomplish three things:
• Increase wages
• Create trade surpluses (for the US)
• Reduce illegal immigration

Well, their trade policies have been in effect for about 15 years. Let’s review the results:
• Declining real wages for 80% of working Americans (while healthcare, education, and childcare costs skyrocket)
• A record-high 46 million Americans who don’t have health insurance (due in part to declining wages and benefits)
• Illegal immigration out of control
• Soaring trade deficits, much with countries that use slave and child labor
• Personal and national debt both out-of-control
• Global environments threatened by lax trade deal enforcement

Economists keep advocating policies that aren’t working. Upon seeing incontrovertible evidence of these negative trade agreement results, economists continue with Pollyannish blather. Some say, “Cheer up! GDP is up and the stock market’s doing fine.” Others say, “Be patient. Stay the course. Free trade will raise all ships.” Even those economists who acknowledge problems with trade agreements offer us only half-measures—adjusting exchange rates, improving safety nets, and providing better job retraining. None of these will close the wage gap in America—and economists know it.

Why aren’t American economists shouting from street corners? America needs trade deals that support American families and businesses in terms of wage, environmental, and intellectual property abuses. Why aren’t economists demanding renegotiation of our trade deals? There are three primary reasons:
• Economists are too beholden to corporations and special interests that provide them with research grants.
• Economists believe—but refuse to admit—that sacrificing the American middle class is necessary and appropriate to generate gains in third world economies.
• Economists refuse to admit they make mistakes.

Economic ambulance chasers: Now more than ever, Americans need their economists to speak truth and stand up to their big business clients. Instead, economists sound like lawyers caught chasing ambulances: they claim they’re “doing it for our benefit”.

Posted by: John Konop at November 8, 2006 3:58 PM