Newsletter

December 29, 2014

 

The Dilemma of Economic Growth - Necessity vs. Feasibility Results of Survey on Economic Growth Released

Keywords: Newsletter Steady-State Economy 

JFS Newsletter No.148 (December 2014)


Image by geralt Some Rights Reserved.

Quite a few municipalities in Japan have developed and are using their own happiness or affluence indexes. Meanwhile, the 2014 grand prize for paperbacks went to a book entitled "Satoyama Capitalism." This book describes biomass power generation using local wood resources to meet local power demand, and highlights the non-monetary happiness and feeling of security brought about by being part of an independent economic subsystem re-constructed parallel to the mainstream, bottom- line capitalist money system. Several hundred thousand copies of the book have been sold, although the book states that an economy and society based on Satoyama capitalism may reduce GDP and the economic growth rate. This shows that many people are interested in more than just economic growth.

At the same time, political and economic news reports continue to cover economic growth strategies almost every day, confirming that it is a given fact that economic growth is indispensable to the government, business and industrial sectors. The government sets economic targets such as X percent of year-on-year growth every year, holding fast to its assumption that the economy must continue to grow.

Under these circumstances, what does the public think about economic growth? What image do they have of GDP growth as an indicator of economic scale? Is there any misfit between their thoughts or images and the facts?

Here we introduce the results of a survey on attitudes towards the economy conducted in October 2014 by the Institute for Studies in Happiness, Economy and Society, a JFS partner organization, supported by the Asahi Glass Foundation. The survey, conducted on October 25 and 26, 2014 by the Japanese online research company Macromill Inc., was completed by 500 citizens in their twenties through seventies registered with the company as monitors. The percentages of the sample population selected for the survey -- in terms of age, sex, and residence in metropolitan areas, mid-to-small size local cities, and rural areas -- were made proportionate to demographics identified by Japan's national census.

Here we introduce the results for three questions from this survey: "What do people think about economic growth?", "What do people think about the necessity and feasibility of continued GDP growth?" and "What do people think of the so-called 'myths' of economic growth?"

What do people think about economic growth?

To the question, "Do you think economic growth is desirable or undesirable?" more than 80% answered "desirable," or "rather desirable" while fewer than 10% answered "undesirable," or "rather undesirable," and about 8% answered "not sure."

What do people think about the necessity and feasibility of continued GDP growth?

The survey asked people whether they think continued GDP growth is necessary or not, in four different contexts; that is, "for Japanese society," "for the community you live in," "for Japanese businesses," and "for your own life." To all of these questions, about 80% of respondents replied that it was "necessary" or "somewhat necessary."

Specifically, the largest number of people (85.2%) said that continued GDP growth was necessary or somewhat necessary "for Japanese businesses." Those who said "for their own life" were the fewest (70.0%). It is interesting to note that the number of people who said "for Japanese businesses" was larger than those who said "for their own life." If there is a difference in people's perception of the need for economic growth between themselves as individuals and for businesses, what does it mean?

Next, the survey asked about the feasibility of continued GDP growth. In response to the question "Do you think that it will be possible for GDP to keep growing?" about 40% said "possible" or "somewhat possible." The percentage of those who replied "impossible" or "somewhat impossible" was also about 40%. About 17% said "not sure."

Thus, about 80% of people replied that continued GDP growth was "necessary" or "somewhat necessary." However, only about 40% thought that it was "possible" or "somewhat possible." These results are quite interesting as they show that there are people who think that continued GDP growth is necessary but impossible.

To be more specific about these conflicting sentiments, of the total of 500 respondents, 158 people replied that continued GDP growth is "necessary" or "somewhat necessary" but also replied that it is "impossible" or "somewhat impossible." In other words, nearly a third of respondents thought that continued GDP growth is necessary but not possible.

The survey asked people to give reasons for their answers in an open-ended question. "Declining population," "limits to the Earth," and "impacts of globalization" were the most common reasons given by respondents who thought that continued GDP growth is necessary but "impossible" or "somewhat impossible."

On the other hand, many of those who replied that continued GDP growth is "possible" or "somewhat possible" expressed their expectation for future policies, technologies and efforts by people.

What do people think of the so-called "myths of economic growth? "

People consider the "myths of economic growth" to be the assumptions that GDP or economic growth will solve various problems such as unemployment, insufficient wages, economic disparities, misfortune, and environmental problems. The survey also asked what people think about each of these problems.

Results showed that over 60% answered "Yes" or "Generally yes" to the questions "Do you think that unemployment will decrease as GDP grows?" and "Do you think that many people's wages will increase as GDP grows? " Thus, the majority thinks that "the jobless problem and wages will get better along with growth in GDP."

In contrast, only about 20% answered "yes" or "generally yes" to the questions "Do you think that economic disparities will decrease as GDP grows?" and "Do you think that environmental problems will improve as GDP grows?" That is, fewer people think that economic disparities and environmental problems will improve along with growth in GDP.

Concerning the question "will more people become happy as GDP grows," 42% answered "yes" or "generally yes," while 42.2% answered "no" or "generally no." Whether economic growth is associated with happiness or not is an interesting issue that divided people's opinion in half.

Statistics show that, in Japan over that last 30 to 40 years, GDP has grown while the overall unemployment rate, wage coefficient, Gini coefficient (a common measure of income disparity) and life satisfaction have all become worse. All of the "myths of economic growth" turned out to be just that - myths. While only a few people believe in the myth of economic growth concerning economic disparity, why do over half of people still believe the myths of economic growth concerning unemployment and wages? People feel differently about happiness, but what are the reasons for these differences?

We would like to pursue these issues and keep on looking at surveys about economic growth like this one.

Written by Junko Edahiro

Japanese  

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