Externality is, by and large, the neoclassical euphemism for primitive accumulation. Joan Martinez-Alier has pointed out that “Externalities are not so much market failures as cost-shifting ‘successes’.”
I was paraphrasing J.M.-A. when I wrote, "For apostles of growth, double counting is not so much a social accounting debacle as it is a public relations triumph." An example of where double counting errors take place is in college/university education. Depending on the student's motivation and subjective experience, advanced education may be either a final consumption good or an investment in credentials for getting a job or a combination of both. Expenditures on education are counted in the GDP as final consumption. But to the extent that education is a credentialing exercise, it would best be considered an intermediate good. Why? Because over a lifetime the employee will receive a wage premium as a consequence of possessing the credential. That wage premium will be counted as income in the national accounts without a deduction for the cost of obtaining the credential. The education thus gets counted twice. Once as consumption by the student and a second time as a wage premium by the former student. On Wed, Mar 20, 2013 at 10:56 AM, Jim Devine <[email protected]> wrote: > looking at (real) median household income deals with the inequality > issue (to some extent) but doesn't deal with non-market costs and > benefits. The Genuine Progress Indicator and the like try to bring > those in. > > Hinrich Kuhls wrote: > > It looks as if you are commenting on chapter VI (GDP and Beyond) of the > LSE > > Growth Commission 2013 Report: > > > > "A new focus on median household income would, we believe, influence > debates > > about growth policy. Median income growth has lagged behind GDP per > capita since > > the early 1980s, in part because of the growth of income inequality so > that > > average income has grown faster than the median. In the years running up > to the > > crisis, GDP per capita grew much faster than median household income, in > part > > because there was a significant increase in government spending on > health and > > education, which is reflected in GDP but not in income. The median is not > > perfect of course, because inequality can still widen at other parts of > the > > distribution, but it is better than ignoring distribution entirely and > it is > > easy to communicate to the public. > -- > 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 > -- Cheers, Tom Walker (Sandwichman)
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