Finance:Prosperity

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Prosperity is the state of flourishing, thriving, good fortune and successful social status.[1] Prosperity often produces profuse wealth including other factors which can be profusely wealthy in all degrees, such as happiness and health.

Competing notions of prosperity

Economic notions of prosperity often compete or interact negatively with health, happiness, or spiritual notions of prosperity. For example, longer hours of work might result in an increase in certain measures of economic prosperity, but at the expense of driving people away from their preferences for shorter work hours.[2] In Buddhism, prosperity is viewed with an emphasis on collectivism and spirituality. This perspective can be at odds with capitalistic notions of prosperity, due to the latter's association with greed.[3] Data from social surveys show that an increase in income does not result in a lasting increase in happiness; one proposed explanation to this is due to hedonic adaptation and social comparison, and a failure to anticipate these factors, resulting in people not allocating enough energy to non-financial goals such as family life and health.[4]

The World Bank's "Voices of the Poor", based on research with over 20,000 poor people in 23 countries, identifies a range of factors which poor people identify as part of poverty. These include abuse by those in power, disempowering institutions, excluded locations, gender relationships, lack of security, limited capabilities, physical limitations, precarious livelihoods, problems in social relationships, weak community organizations and discrimination.

Debate under economic growth

Economic growth is often seen as essential for economic prosperity, and indeed is one of the factors that is used as a measure of prosperity. The Rocky Mountain Institute, among others, has put forth an alternative point of view, that prosperity does not require growth, claiming instead that many of the problems facing communities are actually a result of growth, and that sustainable development requires abandoning the idea that growth is required for prosperity.[5][6] The debate over whether economic growth is necessary for, or at odds with, human prosperity, has been active at least since the publication of Our Common Future in 1987, and has been pointed to as reflecting two opposing worldviews.[7]

In 1996, the British ecological economist Tim Jackson outlined the conflicting relationship between human wellbeing and economic growth in his book Material Concerns.[8] Prosperity without Growth then, first published as a report[9] to the UK Sustainable Development Commission in 2008, comprehensively expanded on the arguments and policy recommendations.[10]

Internationally organised, the Degrowth movement is taking a similar position and argue that overconsumption lies at the root of long-term environmental issues and social inequalities, advocating for the down-scaling of production and consumption.[11] In the 2021 Review on the Economics of Biodiversity commissioned by the UK Treasury, Partha Dasgupta argues prosperity has come at a "devastating" cost to biodiversity, and that sustainable economic growth will require abandoning GDP as a measure for economic progress.[12]

Other researches and institutions argue that sustained economic growth remains essential for broad-based prosperity, particularly the reduction of extreme poverty and improvements in living standards. Empirical analyses indicate that changes in GDP per capita account for the large majority of historical variation in global poverty rates, and that growth has been a primary driver of the decline in extreme poverty over recent decades.[13] World Bank assessments similarly emphasize that sustained growth generates jobs, supports public services and infrastructure, and is central to ending extreme poverty and boosting shared prosperity, even while acknowledging that the distribution of gains depends on complementary policies.[14][15] Historical accounts, such as those by economist Angus Deaton, document how sustained rises in income and living standards over the past two centuries have been associated with dramatic improvements in health, longevity, and material well-being for large populations, constituting a "great escape" from deprivation.[16]

Synergistic notions of prosperity

Many distinct notions of prosperity, such as economic prosperity, health, and happiness, are correlated or even have causal effects on each other. Economic prosperity and health are well-established to have a positive correlation, but the extent to which health has a causal effect on economic prosperity is unclear.

There is evidence that happiness is a cause of good health, both directly through influencing behavior and the immune system, and indirectly through social relationships, work, and other factors.[17] One study which advances a holistic definition of prosperity is the Legatum Prosperity Index (an annual report by the Legatum Institute, a UK-based independent educational charity founded by Legatum), which uses data from 56 separate sources, including the World Health Organization, Global slavery Index and World Bank, to rank 169 nations in an index which goes beyond GDP as a measurement of national prosperity.[18][19][20]

Economic determinants and institutions

Research in economics identifies institutions, particularly secure property rights, constraints on elites, and the ability of individuals to engage in voluntary exchange, as fundamental determinants of long-run differences in prosperity across countries. Inclusive economic institutions that protect property rights for a broad cross-section of society and provide incentives for investment and innovation are associated with higher levels of income and growth, while extractive institutions that concentrate power and resources tend to produce poorer outcomes.[21][22][23]

Cross-country studies and quantitative reviews of the literature find positive associations between measures of economic freedom (including property rights protection, freedom to trade, and limited regulatory barriers) and higher economic growth, income levels, and investment. Meta-analyses of published estimates generally support a positive relationship between economic freedom and growth and income.[24][25]

Analyses using freedom and prosperity indicies similarly report strong correlations between higher economic freedom scores and higher prosperity outcomes, with some evidence consistent with a casual link from improvements in economic freedom to subsequent gains in GDP per capita.[26]

Ecological perspectives

In ecology, prosperity can refer to the extent to which a species flourishes under certain circumstances.[27][28]

See also

References

  1. ↑ "Definition of Prosperity". Definition of Prosperity. Random House. February 2009. http://dictionary.reference.com/browse/prosperity. Retrieved 1 July 2009. 
  2. ↑ Cowling, Keith (July 2006). "Prosperity, Depression and Modern Capitalism". Kyklos 59 (3): 369–381. doi:10.1111/j.1467-6435.2006.00337.x. http://www3.interscience.wiley.com/journal/118560998/abstract?CRETRY=1&SRETRY=0. Retrieved 10 February 2009. 
  3. ↑ Gottlieb, Roger S. (2003). Liberating Faith. Rowman and Littlefield. p. 288. ISBN 978-0-7425-2535-1. https://books.google.com/books?id=6GHM_9ktdyoC. 
  4. ↑ Easterlin, Roger A. (September 2003). "Explaining happiness". Proceedings of the National Academy of Sciences 100 (19): 11176–83. doi:10.1073/pnas.1633144100. PMID 12958207. 
  5. ↑ Kinsley, Michael J. (1997). "Sustainable development: Prosperity without growth". Rocky Mountain Institute. http://www.mtnforum.org/oldocs/407.pdf. 
  6. ↑ Kinsley, Michael J.; Lovins, L. Hunter. "Paying for Growth, Prospering from Development". Rocky Mountain Institute. http://www.rmi.org/Knowledge-Center/Library/E96-15_PayingGrowthProsperingDevelopment. 
  7. ↑ Verstegen, S. W.; Hanekamp, J. C. (December 2005). "The sustainability debate: Idealism versus conformism—the controversy over economic growth". Globalizations 2 (3): 349–362. doi:10.1080/14747730500367843. Bibcode: 2005Glob....2..349V. 
  8. ↑ Jackson, Tim (1996). Material Concerns — Pollution, Profit and Quality of Life. Routledge. pp. 177–193. https://archive.org/details/materialconcerns00jack. 
  9. ↑ Prosperity Without Growth? The Transition to a Sustainable Economy | Report to the UK Sustainable Development Commission, 2008.
  10. ↑ Jackson, Tim (2009). Prosperity Without Growth. Routledge. https://www.routledge.com/Prosperity-without-Growth-Foundations-for-the-economy-of-tomorrow-2nd/Jackson/p/book/9781138935419. 
  11. ↑ Demaria, Federico (27 March 2018). "The rise - and future - of the degrowth movement". The Ecologist. https://theecologist.org/2018/mar/27/rise-and-future-degrowth-movement. 
  12. ↑ Briggs, Helen (February 2, 2021). "Prosperity comes at 'devastating' cost to nature". BBC. https://www.bbc.com/news/science-environment-55893696. 
  13. ↑ Cerra, Valerie; Lama, Ruy; Loayza, Norman (2021-03-12) (in en). Links Between Growth, Inequality, and Poverty: A Survey1. doi:10.5089/9781513572666.001.A001. https://www.elibrary.imf.org/view/journals/001/2021/068/article-A001-en.xml. Retrieved 2026-08-07. 
  14. ↑ "Poverty and Shared Prosperity 2022" (in en). https://www.worldbank.org/en/publication/poverty-and-shared-prosperity. 
  15. ↑ "Dreaming Big on Growth? A Decade of Insights from the Long Term Growth Model". https://www.worldbank.org/en/news/feature/2023/04/11/dreaming-big-on-growth-a-decade-of-insights-from-the-long-term-growth-model. 
  16. ↑ "The great escape from death and deprivation" (in en). 2014-03-20. https://cepr.org/voxeu/columns/great-escape-death-and-deprivation. 
  17. ↑ Argyle, Michael (December 1997). "Is happiness a cause of health?". Psychology & Health 12 (6): 769–781. doi:10.1080/08870449708406738. 
  18. ↑ "Economic wellbeing masks UK's unravelling social fabric". The Times. 24 November 2019. https://www.ft.com/content/6493226a-0d41-11ea-bb52-34c8d9dc6d84. 
  19. ↑ "Tolerance towards LGBT+ people seen rising globally". Reuters. 25 November 2019. https://www.reuters.com/article/us-global-lgbt-tolerance/tolerance-towards-lgbt-people-seen-rising-globally-idUSKBN1XZ02M. 
  20. ↑ "The world is doing much better than the bad news makes us think". Washington Post. 2 December 2019. https://www.washingtonpost.com/opinions/the-world-is-doing-much-better-than-the-bad-news-makes-us-think/2019/12/02/25086e72-1532-11ea-8406-df3c54b3253e_story.html. 
  21. ↑ Acemoglu, Daron (2003-06-17) (in en). Root Causes. doi:10.5089/9781451952926.022.A009. https://www.elibrary.imf.org/view/journals/022/0040/002/article-A009-en.xml. Retrieved 2026-08-07. 
  22. ↑ Acemoglu, D.; Johnson, S.; Robinson, J. A. (2002-11-01). "Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution" (in en). The Quarterly Journal of Economics 117 (4): 1231–1294. doi:10.1162/003355302320935025. ISSN 0033-5533. https://academic.oup.com/qje/article-lookup/doi/10.1162/003355302320935025. 
  23. ↑ (in en-US) Chapter 6 Institutions as a Fundamental Cause of Long-Run Growth, Handbook of Economic Growth, 1, Elsevier, 2005, pp. 385–472, doi:10.1016/S1574-0684(05)01006-3, ISBN 978-0-444-52041-8, https://www.sciencedirect.com/science/article/pii/S1574068405010063, retrieved 2026-08-07 
  24. ↑ Lawson, Robert; Miozzi, Vincent; Tuszynski, Meg (2024). "Economic freedom and growth, income, investment, and inequality: A quantitative summary of the literature" (in en). Southern Economic Journal 90 (4): 1099–1135. doi:10.1002/soej.12680. ISSN 2325-8012. https://onlinelibrary.wiley.com/doi/abs/10.1002/soej.12680. 
  25. ↑ Doucouliagos, Chris; Ulubasoglu, Mehmet Ali (March 2006). "Economic freedom and economic growth: Does specification make a difference?" (in en). European Journal of Political Economy 22 (1): 60–81. doi:10.1016/j.ejpoleco.2005.06.003. ISSN 0176-2680. http://www.sciencedirect.com/science/article/pii/S017626800500042X. 
  26. ↑ ndannaoui (2023-09-18). "The causal relationship between economic freedom and prosperity" (in en-US). https://www.atlanticcouncil.org/in-depth-research-reports/books/the-causal-relationship-between-economic-freedom-and-prosperity/. 
  27. ↑ Klimes, F.; Turek, F. (February 1984). "The prosperity and stability of clovers in intensive grassland at higher altitudes (Lathyrus pratensis, species composition, fertilization)". Plant Ecology 30 (2): 177. ISSN 0035-8371. http://www.fao.org/agris/search/display.do?f=./1984/v1004/CS8400848.xml;CS8400848. 
  28. ↑ Davis, J. S.; Lipkin, Y. (September 1986). "Lamprothamnium prosperity in permanently hypersaline water". Swiss Journal of Hydrology 48 (2): 240–246. doi:10.1007/BF02560200. ISSN 1420-9055. Bibcode: 1986AqSci..48..240D. 



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