Better is Better than More: Investigations into Qualitative Growth
Please cite the paper as:
Michael Benedikt and Michael Oden, (2012), Better is Better than More: Investigations into Qualitative Growth, World Economics Association (WEA) Conferences, No. 2 2012, Sustainability – Missing Points in the Development Dialogue, 24th September to 21st October, 2012
This paper attempts to offer new insights into the concept of qualitative growth. We argue that quality is more than an outlying variable addressed by adding a term (or two) to the utility function and question whether quality is adequately addressed by specialized studies in product differentiation, point-of-sale information asymmetries, consumer preference, and technological innovation. Our core hypothesis is that a general increase in the quality of goods and services produced by a country is not only more sustainable than, but can in large measure substitute for, a general increase in the quantity of goods produced—which is a popular understanding of “economic growth”. In the work of Herman Daly and other ecological economists, qualitative growth, is defined only generally as an increase in the value of the economic goods and services produced by a given, and government controlled, amount of throughput. But we get little specific idea about what qualitative growth would actually look like, be like, or feel like—little insight about quality per se. We propose alternative ways to promote an economy-wide shift from quantitative to qualitative growth, but also to limn what “quality” consists in at a usefully abstract level. We suggest, finally, a strategy that looks to modest regulatory interventions together with early education in quality discrimination, improved information about quality in the marketplace, and more effective persuasion as to the economic—indeed quantitative economic—benefits of quality growth (“quantitative” inasmuch as ordinary wealth, profits, and wages would grow in a qualitative growth regime). To achieve a turn to qualitative growth with a lighter regulatory hand, we look to insights from the new behavioral economics that suggest that substantial changes in economic behavior can be effected by changes in the “architecture of choice” rather than by limiting or excluding choices.