Harvard professor Benjamin Friedman waxed economic about the moral benefits that arise from broad and sustained economic growth in a Monday night speech sponsored by the Tuck School of Business and its Allwin Initiative for Corporate Citizenship. Friedman, who spoke to a crowd of about 80 in Carson Hall, is the William Joseph Maier Professor of Economics and Directory of Undergraduate Studies at Harvard University.
In a speech entitled "The Moral Consequences of Economic Growth," Friedman spoke about the importance of economic growth and increasing production and efficiency, while emphasizing that increases in standards of living must be broad and inclusive. He argued that when an entire population experiences economic prosperity, or even perceived advancement, it has direct bearing on the social, political and moral character of that society.
"When a broad cross section of the population is enjoying material advancement and has a sense of confidence that the improvement will continue, that is [the time] when societies have the moral opportunity to address such questions as tolerance, attitude towards immigrants, race relations, religious prejudice and programs for the disadvantaged," Friedman said.
Although primarily addressing third world development, Friedman warned that the connection between a society's perceived economic growth and its moral disposition could have ramifications in the United States.
"2004 was the fifth year in a row that median income in the United States failed to keep pace with rising prices and this trend should continue," Friedman warned.
Friedman cautioned that the United States could eventually experience some of the backlash that occurs when most people feel like the economy has stagnated.
According to Friedman, fluctuations in American sentiment toward immigration parallel economic regress and progress. He cited the fact that during the 1960s, a time of economic prosperity for most, the National Origins Act, which restricted immigration, was repealed. During the 1980s, however, when real income for Americans had begun to decrease, anti-immigrant movements re-emerged.
He partly credited broad economic growth to the advent of voting rights for women and African-Americans.
Most of Friedman's lecture, however, focused on why Westerners should care about whether developing nations achieve high growth rates and broad material improvement.
"If we were part of the three-fourths of the world's population who live on much less income than [Americans] we would have very immediate concerns because a change in income at that level relates to great improvements, such as how many people can read, whether people get proper nutrition, and so on," he said.
Linking democracy with economic growth, Friedman noted that material advancement can politically benefit the United States through the creation of democracies abroad.
"If what matters is primarily a sense of progress, then many developing countries will not need to wait until they attain Western standards of living in order to move towards liberal democracy," he said. "In a quarter century, due to a sustained period of economic progress, South Korea experienced a transformation from a one-party military dictatorship to what is now a well-functioning democracy."
According to Friedman, China's rapidly expanding economy and rising standard of living mean the country will eventually advance from a one-party regime to a more open and free government.
Friedman also addressed what he viewed as a pervasive problem: the manner in which people discuss and view economic growth and morality. The debate over growth, he claimed, has become polarized, with people believing that they must either support economic expansion or moral causes.
Making a final point about the nature of the government's relation to the free market, Friedman addressed the problems of laissez-faire economics.
"We are all familiar with the fact that the market mechanism left to its own devices will overproduce pollution, noise and all other externalities," Friedman said. "This is why we accept that the government or some agency must superimpose mechanisms on the market to ensure fairness, tolerance, opportunity, and democracy."
