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| Version 0 | Version 1 |
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| Why are we obsessed by growth? | Why are we obsessed by growth? |
| (about 7 hours later) | |
| By Anthony Reuben Business reporter, BBC News | By Anthony Reuben Business reporter, BBC News |
| Wednesday's gross domestic product (GDP) figures will be unveiled amid great excitement, befitting one of the year's most eagerly anticipated numbers. | Wednesday's gross domestic product (GDP) figures will be unveiled amid great excitement, befitting one of the year's most eagerly anticipated numbers. |
| They are expected to show that the UK economy contracted slightly between April and June, meaning the economy remained in recession. | They are expected to show that the UK economy contracted slightly between April and June, meaning the economy remained in recession. |
| GDP is a measure of the total value of all the goods and services produced by an economy. | GDP is a measure of the total value of all the goods and services produced by an economy. |
| For all the fanfare we have seen in the past couple of years with small rises and small falls in growth, the economy has basically been stagnant over that period. | For all the fanfare we have seen in the past couple of years with small rises and small falls in growth, the economy has basically been stagnant over that period. |
| Why is that a problem? | Why is that a problem? |
| "In the long term, we grow because technology gets better and we get better at producing things," says Jonathan Portes, director of the National Institute of Economic and Social Research. | "In the long term, we grow because technology gets better and we get better at producing things," says Jonathan Portes, director of the National Institute of Economic and Social Research. |
| "In the short term, growth is an indication that the economy is producing as much as it could be and resources are not being needlessly wasted. | |
| "At the moment we are producing considerably less than we could be because the economy is being mismanaged." | "At the moment we are producing considerably less than we could be because the economy is being mismanaged." |
| Creating jobs | Creating jobs |
| One of the resources not being used as much as it could be is labour. | One of the resources not being used as much as it could be is labour. |
| "If the economy is growing at less than about 2% a year then unemployment rises because output is just not rising fast enough," says Prof John Van Reenen from the London School of Economics. | "If the economy is growing at less than about 2% a year then unemployment rises because output is just not rising fast enough," says Prof John Van Reenen from the London School of Economics. |
| "With a growing population and rising wages, the economy has to grow to create jobs." | "With a growing population and rising wages, the economy has to grow to create jobs." |
| Having more people out of work increases the amount that the government has to pay in benefits and also reduces the amount it receives in taxes. | Having more people out of work increases the amount that the government has to pay in benefits and also reduces the amount it receives in taxes. |
| That is a particular problem at the moment, given the debt problems currently facing the government. | That is a particular problem at the moment, given the debt problems currently facing the government. |
| "Debt matters because it has to be paid," Jonathan Portes says. | "Debt matters because it has to be paid," Jonathan Portes says. |
| "Growth would make it significantly easier to deal with. If we are growing slowly it gets worse and worse." | "Growth would make it significantly easier to deal with. If we are growing slowly it gets worse and worse." |
| A classic example of what happens when there is no growth is Japan, which has had almost no real growth for the past 20 years. | A classic example of what happens when there is no growth is Japan, which has had almost no real growth for the past 20 years. |
| "Japan has stagnated, although it is not a broken society," says Jonathan Portes. | "Japan has stagnated, although it is not a broken society," says Jonathan Portes. |
| "But low growth has been bad for young people who cannot find decent jobs." | "But low growth has been bad for young people who cannot find decent jobs." |
| Low growth has also meant that its government debt as a proportion of GDP, which is a key measure, has spiralled. | Low growth has also meant that its government debt as a proportion of GDP, which is a key measure, has spiralled. |
| It currently has a debt-to-GDP ratio of over 200%, which is the highest in the developed world. | It currently has a debt-to-GDP ratio of over 200%, which is the highest in the developed world. |
| 'More and more junk' | 'More and more junk' |
| But some people think that a zero growth economy could be a good thing. | But some people think that a zero growth economy could be a good thing. |
| Brian Czech, president of the Center for the Advancement of the Steady State Economy (Casse) says that the UK economy has already grown beyond its optimum size. | Brian Czech, president of the Center for the Advancement of the Steady State Economy (Casse) says that the UK economy has already grown beyond its optimum size. |
| "There are too many problems caused by increasing production and consumption of goods and services," he says. | "There are too many problems caused by increasing production and consumption of goods and services," he says. |
| Casse argues that growing the economy further creates social and environmental problems that outweigh its benefits. | Casse argues that growing the economy further creates social and environmental problems that outweigh its benefits. |
| "Lots of sacrifices come with growing GDP, such as working too long hours, the depersonalising of workplaces and spending on advertising to persuade people to buy more and more junk they don't need," Mr Czech says. | "Lots of sacrifices come with growing GDP, such as working too long hours, the depersonalising of workplaces and spending on advertising to persuade people to buy more and more junk they don't need," Mr Czech says. |
| Casse's position is certainly not a mainstream economic view, although there are strong arguments that GDP by itself is not enough to measure the state of a country or an economy. | Casse's position is certainly not a mainstream economic view, although there are strong arguments that GDP by itself is not enough to measure the state of a country or an economy. |
| On Tuesday, the Office for National Statistics released its latest findings in its measurements of national wellbeing. | On Tuesday, the Office for National Statistics released its latest findings in its measurements of national wellbeing. |
| Also, inequality in the UK economy means that growth would not necessarily benefit everyone. | Also, inequality in the UK economy means that growth would not necessarily benefit everyone. |
| But for the moment, GDP growth will remain the focus for analysts and news organisations alike every three months. | But for the moment, GDP growth will remain the focus for analysts and news organisations alike every three months. |
| "GDP is not perfect and it ignores intangibles such as happiness and the environment, but it is still the best measure of all we produce," says Jonathan Portes. | "GDP is not perfect and it ignores intangibles such as happiness and the environment, but it is still the best measure of all we produce," says Jonathan Portes. |
| John Van Reenen adds: "When GDP grows, the size of the economic pie grows." | John Van Reenen adds: "When GDP grows, the size of the economic pie grows." |
| "That allows you to slice the pie to get what you want, be it higher wages, more leisure time or increased government spending." | "That allows you to slice the pie to get what you want, be it higher wages, more leisure time or increased government spending." |