What is economic growth?

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Capitalist economies have shown an erratic but sustained tendency towards economic growth, when measured as an increase in GDP. They have on occasion been through nearly disastrous periods (such as the Great depression), and some have argued that it has only been government intervention that has prevented capitalist economies from collapsing, while others maintain that it was government intervention that caused such disasters. The former argue that it is only government intervention that has enabled capitalist economies to ever grow at all, or even that economic growth in capitalist economies is not due to capitalism itself, but exists despite capitalism – perhaps due to some other reason such as increased scientific knowledge, or some form of ‘imperialism’. Others have argued that the natural tendency of capitalism is to continuous growth and that government intervention in the form of subsidies and taxes is the cause of depressions. Yet others argue that growth, or often growth without enough freedom, is a bad thing. Still others argue that modern capitalism has been a disaster because of its other effects besides the growth of GDP. Further discussion on these points might be found in following sections. Nevertheless, good or bad, because of or despite capitalism, it can be seen from history that there has been a sustained tendency for capitalist economies to grow over time.

It should be noted, however, that many economic systems that have existed for significant periods of time have also exibited economic growth. Thus, although such growth is an aspect of capitalism, it is by no means unique to capitalist economies.