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The “pro-growth” progressive

The self-proclaimed progressive economist, now Australian Labor MP Andrew Leigh has written an article that strongly outlines the benefits of economic growth.

Leigh argues that economic growth has led to higher living standards, and need not lead to increased environmental degradation:

The view that our economy will eventually use up all the stuff in the world is based on a static view about where our GDP comes from. If it were the case that all workers produced goods requiring non-renewables and if we never became any more efficient at producing those goods, then rising incomes and population would eventually use up all the world’s resources. But it turns out that neither of these things [is] true. Most workers don’t produce goods from non-renewables. In fact, three-quarters of Australians work in the service sector. For detectives and doctors, barristers and baristas, the product of their jobs doesn’t weigh much, leading some to dub the phenomenon ‘the weightless world’ of work.

Leigh also points out that the key to boosting growth is to raise productivity – that is, how well a country uses its labour and capital.

Today, the best way for a country’s to boost its productivity, in Leigh’s opinion, is to improve its education system. In particular, he suggests that countries need to increase the number of years that people spend in education so that they have the kinds of skills required to adapt to the needs of the rapidly changing labour markets of our modern economies.

When children are at school, he recommends two particular policies which are beginning to attract more debate on this side of the ditch: collecting and publishing data on the value which schools add to their pupil’s learning over time; and a salary structure that incentivises and rewards high-performing teachers.

You can read Andrew Leigh’s full article here.

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