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The End of Economic Growth? Unintended Consequences of a Declining Population [pdf]

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Re: The End of Economic Growth? Unintended Consequences of a Declining Population [pdf]

#31

Post by lazyier »

lostlogin wrote: post #18
adrianN wrote: post #16

Why would you care about economic growth in absolute terms instead of productivity per person?

Because wealth isn’t evenly spread and those that beat this drum are on the wealthy end of the spectrum.

Wealth spread really doesn't matter so long as everybody is getting wealthier.

Which is exactly what is happening. By every metric imaginable the entire population of the planet is gaining in wealth. Some quicker then others. But gains are largely universal. Poverty is at it's lowest point in all of human history. And in a month it'll be even lower.

Also when wealth goes up, overall consumption as measured by actual natural resources consumed goes down. People have this misconception that increased wealth equals increased consumption, which is hardly the case. Wealth represents a increase in well being, which more often then not, is a result of increased efficiency.

By 'increased efficiency' I mean less human effort is required to produce more with less.

Re: The End of Economic Growth? Unintended Consequences of a Declining Population [pdf]

#32

Post by LatteLazy »

adrianN wrote: post #16

Why would you care about economic growth in absolute terms instead of productivity per person?

Investment only cares about the total growth in a market, and investment is a big chunk of the economy.

If I know I'll be selling 20% less widgets in 5 years as population falls, I wont upgrade my widget making machines. Suddenly the people making widget making machines are all unemployed. They stop buying widgets and my sales fall even further. That's ok when it happens in one sector but what about when it happens in every sector?

There are other examples: researching a cure for a disease might make sense if there are 100,000 sufferers but not 20,000. If x% of the economy is used for scientific research, you can afford a lot more LHCs with 500m people than 50m.

Growth has to fall as we have to cut population or nature will do on it for us. But it will be a difficult project with strange political outcomes.

Re: The End of Economic Growth? Unintended Consequences of a Declining Population [pdf]

#33

Post by sien »

adrianN wrote: post #16

Why would you care about economic growth in absolute terms instead of productivity per person?

Government debt is proportional to the size of the economy.

Many countries have social security systems that rely on the economy being big enough to pay for it.

Re: The End of Economic Growth? Unintended Consequences of a Declining Population [pdf]

#34

Post by ben_w »

adrianN wrote: post #23
blencdr wrote: post #10

Earlier quoted context omitted.

Productivity by automation is constrained by the available energy, also economic growth could already be limited by the lack of availale energy. https://energyeconomicgrowth.org/sites/eeg.opml.co.uk/files/...

Solar panels are pretty cheap. If lack of energy were a problem, I'd expect a lot more of them.

They are cheap, but production of them is currently growing roughly exponentially, so I don’t think your argument holds.

Re: The End of Economic Growth? Unintended Consequences of a Declining Population [pdf]

#35

Post by throwawaybbb »

lazyier wrote: post #31
lostlogin wrote: post #18

Earlier quoted context omitted.

Because wealth isn’t evenly spread and those that beat this drum are on the wealthy end of the spectrum.

Wealth spread really doesn't matter so long as everybody is getting wealthier. Which is exactly what is happening. By every metric imaginable the entire population of the planet is gaining in wealth. Some quicker then others. But gains are largely universal. Poverty is at it's lowest point in all of human history. And in a month it'll be even lower. Also when wealth goes up, overall consumption as measured by actual…

The bottom 50% of the US are poorer than they were in 1968 in both real and absolute terms.

https://en.wikipedia.org/wiki/Wealth_inequality_in_the_Unite...

Re: The End of Economic Growth? Unintended Consequences of a Declining Population [pdf]

#36

Post by johnchristopher »

LatteLazy wrote: post #32
adrianN wrote: post #16

Why would you care about economic growth in absolute terms instead of productivity per person?

Investment only cares about the total growth in a market, and investment is a big chunk of the economy. If I know I'll be selling 20% less widgets in 5 years as population falls, I wont upgrade my widget making machines. Suddenly the people making widget making machines are all unemployed. They stop buying widgets and my sales fall even further. That's ok when it happens in one sector but what about when it happens i…

> If I know I'll be selling 20% less widgets in 5 years as population falls, I wont upgrade my widget making machines. Suddenly the people making widget making machines are all unemployed.

Isn't it time to switch to plugin making machines then ? Setup a market opportunities study to try and see how to recycle skills, know-hows and professional network?

Re: The End of Economic Growth? Unintended Consequences of a Declining Population [pdf]

#37

Post by Pandabob »

taneq wrote: post #13
Pandabob wrote: post #5

Earlier quoted context omitted.

Sure, but one would then assume that in the age of automation, our productivity rates would be skyrocketing. It seems that that hasn't been the trend after the great recession [1]. Not to say that it couldn't change, but seems to me like there's some kind of narrative violation going on where "thought leaders" preach about automation, yet we can't see it in the statistics. Edit: Although, there's also a change that w…

Hmm. Couple of thoughts on this one: 1) Our standards for products have grown exponentially. It probably does take more labour-hours to produce, say, a mid-range car today than it did in 1980, but that car does unbelievably more than the 1980 model did. Everything in it is controlled and monitored by software. It has navigation and safety and vehicle control and convenience and entertainment features beyond anything…

1) is true, but the gains seem to be eaten up by the fact that, increasingly a larger part of the economy is made up of service sector jobs that are harder to automate [1].

[1]: https://www.mercatus.org/system/files/helland-tabarrok_why-a...

Re: The End of Economic Growth? Unintended Consequences of a Declining Population [pdf]

#38

Post by ralala »

LatteLazy wrote: post #32
adrianN wrote: post #16

Why would you care about economic growth in absolute terms instead of productivity per person?

Investment only cares about the total growth in a market, and investment is a big chunk of the economy. If I know I'll be selling 20% less widgets in 5 years as population falls, I wont upgrade my widget making machines. Suddenly the people making widget making machines are all unemployed. They stop buying widgets and my sales fall even further. That's ok when it happens in one sector but what about when it happens i…

A single dollar is always worth a specific part of what can be bought. If there is less to buy, the single dollar is worth less. If there are more dollars, the single dollar is worth less. The amount of investment in LHCs might drop absolutely, but why should it relatively?

Re: The End of Economic Growth? Unintended Consequences of a Declining Population [pdf]

#39

Post by fauigerzigerk »

LatteLazy wrote: post #32
adrianN wrote: post #16

Why would you care about economic growth in absolute terms instead of productivity per person?

Investment only cares about the total growth in a market, and investment is a big chunk of the economy. If I know I'll be selling 20% less widgets in 5 years as population falls, I wont upgrade my widget making machines. Suddenly the people making widget making machines are all unemployed. They stop buying widgets and my sales fall even further. That's ok when it happens in one sector but what about when it happens i…

>Suddenly the people making widget making machines are all unemployed

More likely they are going to retire before they are unemployed. Working age population always declines earlier than population as a whole.

I think it's pretty clear that there is a rate of population decline that is consistent with rising living standards as long as the decline is ultimately limited.

We should indeed focus far more on productivity. If the number of sufferers from a disease falls to a fifth while research productivity increases five times, finding a cure will make just as much sense as before.

Re: The End of Economic Growth? Unintended Consequences of a Declining Population [pdf]

#40

Post by vladimirralev »

adrianN wrote: post #16

Why would you care about economic growth in absolute terms instead of productivity per person?

The transition from a larger population to a smaller one means the less workers will have to temporary fund the social programs of a large number of retired people. The retired people will also be the largest voting block and will dominate policy-making to force funds into the social programs that they worked for. Depending on the shock, this can cause total breakdown of the system. That's why everybody is racing now "to sustain the expansion at any cost" and to maintain unemployment low for as long as they can. Once people start retiring from this cycle in particular, nobody knows what will happen.
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