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by Neville Kennard, veteran preaching and practising capitalist

We hear much these days about the “need for economic growth,” especially from politicians who often don’t know much about business, or about proper economics, and they don’t know much about prosperity either.

They want growth for the sake of growth, but I am not sure why. They love the economic growth buzzword. Perhaps it is because economic growth papers over the cracks and flaws and blemishes in the system. For a politician, a government — The State — economic growth means more taxes and more spending — the stuff they love. They blindly and positively want economic growth.

While the Greens blindly, negatively, want no growth. They don’t even like prosperity.

Businesses too — mostly — want to grow. There seems to be an unquestioned growth imperative.

But what about “prosperity”? What if “growth” may actually at times reduce “prosperity”?

An individual, for example, may want to “grow” financially with more assets, but if this requires lots of borrowing it may actually come at the expense of prosperity. He may buy an investment property, borrowing to do so, and be financially stressed for years; he may actually be less prosperous. In the long run the investment property may increase in value, produce good income and relieve the stress. It may be a good idea, but such an investment should be made not out of some growth imperative, but out of a hard-nosed financial assessment. It should have the prospect to lead to real prosperity.

A business, too, a small company or a big corporation, needs to watch that it is not driven by the growth imperative that actually reduces the prosperity of its owners and investors. Accumulating capital, rather than growing with borrowings, may bring greater prosperity, albeit at the expense of growth.

But when it comes to governments, to The State, they seem to be driven by the propensity and encouragement of their constituents to spend. Politicians want spending, and borrowing, even though it may reduce the comfort and real prosperity of the wage-earners and businesses in their Nation State.

It is prosperity that is important. Lower growth, no growth even, may bring more prosperity than a strained growth. If an individual pays off his house, reduces his debt, lives more frugally, he may become more prosperous.

The western world has been through a period of extraordinary growth over several decades and we may all be somewhat addicted to the feel-good of such apparent prosperity. For many, now, this period is at an end for some time as the borrowings get repaid, the malinvestments corrected, the spend-thrift habits changed. It is time now to become prosperous. Growth can wait.

While politicians and their big government departments want “growth” and exhort us to spend, if we each become prosperous instead, accumulate capital, concentrate on quality of life and have the choices that prosperity brings, we may be less fooled by their promises.

Economic growth can be good and bring benefits to many, but not if it is an artificial growth, growth for growth’s sake, rather than founded on sound underlying prosperity.

Prosperity first, growth second.

The next several years will bring, I believe, a correction of malinvestment in “growth” and a return, eventually, to real prosperity.

Relax, kick back, economise, save, invest and become properly prosperous.

(in order of appearance on Economics.org.au)
  1. Welcome from Neville Kennard
  2. Think Tanks Don't Work
  3. "Market Failure": Just what the government ordered!
  4. The Tragedy of the Tax Pool Commons
  5. Corporate Welfare
  6. Citizenship for Sale?
  7. I Don't Vote
  8. Voting: Right or Privilege?
  9. Stockholm Syndrome and our Love-Hate Relationship with Government
  10. Civil Disobedience: The Rules of Engagement
  11. Should Respect for Law Extend to Bad Laws?
  12. Jaywalking as a Demonstration of Individuality
  13. Government Likes War
  14. Collusion is Our Right
  15. Why Not the Drug Olympics?
  16. Unconventional Wisdom
  17. Tiger Farming: An Alternative to Extinction
  18. Looking Backwards: Mont Pelerin Society Conference, Sydney, 2010
  19. Tax Avoidance is a Patriotic Duty
  20. Kennard Writes to IPA Review Editor
  21. Genocide by Welfare: A Tragedy from the Aboriginal Welfare Industry
  22. Separating Sport and State
  23. Your Home is Not an Investment
  24. Dick Smith, Celebrity Philanthropist
  25. A Libertarian's New Year's Resolution
  26. Extend Politicians' Holidays to Create Prosperity
  27. Entrepreneurs are Disruptive, and Bureaucrats Hate It
  28. What is a good Australian?
  29. Governments Like Employment But Hate Employers
  30. The Market Failure Industry
  31. Neville Kennard: The Tax Avoidance Imperative
  32. Wot if ...?
  33. The Tribal Chief and the Witch Doctor
  34. The Tannehills
  35. Democracy versus Property Rights and Prosperity
  36. Government Doesn't Work, and That's the Way They Like It
  37. Minarchy vs Anarchy
  38. Euthanasia and Self-Ownership
  39. The Right Policies to Fix a Depression
  40. Is Howard Our Best PM?
  41. Tax Producers vs Tax Consumers
  42. Where There's a Queue, There's a Business Opportunity
  43. Authoritarian Freedom
  44. Why Classical Liberals Should Debate Anarchocapitalists
  45. The Tyranny of the Majority
  46. If you could choose to whom you paid your tax
  47. Business Should Exploit Boat People
  48. The Immorality of Trade Unions
  49. "America" vs "The United States"
  50. Sweet Anarchy
  51. The Illusion of "Job Creation"
  52. Gold Is Money
  53. Guilty Capitalists
  54. Bureauphobia
  55. Prosperity vs Growth
  56. Capitalism vs Democracy
  57. More people = More fun
  58. Self-Ownership - the very idea!
  59. Government will murder Neville Kennard if he doesn't back away
  60. The Australian Dollar Has Been Cowardly and Criminally Devalued, Harming the Poor Particularly
  61. Is Taxation Theft and Government a Tax Cheat?
  62. My Journey to Anarchy:
    From political and economic agnostic to anarchocapitalist
  63. Government Needs Bad Guys –
    that's why they like wars
  64. What Is Obscene?
  65. Traffic Economics
  66. Wayne Swan stands on the shoulders of other intellectual pygmies
  67. Neville Kennard Obituary
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