Jurriaan Bendien wrote:
> Today’s Left is anti-growth, but I am pro-growth. The Left is against
> measurement of economic growth, I am for measurement of economic growth. So
> really I don’t have much in common with the Left anymore in that regard. I
> am a bit oldfashioned I guess. I believe that if you want to distribute
> goods, you have to produce them first, and you have to earn what you
> consume.
Shane Mage wrote:
> If you want to "measure economic growth" you first have to define growth.
> GDP is in no way a measure of growth because it is a GROSS measure that
> includes elements that constitute *negative* growth like depreciation of
> useful objects and emergency repair of catastrophic damages (oil spills,
> hurricanes, tornadoes, etc.) Growth can only be measured on a NET basis, and
> that means accounting for the change in the stock of preconditions for
> economic production--which includes not only, not even mainly, the stock of
> productive assets ("physical capital"). What is crucial is the
> environmental and resource base. Consumption of any resource (soil, water,
> minerals) is negative growth that is to be deducted from measured physical
> output. And environmental damage (the CO2 buildup, for instance) of all
> sorts is likewise, perhaps even to a much greater greater extent, negative
> growth. Official National Accounts statistics purporting to measure net
> output exclude all these crucial factors (except the trivial case of claimed
> depreciation of privately-owned capital assets) and so are completely
> useless as measures of economic growth. What they measure is economic
> activity, much of which is either useless or destructive.
>
> The left is pro-growth--it just conceives growth accurately, in direct
> contrast to official standards.
Shane is right. The "old-fashioned" or official passion for "economic
growth" involves growing real GDP, which is only a measure of (new)
output sold through markets. To worship this kind of growth is to
worship markets and how they value goods and services. That's fine if
all you care about is employment, since there's a direct connection
between GDP growth and employment (Okun's Law). But GDP can include a
multitude of sins (poison gas production, etc.)
In contrast, we might measure growth by increases in the Genuine
Progress Indicator (for example) which would be something like GDP
minus those non-market costs (like those of pollution and the
depletion of non-renewable resources) which should be treated as costs
and subtracted from GDP (but aren't) plus those non-market benefits
(such as the time that parents use to take care of their children)
which should be treated as benefits and added to GDP (but aren't). The
GPI is also adjusted (downward) for increases in the inequality of
distribution.
The big problem with the GPI is that they use market prices to add and
subtract components, but it's a useful alternative to GDP.
--
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
