Economic Growth: How Much and ‘How To’

Abstract

John Stuart Mill (1806–1873) learned Greek at age three. He was very bright and his father was very demanding. Years later in his Principles of Political Economy, J. S. Mill predicted that economic growth in Britain would cease in a few years as population growth choked off increases in per capita income. In his second edition he put a new later date for growth to cease since his earlier assertion turned out to be wrong. And in his third edition he pushed the onset of misery further out again. The nineteenth century was one of great economic expansion but it seemed to Mill and presumably others to be a one-time thing. Today the absence of economic growth is deemed to be symptomatic of an economic pathology. Non-growing economies need a medication or possibly surgery. With the spread and standardization of national accounting procedures economic growth has become a competitive ‘sport’ with annual winners and also-rans among developed nations. It was in the 1930s that national accounting became a serious enterprise and after 1945 all developed countries had their own central bureaus of statistics. Before then national growth was measured on an ad hoc basis, as in tons of coal mined each year, tons of steel produced, yards of cloth milled, amount of electricity produced, etc. J. S. Mill was not the only intelligent observer to presume that economic expansion was a once-over event. W. Stanley Jevons (1835–1882) wrote a book on ‘tiie coal question’ in 1865 predicting the choking off of economic expansion in Britain as the reserves of coal were exhausted.