An alternative to economic growth?

A question from Yahoo! Answers:

What’s a viable alternative to economic growth?

If the rule of the free market is to charge whatever the market will bear, are we as consumers and workers not stupid to strain harder and work longer to be able to pay prices which will be jacked up due to the fact that we can spend more money through that?

And:

Would it therefore not be better to turn the tables and refuse to work longer and earn more, simply demand more time for ourselves, and thereby send prices and working times plummeting?

All we would need to do is sit it out until prices go down due to lack of demand. And yes, that might be called a recession, but where does the straining end? Humans need to sleep. And there are only 24 hours in a day. Eternal, exponential growth, I’ve always thought, is simply a mathematical impossibility – or not?

Wouldn’t it be wise of us to slow down before we crash? What are your views? Can this be done?

Unfortunately, there is no viable alternative to economic growth. Even today, there are still hundreds of millions, if not billions, of people who do not have access to safe drinking water, indoor plumbing, and sufficient nutrition. In other words, the world’s problem is not that it has too much income; indeed, it has too little…

This said, the question needs to be clarified. Are we talking about absolute growth or per-capita growth?

Absolute growth definitely has limits; at some point, the whole Earth will be covered with human housing and fields, if the population keeps increasing. The expectations of ever-increasing population, however, are not realistic; we see population growth slowing throughout the world as countries undergo demographic transition. Chances are, the world’s population will stabilize at 12-15 billion around 2100.

Per capita growth, however, is a completely different matter; it depends primarily on the amount of physical capital available to the average worker. Since physical capital tends to accumulate over time (not so much in quantity, but in quality; old machines are replaced with new, more productive ones), there is no reason to believe that per capita growth has any inherent limits…

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