More than anything else, the cardinal economic opposition of our times may be between proponents of growth and those who believe that it has run its course, the US camping firmly on the side of the former, while Europe gravitates towards the later.

On the surface it may be hard to escape the renewed malthusian argument whereby economic growth since the industrial revolution has be driven by an increasing consumption of fossil fuels. As climate changes, environmental externalities would gradually gain over gross economic value creation, bringing the world to a net standstill, and everyone to a more frugal lifestyle.

There is however a basic flaw in the reasoning : the nature of economic growth also changes. First of all, when one thinks of economic growth, one is really talking about economic welfare, i.e. the quantum of happiness one derives from the consumption of goods and services.

Let us now run a simple thought experiment. Let us imagine that one would find a cure for, say, tongue cancer. Let us imagine that the cure is found via genetic engineering, whereby T Cells are designed to attack the specific genetic profile of the patient’s specific cancer. This is an information problem, for which emerging calculation intensive tools are probably the best fit. It is also an upfront outlay situation : the problem is hard to solve, the solution easier to replicate.

How much economic welfare would be created in that case ? It is hard to say but I, for one, would feel very happy – as happy as I am sad sometimes when I remember her – to shoot the shit and laugh with my late sister. See what I mean ?

It may be useful not to lose sight of how innovation changes everything, down to counterfactuals, and the way we measure stuff. Mario Draghi reminded europeans of this last September, and for all his flaws and bluster, Elon Musk embodies the unlimited promise of science based progress. What do we know, a golden age may well be around the corner, this is how we got here after all.

Image credit : unknown, Einstein’s desk on the day of his death.