While economic growth is often considered a beneficial force, the downsides of this process can also be quite severe. The costs of economic growth can do substantial damage to some sectors of a society, including long-term costs that may not be initially evident during a growth cycle. Some of the most common costs of economic growth include environmental damage, increases in income disparity, and the opportunity for social and societal damages. While these risks may change depending on the type and form of growth, and though the benefits may outweigh the potential downsides, the costs of economic growth need to be considered in order to promote sustainable, manageable growth.
The environment has often been an unintentional victim of economic growth. One reason this may occur is that economic growth tends to lead to a growth in consumerism, which can place strain on natural resources that were formerly sustainable. Animal and plant endangerment and extinction are often a side effect of economic growth. For instance, whale populations in the 19th century dropped to nearly unrecoverable levels following the development of a strong market for whale oil as fuel. Even in the 21st century, some whale populations have yet to recover from the devastating species depletion driven by economic growth.
Similarly, new developments in technology can sometimes have unforeseeable environmental impact. For example, when inventor Charles Midgely synthesized chlorofluorocarbon in the early 20th century, he spurred economic growth by revolutionizing the concept of home refrigeration. Unbeknownst to him, this tremendous invention also became largely responsible for severe damage to the protective O-zone layer surrounding the Earth, doing centuries worth of damage in a few short decades.
While economic growth sounds like it may be beneficial to all, it historically tends to widen the income gap between the poor and the rich. As income disparity rises, the definition of poverty broadens, leading to increased pressure on governments to create programs to assist the poor. In this way, economic growth can actually lead to increased public spending, which may eventually nullify the increased wealth created by the growth cycle. Rising income disparity also can lead to increased political and social tension between different segments of the population.
Social costs of economic growth can be difficult to foresee or manage as they arise. As economic growth spurs increases in technology and population, aging social structures may rapidly become inadequate to handle the burden of increase. For instance, the development of automobiles in the late 19th century is considered one of the biggest contributors to economic growth in the 20th century, yet also led to severe infrastructure strain on roads, bridges, and highways, the social stress caused by massive increases in traffic, and the increase of death and injury related to automobile accidents. Though few would argue that cars were not worth the trouble, the costs of economic growth can help future inventors and economists understand the need for careful review and consideration in the interest of promoting more sustainable growth in the future.
