It is time to stop quivering in our boots in pointless fear of the future and just roll up our sleeves and build it.
- Ray Pierrehumbert

Friday, September 4, 2015

Some tweets on the futility of growth

My tweets of this morning, slightly edited for legibility:

Literal growth in children is good while growth in adults is unhealthy.

Why is the case not similar in economies?

In speaking of growth people usually mean GDP.

Even if wealth mapped to well-being, which I doubt, GDP growth doesn't imply wealth increase.

If I sell you a chair for $30 on MWF and you buy it back for $30 on TuThSa, we have increased GDP by $180 that week and achieved nothing. No one is the wealthier.

If someone stops cooking at home and starts cooking similar meals at a restaurant which their family buys with the restaurant salary, GDP increases. But no one is the wealthier.

GDP measures effort, not result.

Increasing GDP would mean more employment, not necessarily better well-being, except now we have robots to do the work.

The sound historical reasons to connect meaningful work and income have broken down, and much "work" becomes meaningless and demeaning.

People need meaningful ways to spend their time and reliable ways to allocate resources. Tradition and history have coupled these needs. Nowadays, though, things which need doing and which people otherwise would do are left undone, because people must be employed in activities where there is a surplus, so they can allocate resources.

There are plenty of resources to go around. We are not struggling to create wealth, we are struggling to allocate it. It's maladaptive. People aren't starving because there isn't enough food available. There's plenty. People starve because they can't allocate any for themselves.

Also, The Impossible Hamster

5 comments:

Tom said...

If you don't like any of the economic metrics used for measuring growth there are many alternatives:

Lifespan
Maternal mortality
Infant mortality
Daily caloric consumption
Literacy rate

If you want to include economic measurements but don't like the ones currently used:

Years of life following retirement
Home ownership
Energy consumption
Size of inheritance

You'll find that most track GDP very closely, which is why it is commonly used.

Michael Tobis said...

I'm not saying it's a bad measure. I'm saying it's measuring the wrong thing.

Tom said...

What do you think should replace GDP as the metric of choice?

Michael Tobis said...

Optimizing for GDP does not optimize for well-being. Short term growth does map onto well-being, and that's the problem, because long-term growth now arguably (and I so argue) maps onto the reverse.

Measures of health, social cohesion, creativity, satisfaction are harder to come by. And optimization is a very valuable technique. But just because GDP is easy to measure doesn't automatically mean that GDP is the thing we should be optimizing.

However, insofar as allocation of wealth is tied to employment, the pressure to keep employment up is immense. Given that in the West we have plenty of stuff and that most of our employment is manipulation of symbols in one way or another with no real production of goods at the other end, we should reconsider this point most of all. The work ethic is the opposite of what we need. A conservation and relaxation ethic could save us.

What I'm arguing for is a universal guaranteed income, not means tested. I think employment would plummet, and salaries would probably increase a bit I think real productivity would hardly change at all.

Of course that wealth has to come from somewhere, but if you notice the pooling up of resources in a few families with enormous capital, I doubt they would face real hardship or stress in the event.

What should we optimize for? There have been attempts at well-being indices, and they show little if any progress in the West over the past few decades, but I haven't looked into it in any detail. It's hard to be sure the desired result wasn't baked into the metric in the first place, since it's promulgated by anti-growth academics.

A real well-being metric is hard, I admit, but the fact that we don't have a clear substitute for GDP doesn't mean GDP and employment maximization is appropriate for our present circumstances. I don't suggest that it wasn't valuable in the past. (Nor that it isn't still valuable in less developed countries though I'm not sure of that to be honest.)

I'm reminded of Einstein's quote about science "I have little patience with scientists who take a board of wood, look for its thinnest part, and drill a great number of holes where drilling is easy." I suggest that a similar intellectual laziness is misdirecting public policy.

Tom said...

I thought the Health and Human Development Index offered a decent alternative view.

http://www.who.int/trade/glossary/story053/en/