Why do economies have to keep growing?

Question

What's wrong with staying even, if things are going well and there is enough prosperity?
I don't understand much about economic theory and geniunely want to know.

Answer 1

There is never "enough prosperity", human wants are limitless and people will always want MORE prosperity than they have. Until we come to live in a much higher age where people look less to material things for their happiness.

Looking back, we lived in a world of very little economic growth in the Middle Ages. The rich stayed rich except for losing out when another country's rich won their wars. The poor stayed poor and served the masters who won the wars over their heads. Since the Agricultural Revolution (c1650-1750) and then the Industrial |Revolution, we have moved into a world where the general level of economic welfare is steadily growing. People are materially much better off in most countries than 100 or 200 years ago: less drudgery, less backbreaking work, better health, longer lives, fewer child deaths and so on. More leisure too in Europe. More time for fun and relaxing activities like playing ballgames or dancing or skiing.

Never mind econ theory if you're not an economist. The key point is that growth happens because of technological progress, and therefore we have an economy that works around growth. In the Middle Ages there was very little growth and they had an economy that worked with stability. The cause and effect is that way round -- twchnical progress creates growth which creates a growth economy.

Answer 2

Let me describe the state in which everything suddenly became static, except population.

At best, everyone would stay even but no one, on average, could ever be better off than they are now. If you are desperately poor in a poor nation, you could not get free of that because the global economy had frozen. Further, although we would be producing x goods, we would have a greater population to divide them among. In addition, the economy must collapse because in the absence of change, the current stock of natural resource will run out. Everything must fail in stasis. You will have mass starvation at best, should the world stand still. Improvement can only occur in the growth state or there is no incentive to improve.

Answer 3

Economic growth is vital to support an ever growing population. This is particularly important in third world countries where economies can not support the majority.

Energy crisis is another important reason why economies need to grow. Because of increasing demand for oil and its limited supply, oil products are becoming more and more expensive. To maintain a steady supply of oil/fuel, more expenses have to be allocated.

Prices of other products are steadily increasing as prices for oil steadily increases. This means that to maintain the supply of these needed products, more expenses have to allocated.

Economic growth is needed to maintain status quo.

Answer 4

The only thing that is constant is change...