July 2021

In a previous post I explained how most people in the rich world are wedded to beliefs that are wrong, or mostly wrong. I looked at why the push for economic growth is not always good, and explained why democracy is not the best way to govern societies when they face very large, complex and life-threatening dangers, like climate change.

This time, I’ll look at two other beliefs which are wrong, or mostly wrong.

2 – Economic growth creates jobs

Many modern economic beliefs have been deliberately designed to give the opposite impression of what’s true. The idea that wealth trickles down, that growth is always good and that free trade boosts well-being for the majority, are only a few examples of modern economic ideas which are wrong, or mostly wrong, and which were designed to make people embrace beliefs which are not true.

Another is the idea that growth creates jobs.

This seems simple enough. When there is economic growth, some people get rich. They then invest their money in businesses. This allows the businesses to expand and this creates jobs.

This is what most people think, and it’s what our politicians tell us.

But there are two problems. First, it doesn’t fit the facts. Second, the push for economic growth frequently destroys jobs in mature economies, rather than creating them.

In the 25 years between 1990 and 2015, the billion people in the rich world enjoyed some of the fastest economic growth in human history. Output grew by almost 150%. At the same time though, unemployment went UP.


Because, over the long term, when an economy is mature and the population is stable, growth mostly comes from rising productivity. It comes from businesses striving to produce MORE WITH LESS.

The growth comes from businesses getting rid of workers – and replacing them with machines.

Strange as it might seem, economic growth in the rich world is frequently the result of businesses cutting jobs, not creating them.

5 – Environmental limits, if they exist at all, are far away

While the majority of people in the rich world would probably like to live more sustainably, few seem to understand the scale or urgency of the transition that’s needed if the world is to avoid a climate catastrophe. And, in most of the rest of the world, the vast majority don’t seem to understand the need for radical change very much at all.

This lack of understanding is greatly because most people don’t understand exponential growth.

One of my wife’s students recently told her that she didn’t “believe” in exponential growth, which was quite funny. The student “believed” that economic growth was always good, which is wrong, but she didn’t “believe” in exponential growth, which is a cast-iron mathematical truth.

Maybe she felt happier that way.

Going faster and faster and faster

Anyway, without going into the mathematics, what’s really important about exponential growth is that it explains how a deteriorating situation can suddenly get completely out of control.

If people understood this simple mathematical function, they wouldn’t talk about starting to cut emissions in 2030 or make pointless promises to achieve net-zero by 2050. If they understood exponential growth they would know that these targets are a waste of time. It’ll be too late by then.

It’s because of this lack of understanding that so many people believe climate change is something societies can manage, and they say things like “we need to be become more resilient and adapt to rising temperatures”.

Just like a sudden surge of covid infections, change sometimes happens so quickly it is completely overwhelming. Because the rate of warming is accelerating, this is what’ll happen with climate change if societies fail to act. Look at the heat-waves in the US, Russia and the Middle East, and at how many climate records are being broken. Look at how droughts are becoming more prolonged. Look at how quickly the permafrost and glaciers are melting – much faster than scientists predicted.

Exponential growth explains how what looks like a manageable problem today will get completely out of control without change. What is an inconvenience will suddenly become a very big danger, then something to fear.

But too many people still believe that this won’t happen, because no one has taught them some not-very-complicated mathematics.

At least we can be sure of one thing. They’ll understand it soon.

© Graeme Maxton 2021

Image edited from Christine Sponchia Pixabay