SECURITY VS. GROWTH:

The Church of GDP (Robert J. Samuelson, January 12, 2006, Washington Post)
[Benjamin] Friedman, a Harvard economist, has written a hugely provocative book ("The Moral Consequences of Economic Growth") arguing that rapid growth is morally uplifting. "Economic growth -- meaning a rising standard of living for the clear majority of citizens -- more often than not fosters greater opportunity, tolerance of diversity, social mobility, commitment to fairness, and dedication to democracy," he writes. Further, the opposite is true. Poor growth feeds prejudice, class conflict and antidemocratic tendencies. [...]

Friedman has identified a tendency, not an iron law. Still, his moral case for economic growth is solid. It's true that growth alone rarely creates happiness. Beyond a certain income, happiness depends on family relationships, a sense of belonging, personal beliefs. But growth surely can cure misery. In the 1700s, life expectancy in France was 25 years, and about 30 percent of infants died before their first birthday. Now life expectancy in advanced countries is almost 80 years, and infant mortality is usually less than 1 percent. Anyone who cares about world poverty must favor economic growth.

Another moral plus: Societies whose politics focus on the gaining and sharing of prosperity can promote their own stability. First, everyone can win. Second, though remaining economic conflicts can be nasty, they're easier to mediate than religious or ethnic differences -- where one side must face eternal damnation or discrimination. It's no accident that the United States and Britain are the oldest successful democracies.

But Friedman mostly misses the real growth predicament facing most advanced societies. It's not environmental spoilage. As he notes, most rich societies protect their environments through tougher antipollution regulations. In the past two decades, U.S. emissions of sulfur dioxide are down 54 percent, he reports. Whether global warming will break this environmental truce remains to be seen.

The immediate dilemma involves the welfare state. It requires fast economic growth to generate the income and government revenue to pay all the promised benefits. But the mounting costs of those benefits -- especially as populations age in the United States, Europe and Japan -- may stifle growth through higher taxes and budget deficits. If so, the welfare state may cause the stagnation and strains against which Friedman warns. The dilemma for most rich societies is that they are wedded both to advancing materialism and to policies threatening that advance.
Mr. Samuelson usually does better than this--it is precisely those welfare state programs that were adopted as a function of insecurity that threaten morality, living standards, and, ulimately, the very nations that remain wedded to them.