I moved to New Zealand in 2003 because I saw it as an island (well, three islands and change) of sanity in a world going mad. The Outside of the Asylum, as Douglas Adams might put it.

People could generally pursue their different visions of the good life, so long as they did not unduly bother others while doing so – as it should be. As for economic policy – it would be hard to find better. Underlying it seemed to be a cross-party political consensus on the merits of economic growth.

When I arrived, there was some nervousness in parts of the political left about the reforms of the 1980s but the general framework for economic growth had strong support: sound monetary policy under the Reserve Bank Act, sound finances under the Public Finance Act, free trade and generally liberal labour markets.

That consensus has weakened over the past few years, with more attacks not only on the framework that helps facilitate growth in New Zealand but also on the merits of growth itself. And so we launched our report, The Case for Economic Growth, at the New Zealand Initiative’s annual retreat last night in Auckland.

For over 99% of human history, world per capita GDP was less than 50c per day and nobody could reasonably expect their children to have anything other than roughly the life that they themselves had had. Sustained real growth required productivity growth – real new innovation – to exceed population growth rates. It has since the early 1800s but it has also been a historic aberration.

Desperate grinding poverty characterised most of human history. Debates that pit growth against egalitarian norms forget that growth is the poverty-killer.

Economic growth has made the rich richer but has also pulled hundreds of millions of people out of desperate poverty and into better lives. In fact, some of the biggest recent gains have come to some of the world’s poorest. Think about what we would have given up if our great-grandparents had decided it were time for a Lange tea-break given how much better off they were than their great-grandparents.

We care about GDP growth rates not because of bank balances but because a richer world is one in which we can afford all the things we do care about. As growth took off, we could afford to have more medical specialists and researchers; child mortality rates plunged and life expectancy surged.

Longer life expectancy, lower child mortality, higher education rates, shorter work hours, safer working conditions – they all come with economic growth. And so too did better environmental conditions as rich places can afford to ban urban coal fires and to treat sewage before it flows into the rivers.

It’s not surprising then that happiness, as best we can measure it, also improves with economic growth.

Wealth also makes us safer. Although it doesn’t stop natural disasters, it does make each disaster less deadly: wealthier countries can afford stronger buildings.

In the report, we discuss research suggesting a 4% real growth rate would more than halve the expected number of fatalities in a future Wellington earthquake as compared to a 1% growth rate. Wealth is the best insurance against the broadest possible range of calamities. And those benefits are not just for those at the top. Consider New Zealand income growth since 1953 (see chart).

While real incomes for the top 1% and top 10% rose 50% over the past 60 years, real incomes for the bottom 90% doubled. The data series here begins in 1953: we have had a doubling of real income within living memory.

Further, income mobility remains strong. The Treasury reports that, among those in the top fifth of household earnings in any year, 30% had dropped to a lower quintile by the next year’s measure, and mobility was greater over longer periods. Just who is in the top percentiles changes a fair bit from year to year.

New Zealand’s long period of stagnant real incomes from the 1970s through the early 1990s reminds us that growth cannot be taken for granted. Removing impediments to growth, like restrictive urban land use policies that stymie development, or rules blocking foreign investment, helps ensure continued growth.

The occasional reminder of the merits of economic growth is then well worthwhile.