Economic growth is an increase in the volume of production over a certain time period (year, quarter, month). This positive process also has negative consequences.
Essence and positive consequences of economic growth
Economic growth is a simplified economic indicator. It is understood as an increase in the real volume of production (not taking into account inflationary factors), less often - in the gross national product and national income. Economic growth is measured in terms of growth rates of real GDP per capita.
Distinguish between extensive and intensive economic growth. In the first case, it occurs without a change in the average labor productivity, in the second - with outstripping GDP growth for the number of people employed in production. The basis of the well-being of citizens is intensive growth. Indeed, thanks to it, social stratification and income differentiation between citizens are reduced.
Economic growth has a whole range of positive consequences for the country's population - it is an increase in the quality of medical care, access to education, improved working conditions, increased safety, etc. It also leads to an increase in the country's prestige in the international arena.
Meanwhile, there are opponents of economic growth, who point to negative phenomena associated with this process.
Negative effects of economic growth
The main criticism of economic growth boils down to the fact that it negatively affects the state of the environment and can lead to the collapse of natural resources. The so-called "Economic Growth Dilemma" is widely known. Its essence lies in the fact that, on the one hand, economic growth leads to the destruction of the environment, and on the other, without it, it is impossible to overcome poverty and ensure social stability.
The strategy to combat this phenomenon is to ensure sustainable development, which implies maintaining the current level of consumption and population size that the ecosystem can withstand. The policies of many countries today are aimed at solving current environmental problems. Among the measures are increased energy efficiency (thanks to, for example, LED lighting), the use of alternative energy sources, biofuels, etc. This makes it possible to somewhat level the impact of economic growth on the environment.
Also, critics of economic growth point out that it does not tackle the problems of poverty. Since the growth of production and consumption can only lead to the concentration of additional income in the hands of a limited group of people. This leads to even greater social stratification and an increase in social tension. Therefore, the level of poverty primarily depends on the existing system of income distribution in the country.
Economic growth can negatively affect the state of the labor market and lead to an increase in unemployment due to the automation of production processes.
Economic growth is closely related to the industrialization process. The latter implies mass production that is not creative. Another consequence is the problem of overpopulation in big cities.
