Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
Good point. At 23:09 9/05/05, you wrote: Robert Scott Gassler wrote: The main point about GNP or GDP is that it is supposed to be a measure of how much junk is produced. And my point would be that the GDP doesn't even measure that. You could produce less junk and still have the GDP go up with medical costs, police and incarceration costs, advertising, higher extraction costs for scarcer natural resources and so on. The GDP, by virtue of its high visibility, introduces a sort of political moral hazard into public accounts. It would be political suicide for a government to do good things that incidentally shrunk the GDP. Look at what happened to Jimmy Carter for just musing about the malaise. As a matter of fact, I think malaise would be a good name for the moral hazard that the GDP engenders. The Sandwichman __ Post your free ad now! http://personals.yahoo.ca Robert Scott Gassler Professor of Economics Vesalius College of the Vrije Universiteit Brussel Pleinlaan 2 B-1050 Brussels Belgium 32.2.629.27.15
Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
To the second question, the answer is yes. To the first, I'm looking it up. It was an aside. At 02:38 10/05/05, you wrote: On 5/9/05, Robert Scott Gassler [EMAIL PROTECTED] wrote: Are you referring to the Arrow impossibility theorem? Samuelson says that the theorem does not refer to a social-welfare function but to a voting rule. If you go back to the original Bergson article (written under the pseudonym Burke), you find the social welfare function formulated in a way that makes it virtually impossible to refute. Where does Samuelson say so? Do you mean Bergson's Reformulation article, QJE, 1938? Best, Julio Robert Scott Gassler Professor of Economics Vesalius College of the Vrije Universiteit Brussel Pleinlaan 2 B-1050 Brussels Belgium 32.2.629.27.15
Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
I don't recall Bergson borrowing anything about hours of labor to construct a social welfare function. He started with the everyday idea of social welfare and said it is dependent on whatever one thinks it depends on: W = f(u1, u2, ..., alpha1, alpha2, ...). The u's were the utilities of the individuals. The alphas were the other important things in life. Without the alphas you get E(u1, u2, ...) which he calls an economic welfare function but which is the social-welfare function we all know. If you argue that a particular economy has a particular W, you are talking about an empirical social welfare function. If you argue that a particular economy should have a particular W, you are talking about a normative social welfare function. If you assume a particular form for it, you are neoclassical, or linear, or egalitarian, or Rawlsian, or whatever. A Marxist would place heavier emphasis on the u's of the workers than a neoliberal. If alpha1 were freedom [of business from certain government controls] and alpha2 equality of income distribution, then a Marxist would care more about the latter than the former, and a neoliberal would be the opposite. It is hard to refute because it is a notation or general logical formulation, not a political point of view. though I hardly think there are many Marxists who would bother with it. At 03:55 10/05/05, you wrote: Robert Scott Gassler wrote: If you go back to the original Bergson article (written under the pseudonym Burke), you find the social welfare function formulated in a way that makes it virtually impossible to refute. It has been my contention that a key assumption Bergson adopted from Barone make it not only possible, but necessary to refute. Here's how Barone dealt with the immensely important and tricky issue of the hours of labour: It is convenient to suppose -- it is a simple book-keeping artifice, so to speak -- that each individual sells the services of all his capital and re-purchases afterwards the part he consumes directly. For example, A, for eight hours of work of a particular kind which he supplies, receives a certain remuneration at an hourly rate. It is a matter of indifference whether we enter A's receipts as the proceeds of eight hours' labour, or as the proceeds of twenty-four hours' labour less expenditure of sixteen hours consumed by leisure. Barone's simple book-keeping artifice of 1908 deftly does away with the power imbalance between worker and employer in setting the hours of work and ignores any differential in rates of pay that result from productivity loss accompanying fatigue and unrest. Remember Marx devoted a chapter a chapter in Capital exclusively to working time and much of his analysis hinged on it. Sir Sydney Chapman presented a marginalist theory of the hours of labour in 1909 that suggests that under competitive conditions the hours of work will usually exceed those that are optimal both from the standpoint of worker welfare and from output. The most egregious aspect of Barone's simple book-keeping artifice is that it blythely assumes there are no long term health or working capacity consequences from overwork or that overwork can't occur. This is one of those assumptions like there is no such thing as involuntary unemployment even when it is deliberate government policy to induce higher unemployment levels as a check against wage inflation. What is it exactly about Barone's simple book-keeping artifice that makes Bergson's social welfare function virtually impossible to refute? The Sandwichman __ Post your free ad now! http://personals.yahoo.ca Robert Scott Gassler Professor of Economics Vesalius College of the Vrije Universiteit Brussel Pleinlaan 2 B-1050 Brussels Belgium 32.2.629.27.15
Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
On 5/10/05, Robert Scott Gassler [EMAIL PROTECTED] wrote: ... If you argue that a particular economy should have a particular W, you are talking about a normative social welfare function. If you assume a particular form for it, you are neoclassical, or linear, or egalitarian, or Rawlsian, or whatever. A Marxist would place heavier emphasis on the u's of the workers than a neoliberal. If alpha1 were freedom [of business from certain government controls] and alpha2 equality of income distribution, then a Marxist would care more about the latter than the former, and a neoliberal would be the opposite. It is hard to refute because it is a notation or general logical formulation, not a political point of view. though I hardly think there are many Marxists who would bother with it. on the last point, absolutely right. Marxism rejects utilitarianism in general, since there's a distiction between what people want (utility, preferences, felt needs) and human psychological, physical, and social health (objective needs, societal collective self-realization). -- Jim Devine [EMAIL PROTECTED] http://myweb.lmu.edu/jdevine
Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
On 5/10/05, Robert Scott Gassler [EMAIL PROTECTED] wrote: It is hard to refute because it is a notation or general logical formulation, not a political point of view. though I hardly think there are many Marxists who would bother with it. I think you're right. And I think that you're right in saying that the general formulation allows for radical critics of capitalism to interject their own specification of the function. However, the general definition of a welfare function is not all there is to it. The point of having a welfare function is to be able to analyze social decision making in abstract models of society that resemble concrete historical societies as much as tractable. For that, you need -- inter alia -- the welfare function to have some basic properties. So not all welfare functions qualify. For example, you need it to allow for consistent choices. If a welfare function doesn't allow for some consistency, then you can derive all social choices from it, including mutually contradictory ones. Thus Arrow's emphasis on something akin to transitivity, which he found impossible to attain under what he believed were fairly reasonable axioms. I asked you about Bergson's paper because his reformulation was written prior to Arrow's 1951 book. Hope you can find the Samuelson reference. Thanks, Julio
Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
--- Robert Scott Gassler wrote: I don't recall Bergson borrowing anything about hours of labor to construct a social welfare function. He did, because that's where I first heard about Barone. The point of using Barone's sleight of hand is so that leisure could be treated as a commodity exactly the same as any other commodity. Perhaps the paradox of doing so will become plainer if we think of leisure as the counterpart to labour time, which in Marx's analysis is a commodity _unlike_ any other commodity. If labour time's use value is the production of values greater than its exchange value, then why shouldn't we suppose that leisure time possesses that same unique characteristic of having a use value that potentially exceeds its exchange value? After all, leisure time is latent labour time and vice versa. It might be a useful exercise to elaborate a leisure theory of value to see where that takes us. Walter Benjamin anecdotally anticipated such a theory with his comments about the 19th century Parisian flaneur (which, by the way, is the character I play as a Work Less Party candidate in the provincial elections): The number of work hours socially necessary for the production of his [the flaneur's] particular working energy is, in fact, relatively high; insofar as he makes it his business to let his hours of leisure on the boulevard appear as part of his work time, he multiples the latter and thereby the value of his own labor. (Arcades Project, p.446) The Sandwichman __ Post your free ad now! http://personals.yahoo.ca
Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
Jim, I'm afraid you're tying yourself up in knots countering an argument nobody made: substituting the GPI for the GDP. All that I'm talking about is an exercise that highlights the abstract nature of a productivity that is unconcerned with the questions of what use? and for whom? The exercise is good for more than fun and illustration. It is also good for correcting a misconception that GDP measures something it doesn't: social wellbeing. Are you suggesting that capital will go on strike if people so much as think critically in terms other than exchange values? Well, in that case, the only principled thing to do is to so think. And at every opportunity. The Sandwichman --- Jim Devine wrote: On 5/8/05, tom walker wrote: ... What would productivity change look like if we used a Genuine Progress Indicator rather than the GDP as the surrogate? I'm a fan of the GPI, but I don't see it as a substitute for the GDP. Whereas the GDP is a measure of exchange-value, the GPI is an effort to measure social use-value. These aren't commensurable, even though the folks at Redefining Progress add up the GPI using inflation-corrected dollars. This aggregation is a useful exercise, for fun and illustration, but strictly speaking you can't add use-values. There's clearly a contradiction between use-value and exchange-value, as some old hairy German was wont to note. If one takes the GPI quantification seriously, that contradiction is suggested by the fall of GPI relative to GDP since the 1970s. The US economy isn't doing a very good job at serving human needs (no surprise) even though it's pretty good at producing GDP. But capitalism runs on exchange-value, not use-value. What's important to the powers that be, in other words, is GDP. And if the economy were good at producing use-values, it would be a fall in exchange-value (and surplus-value) that would lead to a capital strike. JD __ Post your free ad now! http://personals.yahoo.ca
Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
tom walker wrote: I'm afraid you're tying yourself up in knots countering an argument nobody made: substituting the GPI for the GDP. All that I'm talking about is an exercise that highlights the abstract nature of a productivity that is unconcerned with the questions of what use? and for whom? You could even mark down the productivity cheerleaders' claims using net, rather than gross, output. But consider that a quarter of the productivity acceleration in the US since the mid-90s is the result of Wal-Mart and its imitators transforming retail - the result not of more! and better! but of relentless cheapening. Doug
Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
Tom W writes: It is also good for correcting a misconception that GDP measures something it doesn't: social wellbeing. who on pen-l suffers from this misconception? Are you suggesting that capital will go on strike if people so much as think critically in terms other than exchange values? no. But if the government started using the GPI (or similar) to measure the economy's success, it wouldn't last -- unless there were a mass movement to back it up. JD
Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
Jim Devine wrote: But if the government started using the GPI (or similar) to measure the economy's success, it wouldn't last -- unless there were a mass movement to back it up. It would also be really really hard to calculate. There are enough imputations already in the NIPAs (take a look at http://bea.gov/bea/dn/nipaweb/TableView.asp?SelectedTable=299FirstYear=2002LastYear=2003Freq=Year for a list). Something like the GPI would make this effort look like physics. Doug
Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
One of the problems with a GPI-type measure is that it assumes that there's a social welfare function, something that economists have shown cannot exist (though they then go on to use it or similar, implicitly or explicitly). The only way I know to aggregate preferences is through democracy, not by adding things up using fixed weights (or whatever). But if the government started using the GPI (or similar) to measure the economy's success, it wouldn't last -- unless there were a mass movement to back it up. It would also be really really hard to calculate. There are enough imputations already in the NIPAs Doug -- Jim Devine [EMAIL PROTECTED] http://myweb.lmu.edu/jdevine
Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
Are you referring to the Arrow impossibility theorem? Samuelson says that the theorem does not refer to a social-welfare function but to a voting rule. If you go back to the original Bergson article (written under the pseudonym Burke), you find the social welfare function formulated in a way that makes it virtually impossible to refute. Or to measure. The main point about GNP or GDP is that it is supposed to be a measure of how much junk is produced. Like the horizontal axis in the widget market, its units of measure are things. For happiness or well-being -- or survival -- you need another variable or two. Or ten. At 17:39 9/05/05, you wrote: One of the problems with a GPI-type measure is that it assumes that there's a social welfare function, something that economists have shown cannot exist (though they then go on to use it or similar, implicitly or explicitly). The only way I know to aggregate preferences is through democracy, not by adding things up using fixed weights (or whatever). But if the government started using the GPI (or similar) to measure the economy's success, it wouldn't last -- unless there were a mass movement to back it up. It would also be really really hard to calculate. There are enough imputations already in the NIPAs Doug -- Jim Devine [EMAIL PROTECTED] http://myweb.lmu.edu/jdevine Robert Scott Gassler Professor of Economics Vesalius College of the Vrije Universiteit Brussel Pleinlaan 2 B-1050 Brussels Belgium 32.2.629.27.15
Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
On 5/9/05, Robert Scott Gassler [EMAIL PROTECTED] wrote: Are you referring to the Arrow impossibility theorem? there are all sorts of arguments against social welfare functions. The main point about GNP or GDP is that it is supposed to be a measure of how much junk is produced. Like the horizontal axis in the widget market, its units of measure are things. For happiness or well-being -- or survival -- you need another variable or two. Or ten. it's not how much junk is produced -- it's how much is sold (or is assumed to be sold, as with the imputed rent on owner-occupied housing). exactly. It should take ten -- or fifty -- or a thousand -- dimensions to measure the production of happiness. -- Jim Devine [EMAIL PROTECTED] http://myweb.lmu.edu/jdevine
Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
I don't think he talks about the "production" of happiness, but in his new book, Happiness, Richard Layard asserts that happiness is a scalar and can be measured. Or something like measured. Quite an interesting book. Gene Coyle Jim Devine wrote: On 5/9/05, Robert Scott Gassler [EMAIL PROTECTED] wrote: Are you referring to the Arrow impossibility theorem? there are all sorts of arguments against social welfare functions. The main point about GNP or GDP is that it is supposed to be a measure of how much junk is produced. Like the horizontal axis in the widget market, its units of measure are things. For happiness or well-being -- or survival -- you need another variable or two. Or ten. it's not how much junk is produced -- it's how much is sold (or is assumed to be sold, as with the imputed rent on owner-occupied housing). exactly. It should take ten -- or fifty -- or a thousand -- dimensions to measure the production of "happiness."
Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
Eugene Coyle wrote: I don't think he talks about the production of happiness, but in his new book, Happiness, Richard Layard asserts that happiness is a scalar and can be measured. Or something like measured. Quite an interesting It does seem unlikely that happiness can be measured -- or even the full preconditions of happiness. But wouldn't it be possible, at least in principle, to identify some of a core group of preconditions which could be sloppily measured. For example: Given the standard diet items in a given society at a given time, could one measure the quantity per person necessary as a reasonable precondition for happiness. This would not be the same as nutritional necessity as it would have to incorporate some margin of pure waste, on the grounds that happiness becomes at the very least difficult if one hast to give too much of one's time and thought to balancing food against other needs. Something like that. Just doodling I guess. Carrol
Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
Layard doesn't do anything like this, but he does assert findings that, across countries, with a certain minimum level of income per capita, happiness is independent of income per capita. Gene. Carrol Cox wrote: Eugene Coyle wrote: I don't think he talks about the "production" of happiness, but in his new book, Happiness, Richard Layard asserts that happiness is a scalar and can be measured. Or something like measured. Quite an interesting It does seem unlikely that happiness can be measured -- or even the full preconditions of happiness. But wouldn't it be possible, at least in principle, to identify some of a core group of preconditions which could be sloppily measured. For example: Given the standard diet items in a given society at a given time, could one measure the quantity per person necessary as a reasonable precondition for happiness. This would not be the same as nutritional necessity as it would have to incorporate some margin of pure waste, on the grounds that happiness becomes at the very least difficult if one hast to give too much of one's time and thought to balancing food against other needs. Something like that. Just doodling I guess. Carrol
Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
There's a whole literature on measuring happiness using polling data (indicating that up to a point, increases in GDP-defined income raises happiness, but then it levels off, among other things). But people are too complicated for such exercises. The only system that reduces everything to a single dimension is capitalism (or commodity production in general). Eugene Coyle wrote: I don't think he talks about the production of happiness, but in his new book, Happiness, Richard Layard asserts that happiness is a scalar and can be measured. Or something like measured. Quite an interesting book. -- Jim Devine [EMAIL PROTECTED] http://myweb.lmu.edu/jdevine
Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
I think it is already difficult enough to measure some kind of satisfaction. To think to be able to measure happiness appears to me to be a good measure of madness! Massimo Portolani Eugene Coyle wrote: I don't think he talks about the production of happiness, but in his new book, Happiness, Richard Layard asserts that happiness is a scalar and can be measured. Or something like measured. Quite an interesting book. Gene Coyle Jim Devine wrote: On 5/9/05, Robert Scott Gassler [EMAIL PROTECTED] wrote: Are you referring to the Arrow impossibility theorem? there are all sorts of arguments against social welfare functions. The main point about GNP or GDP is that it is supposed to be a measure of how much junk is produced. Like the horizontal axis in the widget market, its units of measure are things. For happiness or well-being -- or survival -- you need another variable or two. Or ten. it's not how much junk is produced -- it's how much is sold (or is assumed to be sold, as with the imputed rent on owner-occupied housing). exactly. It should take ten -- or fifty -- or a thousand -- dimensions to measure the production of happiness.
Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
Robert Scott Gassler wrote: The main point about GNP or GDP is that it is supposed to be a measure of how much junk is produced. And my point would be that the GDP doesn't even measure that. You could produce less junk and still have the GDP go up with medical costs, police and incarceration costs, advertising, higher extraction costs for scarcer natural resources and so on. The GDP, by virtue of its high visibility, introduces a sort of political moral hazard into public accounts. It would be political suicide for a government to do good things that incidentally shrunk the GDP. Look at what happened to Jimmy Carter for just musing about the malaise. As a matter of fact, I think malaise would be a good name for the moral hazard that the GDP engenders. The Sandwichman __ Post your free ad now! http://personals.yahoo.ca
Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
As a matter of fact, I think malaise would be a good name for the moral hazard that the GDP engenders. not nausea? -- Jim Devine [EMAIL PROTECTED] http://myweb.lmu.edu/jdevine
Re: [PEN-L] GPI vs. GDP (was Re: [PEN-L] Productivity question)
Robert Scott Gassler wrote: If you go back to the original Bergson article (written under the pseudonym Burke), you find the social welfare function formulated in a way that makes it virtually impossible to refute. It has been my contention that a key assumption Bergson adopted from Barone make it not only possible, but necessary to refute. Here's how Barone dealt with the immensely important and tricky issue of the hours of labour: It is convenient to suppose -- it is a simple book-keeping artifice, so to speak -- that each individual sells the services of all his capital and re-purchases afterwards the part he consumes directly. For example, A, for eight hours of work of a particular kind which he supplies, receives a certain remuneration at an hourly rate. It is a matter of indifference whether we enter A's receipts as the proceeds of eight hours' labour, or as the proceeds of twenty-four hours' labour less expenditure of sixteen hours consumed by leisure. Barone's simple book-keeping artifice of 1908 deftly does away with the power imbalance between worker and employer in setting the hours of work and ignores any differential in rates of pay that result from productivity loss accompanying fatigue and unrest. Remember Marx devoted a chapter a chapter in Capital exclusively to working time and much of his analysis hinged on it. Sir Sydney Chapman presented a marginalist theory of the hours of labour in 1909 that suggests that under competitive conditions the hours of work will usually exceed those that are optimal both from the standpoint of worker welfare and from output. The most egregious aspect of Barone's simple book-keeping artifice is that it blythely assumes there are no long term health or working capacity consequences from overwork or that overwork can't occur. This is one of those assumptions like there is no such thing as involuntary unemployment even when it is deliberate government policy to induce higher unemployment levels as a check against wage inflation. What is it exactly about Barone's simple book-keeping artifice that makes Bergson's social welfare function virtually impossible to refute? The Sandwichman __ Post your free ad now! http://personals.yahoo.ca
