No, your pessimism is too optimistic, Jim. It is not meaningful any longer to talk in terms of potential or sub-potential GDP. The numbers can be made by other than rational means. As I said, the metric is broken. It became too much an index of success to remain an objective measurement of anything. The bottom line is there is no bottom line there. One ton nails to meet the quota... Enron was symptomatic of a characteristic of the system. This is not a problem that can be ironed out by putting a squeeze on workers' living standards. When the food is unfit to eat, it doesn't rectify things to serve larger portions.
On Fri, Mar 13, 2009 at 7:01 PM, Jim Devine <[email protected]> wrote: > Sandwichman wrote: > > You are absolutely right about the linkage between economic growth and > > government revenues! There is a built-in incentive for the government to > > pursue growth policies, regardless of whether they are appropriate for > the > > national welfare. The limiting case may well be where the growth leads to > a > > systemic environmental collapse that itself makes further growth > > impossible... > > Right. Capitalists also benefit in a big way from GDP-growth: without > it, surplus-value can't be realized. Naturally enough, the capitalists > and the state work together hand in glove, with the capitalists being > the "hand," one that's not very invisible. > > > Now my obvious preference would be to take precautionary action before > the > > collapse occurs. The other option is to simply assume it won't happen. > For > > example, "there is no housing bubble," and then innocently ask, when and > if > > it occurs, "WHO could have foreseen this?" Well, the answer to that > question > > is: certainly not those who couldn't foresee the housing bubble. > > right. > > > Anyway, I am becoming convinced that sustained growth is not an option. > > Expansionary fiscal policy might even take us to the brink of "robust and > > sustained economic expansion" but at that point the stimulus will have to > be > > curtailed because of the inflationary effects of "pump-priming the boom." > > That point will come long before full employment is within sight. > > It's good to separate the demand-side from the supply-side version of > "growth." It is quite likely that the supply side type of growth _is_ > unsustainable (at least when measured by potential real GDP). The > long-lasting kind of demand-side growth that goes in step with that > supply growth is thus also unsustainable. > > On the other hand, the movement toward full employment of resources > (which is driven by demand-side growth) means greater efficiency of > the utilization of resources. Currently, we have have an increasing > number of people whose work-hours per year have been involuntarily > restricted -- and are being restricted -- by falling aggregate demand. > Their efforts are simply being wasted; they're not working to fix the > environmental mess, for example. > > Further, their situation is making them less and less discriminating > about where the jobs are going to come from. Sub-potential GDP may > provide a lot of environmental benefits (as factories are shuttered, > etc.) but it progressively creates a political push for "jobs, not the > environment, full speed ahead!" attitudes. Because almost all of us > are dependent on jobs for our livelihoods, we may see shouts of "Feed > the poor with spotted owls!" rather than "eat the rich!" > > Given the balance of political power, the kind of demand growth that's > needed to end this kind of gross inefficiency will likely be the kind > that makes isn't environmentally sustainable. But in theory, at least, > the growth of GDP up to potential would create an efficiency > "dividend" that could be spent on pro-environmental stuff. (Below full > employment, there _can_ be a "free lunch.) At least up to full > employment, the fight should not be against growth but instead for > using the dividend to help both those in need and the natural > environment. > > It's politically problematic, yes, but there are no simple slogans > that will solve the problem. > -- > Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own > way and let people talk.) -- Karl, paraphrasing Dante. > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > -- Sandwichman
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