Joseph Stiglitz on the criteria economic growth strategies should meet

This piece by Nobel laureate Joseph Stiglitz suggests the criteria by which we should measure the prospects of success, and the actual success, of an economic growth strategy, and it's not just steady increases in GDP.

There are, indeed, big differences in growth strategies, which make different outcomes highly likely. The first difference concerns how growth itself is conceived. Growth is not just a matter of increasing GDP. It must be sustainable: growth based on environmental degradation, a debt-financed consumption binge, or the exploitation of scarce natural resources, without reinvesting the proceeds, is not sustainable.

Growth also must be inclusive; at least a majority of citizens must benefit. Trickle-down economics does not work: an increase in GDP can actually leave most citizens worse off. America's recent growth was neither economically sustainable nor inclusive. Most Americans are worse off today than they were seven years ago.

But there need not be a trade-off between inequality and growth. Governments can enhance growth by increasing inclusiveness. A country's most valuable resource is its people. So it is essential to ensure that everyone can live up to their potential, which requires educational opportunities for all.

Stiglitz goes on to leave no doubt that the strategies of the Right, and especially the Bush/Cheney era, have failed by these criteria—and that they were not intended to succeed by these criteria. Despite the free market fundamentalism rhetoric from the Right, it is the Left that has been trying to make markets work, while what the Right has actually done is to protect established corporate interests from markets.