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Pioneering economist says our obsession with growth must end

nytimes.com

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Re: Pioneering economist says our obsession with growth must end

#261

Post by jjoonathan »

chii wrote: post #237
jjoonathan wrote: post #56

Earlier quoted context omitted.

> That is also a kind of growth! Yes, but not one that benefits from investment, which is how rich people get paid for being rich. Rich people want very, very, very much to be paid for being rich. Since a dollar is a vote, this concern completely dominates our political and cultural thought processes. The tricky part is that retirement funds use exactly the same mechanism, so those of us with retirement accounts have…

> ... not one that benefits from investment, which is how rich people get paid for being rich. riches or wealth, is merely stored up work that could be expended, instead of consumed. They aren't being paid just for being rich - they are making decisions on how to expend that stored up work to produce _even more_ stored up work for the future. By making that decision wisely, they earn the rewards of the stored up work…

That's the theory. It's different in practice.

Ok, suppose a new frontier has opened up. Maybe it's geographic, maybe a gold rush, maybe a technological revolution -- but in any case, there are lots of opportunities to forego consumption today in order to create greater value tomorrow. Stuff has to be built! Investment has value. We should want to encourage it and reward it, because everybody wins. Great! So what's the problem?

Well, what happens at the top of the growth sigmoid? The stuff has been built. Foregoing consumption today... just doesn't help in the way that it used to. Investment just doesn't have much value (gasp). Returns drop. In fact, they plummet, because now instead of having a lot of growth service a little capital you have a little growth service a lot of capital. Double whammy. Ok, markets contract, so what's the problem? There isn't one, if you let it happen -- but if you are a rich person, this is an existential threat. You can't get paid for being rich anymore. Unless... wealth is power, and power can be used to change the rules. So you change the rules. You invent other ways of getting payed for being rich. Because that's what you really care about.

That's the fundamental reason why our economic narrative pretends that everything is exponential, not sigmoid: the dirty deeds happen at the top of the sigmoid.

Re: Pioneering economist says our obsession with growth must end

#262

Post by abeppu »

chii wrote: post #235
abeppu wrote: post #181

I feel like this could have been a lot better if it were more concrete. What's wrong with wanting GDP growth? - Consider two families A and B, each with two earners and a small child. The parents of family A both work full time, earning $125k each, and they spend $20k/yr on childcare. The parents of family B each work part time, earn $110k per year each, and together with help from one grandparent are able to care fo…

> The parents of family A both work full time, earning $125k each, and they spend $20k/yr on childcare. > The parents of family B each work part time, earn $110k per year each family B is better off, at least financially, because they earn more after taking away child-care costs (and also somehow they have free labour from a grandparent). Family A earns $125k-$20k=$105k for full time work, where as family B earns $11…

> family B is better off, at least financially

You got the numbers wrong; I said each family had two earners, and I said they made $125k each and $110k each, deliberately setting up family A to have $230k after childcare and family B to have $220k. Both are clearly comfortable, but family B is apparently working less but at a higher effective hourly rate. With $10k/yr less, less work, and more time with their young child, I think many people would still say family B is coming out ahead.

> GDP measures how much work is produced

But that's not even true. It only seeks to track exchanges where money changed hands. If a childcare center closes and the parents care for their own kids, the same work can be done, but it's not included GDP. If I grow some of my own vegetables from seed which I otherwise might have bought from the grocery store, neither my labor nor the value I derive from that produce contributes to GDP.

> nothing is wrong - the problem with framing it this way is the underlying assumption of equity of distribution of the increased wealth.

Even without concerns about the income distribution, we know that what people actually value isn't just money, but GDP sums over transactions and ignores plenty of factors that may do as much or more for utility. Any time people choose to retire when they could keep working, or pick a career other than the one that would bring them the greatest expected income, they demonstrate that non-monetary factors can easily outweigh their profit-maximizing drive. But GDP doesn't attempt to measure those other factors.

This sounds outlandish only because we've lived with this system for so long, but it would be entirely reasonable for the BLS or some other body to run monthly or quarterly surveys to get information on changes of those other factors, and though it would be imperfect, we could approach something that looked more like a utility function for real humans. How hard would it be to ask a decently large group of people regularly:

- How satisfied are you with your health? Are you inhibited in doing the things you'd like by illness, injury, disability or aging?

- How secure are you in your housing? In your access to health care? In your ability to feed yourself and your family?

- How stressed are you?

- How happy are you with your relationships with close friends or family?

- Do you feel you have the time and resources to learn and grow in the ways that are important to you?

- Do you regularly engage activities that support finding a flow state?

- Do you find beauty in your environment?

Etc etc. I won't pretend that I know all the questions to ask, or how scores for their answers should be weighted. But _something_ should try to measure, "Are we happy or satisfied in our lives?" and not just "What are we paid?". Kuznets introduced the modern form of G(D|N)P almost 90 years ago, and he recognized its shortcomings then, and I'm frankly disappointed that at some point we didn't get around to at least a serious attempt at replacing it with something better.

Re: Pioneering economist says our obsession with growth must end

#263

Post by chii »

fleddr wrote: post #212
dionidium wrote: post #133

Earlier quoted context omitted.

This pretty clearly isn't true. You could simply work fewer hours and live a 1920s lifestyle, if that's what you want. You won't have good healthcare (neither did people in 1920), you probably won't go to college (just like most people in 1920), you won't be able to buy lots of fancy and complicated consumer goods (exactly like people in 1920), you won't own a laptop (just like every single human being in 1920), or l…

That's not how it works at all. Say a machine gets installed at work that increases productivity by 20%. In a sane system, you could now work 20% less for the same output, a vast improvement in quality of life. In reality, you might lose your job. Or if you keep it, you'll work the same hours as before. You'll definitely not get a pay increase due to the higher productivity. Meanwhile, cost of living keeps rising.

> You'll definitely not get a pay increase due to the higher productivity.

that's because the source of that productivity wasnt you - it was the invention and capital investment in that machine (which you happen to drive).

In a system which redistributes wealth, you'd get some returns (such as better public services). Under the current system of capitalism, there's not that much redistribution.

Re: Pioneering economist says our obsession with growth must end

#264

Post by chii »

jjoonathan wrote: post #261
chii wrote: post #237

Earlier quoted context omitted.

> ... not one that benefits from investment, which is how rich people get paid for being rich. riches or wealth, is merely stored up work that could be expended, instead of consumed. They aren't being paid just for being rich - they are making decisions on how to expend that stored up work to produce _even more_ stored up work for the future. By making that decision wisely, they earn the rewards of the stored up work…

That's the theory. It's different in practice. Ok, suppose a new frontier has opened up. Maybe it's geographic, maybe a gold rush, maybe a technological revolution -- but in any case, there are lots of opportunities to forego consumption today in order to create greater value tomorrow. Stuff has to be built! Investment has value. We should want to encourage it and reward it, because everybody wins. Great! So what's t…

> You invent other ways of getting payed for being rich.

so what's this other way that's been implied, but never actually explicitly explained?

Lots of investors accept low returns now - that's _why_ prices are expensive. Unless you're talking about the corruption in countries like russia, where resources and power are usurped, rather than created.

Re: Pioneering economist says our obsession with growth must end

#265

Post by Animats »

abetusk wrote: post #219
Animats wrote: post #199

Wikipedia's article on Herman Daly is far more useful. This NYT writer is from the fluff department, the part that cranks out "lifestyle" sections and clickbait, not the news side. Wikipedia: "Daly argues that nature has provided basically two sources of wealth at man's disposal, namely a stock of terrestrial mineral resources and a flow of solar energy. An 'asymmetry' between these two sources of wealth exist in tha…

Thanks for the links. I'm still confused though. Is the underlying assumption that the sun's energy being dumped on earth is essentially saturated? That is, "nature" has long since used all the available sun's energy and any energy we use from the sun is effectively taking away from nature? Doing some back of the envelope calculations, we can estimate that the sun dumps around 700 peta watt hours per day whereas we u…

> I'm still confused though. Is the underlying assumption that the sun's energy being dumped on earth is essentially saturated?

No, it's just an economist talking. He's just saying that the sun's energy cannot be depleted faster, while mineral resources can.

Re: Pioneering economist says our obsession with growth must end

#266

Post by TapWaterBandit »

Schroedingersat wrote: post #226
Animats wrote: post #199

Wikipedia's article on Herman Daly is far more useful. This NYT writer is from the fluff department, the part that cranks out "lifestyle" sections and clickbait, not the news side. Wikipedia: "Daly argues that nature has provided basically two sources of wealth at man's disposal, namely a stock of terrestrial mineral resources and a flow of solar energy. An 'asymmetry' between these two sources of wealth exist in tha…

The answer is now. The 2030s is the decade of peak everything. Production of everything has been growing exponentially, but at a cost that is growing fraster. From oil, to copper, to lithium, to rare metals, to meat, to topsoil, to methane, to classical computing, to GHG buffering capacity, almost all of the logistic curves we've been pretending are exponentials reach their inflection points in the next couple of dec…

This type of thing has been said many times before. No reason to believe it will happen this time.

I still vividly remember "peak oil" in the late 2000s/early 2010s.

Re: Pioneering economist says our obsession with growth must end

#268

Post by oceanplexian »

Apes wrote: post #246
ekkeke wrote: post #71

Can someone explain to me why we can't keep growing until the death of the sun? Growth doesn't mean more materials or natural resources necessarily, a microprocessor uses some of the cheapest and most abundant materials and uses less of them now than before. Why might we not continue to find new designs and discoveries that allow us to make ever more efficient and complex objexts, that in turn are worth continually m…

Efficiency isn't a silver bullet. There's a limit to free gains from efficiency - you can't go past 100% efficiency, and even at 100% efficiency, you still need to spend energy to do things. It will always take at least 4190 Joules to heat 1 kg of water by 1°C. Even with perfect efficiency, you can never beat that number. And the closer we get to 100% efficiency, it gets asymptotically more difficult to improve effic…

> It will always take at least 4190 Joules to heat 1 kg of water by 1°C. Even with perfect efficiency, you can never beat that number.

You can. A great example of technology that produces greater than 100% efficiency is a heat pump. You can actually buy commercial heat pump tank water heaters that are much greater than 100% efficient at turning electricity into hot water. The energy comes from the ambient air, but the Earth has no shortage of heat energy that can be recovered to do useful work.

Re: Pioneering economist says our obsession with growth must end

#269

Post by oceanplexian »

csours wrote: post #50

I have a heretical thought: the integrated circuit revolution has made capitalism and the economy in general look much better than it actually is.

I don’t buy it. Even before mass adoption of integrated circuits capitalism was on a tear in the 20th century. We had Ford cranking out mass-produced automobiles on assembly lines, prefabricated homes, nuclear energy, advances in medicine and sanitation, advances in aerospace, and so on.

While integrated circuits are great and clearly driving large parts of the economy, they aren’t the “source” of our economic success, but actually the latest manifestation of a long line of advances that have come out of a well functioning economic system.

You can clearly see this distinction in fields like software engineering, where theoretically every country in the world is on an equal playing field, but the US still dominates. It’s because the economic system in the US is superior, and less capitalistic systems are not as good at driving innovation.

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