raghu wrote: > Picking up on that theme, I am thinking of a very specific and > well-defined interpretation of 'riches': GDP growth. Afterall all the > fuss about the credit crunch recently is because of the universal fear > of a recession - defined as a lack of GDP growth. My question is who > cares if GDP decreases? It is just a number.
GDP isn't just a number. It's an effort to measure a capitalist success -- from a capitalist perspective. That's why it (by and large) measures only market benefits and market costs (to subtract from the benefits). In classical or Marxian terms, nominal (current-dollar) GDP measures aggregate exchange-value. > Bad things like unemployment happen not because of recession, but how > everyone responds to it. In a recession, firms mostly respond to the collapse of the demand of their own products, while people mostly respond to losing their jobs. These individual processes are (more or less) summarized by GDP statistics. > Won't a recession actually be a good thing > (for the environment etc) if the decrease in GDP comes from the > incomes of the rich rather than the poor? all else constant, a fall in GDP is good for the environment, just as the decline of US-based steel production improved the air in Gary, IN and Pittsburgh, PA. (Of course the job situations in those places went to Hell.) But it's hard to imagine a capitalist economy in which "the decrease in GDP comes from the incomes of the rich rather than the poor." If the share of profit in total income and thus the rate of profit fall, that almost always depresses fixed investment spending and leads to a general decline in the economy. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante.
