We need more economic growth according to the widespread belief. Do we really need to grow?
We have no choice. Whether we want economic growth or not, our capitalistic system needs growth to at least match interest repayments in order to remain stable. The associated regular interest income of the ‘net interest winners’ is not only responsible for the fact that the wealthy become ever wealthier but also for the constant pressure for economic growth that seems inevitable. When interest income is not completely and directly consumed but reinvested at interest (which is especially normal practice with great wealth), then the mighty dynamic of compound interest sets in along with a resulting “growth spiral”. With ever increasing wealth, the demand for interest and resulting profits also increases. In order to balance this, new value has to be created – in other words: growth.
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