Why do we need growth?

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Let me try to explain what I mean. Most of us know the basics if economic growth (or lack of), rising prices, the risk of inflation and so on.

Why do we need all this? Note, I don't mean why do we have growth, I mean why do we need it? Let me take the example of a loaf of bread. The wholesaler (to the bakery) needs to charge £x to make a profit. The bakery needs to charge £y to the customer to make a profit. The customer needs to earn £z (in terms of what they spend on bread) to ensure they're not out of pocket. So, at a given point in time, all parts of the chain are making profit and the customer can purchase within their means.

Why then, at some point, does the wholesaler need to increase prices, thus meaning the bakery has to do likewise and the customer ends up out of pocket in terms of their bread spend?

I'm maybe not explaining it very well, and I appreciate their are many layers to all this. However my underlying point is it often seems to be growth and price increases (coupled to wages not keeping up) that seems to create many of the issues the masses then experience. Why therefore, can prices throughout the supply chains of the world not remain constant, with everyone making a degree of profit and the customer with wages to live at least semi-comfortably.

I suspect world economics, like other things we've discussed on here, is intentionally overly complex to ensure the rich remain rich and the poor remain poor, with those of us in the middle struggling to varying degrees.
 
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Oh F*** off. I want a bigger telly and a bigger car and you have to make it so I can have them. The frogs and the krauts and the yanks have got posh stuff so why shouldn't I?

Somebody needs to give them to me.


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Well, historically, it's growth that makes it happen.
 
Wholesalers buys wheat which is set by international markets, same as copper etc, then energy costs, transport
 
The farmers crops have a poor year, demand is high for the limited stock. The people buying the crop (say wheat for bread) have paid more for the same amount of ingredient, so they put the price up, and the rest of the circle follows.

A very simplistic answer, and I understand your meaning overall
 
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Thanks all, yeah if I'm being honest I kind of get why it 'is' the way it is, however the moralist in me thinks surely there must be a better way of going about things to avoid this cyclical boom and bust.
 
Thanks all, yeah if I'm being honest I kind of get why it 'is' the way it is, however the moralist in me thinks surely there must be a better way of going about things to avoid this cyclical boom and bust.
Sure. The way "undeveloped" societies all over the world got along for hundreds, or thousands of years, as long as they had more or less stable population.
Social evolution (survival of the meanest barstard) has changed the species to one which can't be doin with stability unless it's the one you cite - the rich remain rich and the poor remain poor.

Where Growth has really made a difference if you look back since WW2, say, is in the middle. The people who are managing fairly well, do a lot better and have genuinely better lives. SAw a good article - I'll see if I can find it.
 
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