I don't have any deep background in econ, but do we not need to switch from talking about GDP to talking about a version of Net Domestic Product where "net" includes:
- changes to the value of natural and ecosystem resources (e.g. if I clear a forest to sell timber, we must acknowledge some lost value for the forest)
- amount of economic transactions in service of mitigating problems created by externalities from other activity (e.g. if my pollution gets into your groundwater, you paying to remediate the pollution isn't "value created")
I.e. growth of _actual net value_ still sounds like a good thing to pursue but we let our politicians run around doing anything to maximize GDP without talking about what the "gross" is hiding.
Also this isn't only a gap about environmental issues.
If you pay X for child daycare and work but only make X+taxes, and have a dumb pointless job, GDP says the economy is at least 2X+tax larger than if you took care of your own child during the day (bc your employer paid you and you paid your daycare). This seems dumb at an accounting level, even before we consider that you probably get a greater emotional benefit from being with your child than does the daycare worker.
On the corporate scale, see the whole carbon / ESG / impact measure ent industry. Lifecycle Analysis, supply chain extrapolation, Bill of Materials analysis.
You only get some relatively crude estimate and a lot of missing data points, whereas economic growth can conveniently assign a dollar value on everything.
It's kind of an accounting problem. What you really want is human happiness and abundant nature but doing some gardening and playing with the kids may produce happiness but no GDP whereas enlarging a chemicals plant to make even larger SUVs gives much GDP.
Trouble is it's hard to account for that kind of stuff but maybe we could make a flawed but functional accounting thing with AI?
When I was a child, I was spending my summers at my grandparents.
They had a cozy house in the village.
They worked the land, they had a few animals.
They grew their food.
They sold some wine and fruit at the market.
They had a big house, land, clean air, clean water and they were healthy.
They celebrated the holidays, had many friends, went to church, weddings, funerals, etc.
Villagers always greeted them and stopped for a quick chat when they met on the street.
Now compare with life in a big modern city.
I design complicated distributed systems using AI in order to provide shelter and food for myself. Those are tools which other people use to achieve their goal of providing shelter and food for themselves.
Tons of cars, the air is polluted, constant noise, fake bling, restaurants selling food at 20x price, stressed, depressed, lonely people.
Each in their own digital rabbit hole on their phones all the time.
Smiles for money only.
I'm really struggling to understand what we've grown into and why this rat race is considered 'better' than what people have had for millennia without destroying nature in the process.
> European Union members have signed off on a report that warns focusing on unchecked economic growth is contributing to the destruction of global biodiversity
It would be good to know which members of the EU are currently experiencing unchecked economic growth.
My old cynic, grumpy mind can't see this as anything but virtue signaling. I would be overjoyed to be wrong.
One corner stone of the EU is the 4 freedoms[0] that among other things denies public institutions the ability to look at anything besides the monetary cost when deciding who to contract for anything.
And as JIT[1] no longer only applies to goods but also to people noone has people working for them anymore, but contract everything out.
Obviously I haven't read the report/document so maybe there are some political steps that the signees are binding themselves to take towards a non-growth-at-all-cost system but I really doubt it.
Degrowthism is one of the dominant ideologies of our time. I think it's wrong: economic growth is good, it has made our lives much better, and we should continue to prioritize it.
One important detail about % growth is that it compounds. So small differences in growth today can make a huge difference 50 years from now.
The world I want to live in is one that prioritizes protecting the environment but also aggressively pursues new technology and growth. Our descendants will thank us.
If we can't answer that question then we can't really judge our actions effectively. If we view humanity as the most intelligent life form not just on the planet, but in the entire universe, then we are the only source of order in an infinite chaos. All of reality is just entropy and mindless cruelty except for humanity.
Viewed in that lens we almost have a duty to expand before some cosmic event obliterates us. Granted we are expanding in a moronic way and our goal seems to be to make plastic trash for people to mindlessly run through, but still, It would be nice if politicians occasionally stepped back from the narrow view and thought about what was at stake.
Folks, "Limits to Growth" was published _over fifty years ago_ (https://www.clubofrome.org/ltg50/) and revisited repeatedly since, each time in so doing effectively confirming their worst-case hypotheses.
But we've been able to take a highly systems thinking-inflected, as quantitative as possible approach to looking over how human's current perspective of what "growth" means and applying it over time to the resources of the planet we live on, and conclude with decent confidence and error bars that it's not just unsustainable, but that we're past the point of overconsumption and will have a very uncomfortable "correction", and we've been able to indicate that for decades.
This ignores innovation, which drastically reduces externalities over time (as it has historically; see smog and pollution from England Industrial revolution). Granted that can benefit or even require investment from the State to expedite things. R&D spending was better in the 20th century. At any rate you cannot divorce said innovation from growth and consumption.
By contrast, "degrowth" would inflict harm and make it impossible for developing countries to improve their quality of life. People aren't immigrating to the U.S. for the healthcare. We can easily qualify why it represents a "better life": houses, vehicles, abundance of food, goods and conveniences, public infrastructure and services, etc.
Global population growth rate for it's part is poised to stagnate. There's no question of "infinite growth", nor is it relied upon.
This ship has sailed. The environment is destined to be destroyed sooner or later. It's just not at this generation so hardly anybody in charge is worried. Except the growth problem that cannot be solved, inequality is another fact. Sure I pollute with my yearly 10MWh of home heating + 10 for my car, but someone pollutes in multiple times that with his yacht and jet. Let's start by converting him before we all revert back to middle ages.
I do not know how policymakers should act on that if poor people want to consume like the rich ones and rich people do not want to give up even an inch of their wealth.
I would argue that actually political corruption is destroying nature because there would not be an obsession with growth if executives did not have so much leverage to make workers desperate for jobs because they're so underpaid.
I think the main quote from the article is important but the headline misses the point:
>> Markets are failing to adequately price or value biodiversity, such as filtration of pollutants, climate regulation and pollination.
It doesn't seem immediately obvious to me that growth rate of GDP is a direct proxy for this fact. How is GDP growth rate is a consequence of this or vice versa, rather than a second or third order effect?
I think plenty of people agree that an open and fair market also tries to price in externalities, especially ones that could end all life on the planet.
230 comments
- changes to the value of natural and ecosystem resources (e.g. if I clear a forest to sell timber, we must acknowledge some lost value for the forest)
- amount of economic transactions in service of mitigating problems created by externalities from other activity (e.g. if my pollution gets into your groundwater, you paying to remediate the pollution isn't "value created")
I.e. growth of _actual net value_ still sounds like a good thing to pursue but we let our politicians run around doing anything to maximize GDP without talking about what the "gross" is hiding.
They’re measuring money generated for shareholders, they’re measuring tax base.
On the corporate scale, see the whole carbon / ESG / impact measure ent industry. Lifecycle Analysis, supply chain extrapolation, Bill of Materials analysis.
You only get some relatively crude estimate and a lot of missing data points, whereas economic growth can conveniently assign a dollar value on everything.
I think it only gets worse as you scale up.
Trouble is it's hard to account for that kind of stuff but maybe we could make a flawed but functional accounting thing with AI?
In better times, perhaps we have the collective will to try.
They had a big house, land, clean air, clean water and they were healthy. They celebrated the holidays, had many friends, went to church, weddings, funerals, etc. Villagers always greeted them and stopped for a quick chat when they met on the street.
Now compare with life in a big modern city.
I design complicated distributed systems using AI in order to provide shelter and food for myself. Those are tools which other people use to achieve their goal of providing shelter and food for themselves.
Tons of cars, the air is polluted, constant noise, fake bling, restaurants selling food at 20x price, stressed, depressed, lonely people. Each in their own digital rabbit hole on their phones all the time. Smiles for money only.
I'm really struggling to understand what we've grown into and why this rat race is considered 'better' than what people have had for millennia without destroying nature in the process.
> European Union members have signed off on a report that warns focusing on unchecked economic growth is contributing to the destruction of global biodiversity
It would be good to know which members of the EU are currently experiencing unchecked economic growth.
My old cynic, grumpy mind can't see this as anything but virtue signaling. I would be overjoyed to be wrong.
One corner stone of the EU is the 4 freedoms[0] that among other things denies public institutions the ability to look at anything besides the monetary cost when deciding who to contract for anything.
And as JIT[1] no longer only applies to goods but also to people noone has people working for them anymore, but contract everything out.
Obviously I haven't read the report/document so maybe there are some political steps that the signees are binding themselves to take towards a non-growth-at-all-cost system but I really doubt it.
-----
[0] https://en.wikipedia.org/wiki/European_Single_Market
[1] https://en.wikipedia.org/wiki/Lean_manufacturing
One important detail about % growth is that it compounds. So small differences in growth today can make a huge difference 50 years from now.
The world I want to live in is one that prioritizes protecting the environment but also aggressively pursues new technology and growth. Our descendants will thank us.
If we can't answer that question then we can't really judge our actions effectively. If we view humanity as the most intelligent life form not just on the planet, but in the entire universe, then we are the only source of order in an infinite chaos. All of reality is just entropy and mindless cruelty except for humanity.
Viewed in that lens we almost have a duty to expand before some cosmic event obliterates us. Granted we are expanding in a moronic way and our goal seems to be to make plastic trash for people to mindlessly run through, but still, It would be nice if politicians occasionally stepped back from the narrow view and thought about what was at stake.
Yes, their website is...unconvincing. Which is poetic in its own way. Wikipedia's take on the original report at https://en.wikipedia.org/wiki/The_Limits_to_Growth is probably a better read.
But we've been able to take a highly systems thinking-inflected, as quantitative as possible approach to looking over how human's current perspective of what "growth" means and applying it over time to the resources of the planet we live on, and conclude with decent confidence and error bars that it's not just unsustainable, but that we're past the point of overconsumption and will have a very uncomfortable "correction", and we've been able to indicate that for decades.
By contrast, "degrowth" would inflict harm and make it impossible for developing countries to improve their quality of life. People aren't immigrating to the U.S. for the healthcare. We can easily qualify why it represents a "better life": houses, vehicles, abundance of food, goods and conveniences, public infrastructure and services, etc.
Global population growth rate for it's part is poised to stagnate. There's no question of "infinite growth", nor is it relied upon.
One solution to our social maladies is a kind totalitarian dictator with total surveillance.
>> Markets are failing to adequately price or value biodiversity, such as filtration of pollutants, climate regulation and pollination.
It doesn't seem immediately obvious to me that growth rate of GDP is a direct proxy for this fact. How is GDP growth rate is a consequence of this or vice versa, rather than a second or third order effect?
I think plenty of people agree that an open and fair market also tries to price in externalities, especially ones that could end all life on the planet.