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Lumifer comments on Blind Spot: Malthusian Crunch - Less Wrong
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I've heard this phrase before. I see no reason to believe it's true. Japan has been at basically zero growth for more than 20 years by now and seems to be doing fine. Sure, it could be doing better but it's not like its system of economy collapsed.
Now, government social programs tend to be based on the hope of exponential growth, but that's a different problem altogether.
Politicians and other decision makers base their economic decisions on the assumption of growth. You are correct that continued exponential growth is not necessary for a healthy society. In fact we must eventually learn to live with zero or near-zero growth, so we had best start doing it now and adjusting our policies accordingly.