21 Aug 2016


In economics, a recession is a negative economic growth for two consecutive quarters. Anything less than annual three per cent growth in GDP, however, is traditionally also viewed with concern in our times. See for example US-has-record-10th-straight-year-without-3-growth-gdp.

But look how quickly the economy doubles in size with just three per cent growth a year. The Compound Interest Calculator at moneychimp.com says it takes just 24 years.

The world economy has indeed doubled in size since the 1980s (even taking into account the 2002 recession and the 2008 crash) and the accumulated wealth of that growth has almost entirely gone to the wealthiest, while living standards for most of the people in the post-industrial Western world have flatlined during that time.

Obviously it is unsustainable for the world economy to keep doubling in size every 24 years. The 'growthism' that is implicit in capitalist economics, is the reason why, as Naomi Klein says, it's Capitalism Vs The Climate.

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