“Our problem is not lack of growth but too much of it,” Sedláček said. An economy that uses debt to grow must continue to do so by taking on more and more debt or, alternatively, face a slowdown that will lead to bankruptcy. It is like owning a car that explodes when it stops, argued Sedláček." (Source: CFA Institute)
Brilliant presentation at the Fifth Annual European Investment Conference in Prague by Czech economist Tomáš Sedláček, who was an advisor to Vaclav Havel in the past.
The full presentation which question our political obsession with economic growth is available in livestream via the Conference website.
Sedláček’s speech at the European Investment Conference is not the only sign that some of the more daring economists are waking up to the reality of a post-growth society.
Last week, the Financial Times (the Church of Economic Growth?) published an interesting article by Satyajit Das addressing the same issue. Referring to the movie “A Few Good Men”, Das says that our “politicians and policy makers seem unable to handle the truth – the prospect of little or no economic growth for a prolonged period.”
Analysing how the financialisation of the economy used debt to create demand and growth, Das claims that “expansionary fiscal and monetary policies may only provide termporary palliative relief, but cannot restore the health of the real economy”.
His conclusion is so on the money: “A return to strong growth remains an article of political and economic belief. But as philosopher Michel de Montaigne asked: “How many things we regarded yesterday as articles of faith that seem to us only fables today?”