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🇫🇮 Finland /Economy & Trade

Does the welfare state need economic growth?

From Helsingin Sanomat · () Finnish

Translated from Finnish, summarized and contextualized by DistantNews.

At a glance

Opinion Sources not specified Context piece
  • The article discusses whether a welfare state requires economic growth, questioning the necessity of perpetual growth despite its known negative impacts.
  • It highlights economists' views that while GDP growth itself isn't the goal, its absence leads to severe problems like unemployment and declining living standards.
  • The author argues that focusing on growth is unsustainable in the Anthropocene era and suggests alternative funding models for the welfare state beyond traditional growth-dependent approaches.

The necessity of economic growth for the survival of the welfare state is questioned in this opinion piece, which challenges the assumption that perpetual growth is an unavoidable requirement. The author probes whether society is "doomed to perpetual growth" even when aware of its detrimental effects on nature and health.

Is it really true that we are doomed to perpetual growth, even though we know it is not desirable for nature and our health?

— Reader OpinionQuestioning the sustainability of economic growth.

Economists Mika Maliranta and Niku Määttänen are cited for their view that while GDP growth isn't an end in itself, its absence would render the situation "unbearable." They predict rising unemployment, shrinking living standards, exacerbated state financial problems, declining competitiveness, and crumbling social peace without it. The core argument presented is that the welfare state "crumbles without continuous economic growth."

Without growth, the situation becomes unbearable: unemployment grows, living standards shrink, state financial problems intensify, the country's competitiveness weakens, and social peace crumbles. The welfare state crumbles without continuous economic growth.

— Mika Maliranta and Niku Määttänen (as interpreted by the author)Describing the negative consequences of a lack of economic growth.

However, the piece pivots to question how society arrived at this dependency. Living in the Anthropocene, an era defined by human impact on the planet, the author posits that prioritizing economic growth to maintain state finances and well-being might be the "wrong path." The fundamental nature of welfare state services, which often rely on human presence and are difficult to automate without quality loss, is emphasized. This includes sectors like education, healthcare, and science.

Investing in economic growth to maintain the balance of state finances and well-being is probably not the right path in the new era.

— Reader OpinionArguing against prioritizing economic growth in the current environmental context.

If economic growth primarily boosts industrial and agricultural productivity while welfare services remain static, their relative prices will increase. This necessitates a larger share of national income for the public sector, either through higher taxes or increased corporate profit contributions. The author concludes that while capitalism and international competition create challenges, "we must not be discouraged" from finding solutions that decouple societal well-being from the imperative of GDP growth.

We know that capitalism, international competition, and people's status-seeking make it difficult to find solutions, but still, we must not be discouraged.

— Reader OpinionAcknowledging challenges while urging continued efforts to find alternative solutions.
DistantNews Editorial

Originally published by Helsingin Sanomat in Finnish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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