Growth is the be-all and end-all of mainstream economic and political thinking. Without a continually rising G.D.P., we’re told, we risk social instability, declining standards of living and pretty much any hope of progress. But what about the counterintuitive possibility that our current pursuit of growth, rabid as it is and causing such great ecological harm, might be incurring more costs than gains? That possibility — that prioritizing growth is ultimately a losing game — is one that the lauded economist Herman Daly has been exploring for more than 50 years. In so doing, he has developed arguments in favor of a steady-state economy, one that forgoes the insatiable and environmentally destructive hunger for growth, recognizes the physical limitations of our planet and instead seeks a sustainable economic and ecological equilibrium. “Growth is an idol of our present system,” says Daly, emeritus professor at the University of Maryland School of Public Policy, a former senior economist for the World Bank and, along with the likes of Greta Thunberg and Edward Snowden, a recipient of the prestigious Right Livelihood Award (often called the “alternative Nobel”). “Every politician is in favor of growth,” Daly, who is 84, continues, “and no one speaks against growth or in favor of steady state or leveling off. But I think it’s an elementary question to ask: Does growth ever become uneconomic?” …
There’s an obvious logic to your fundamental argument in favor of a steady-state economy, which is that the economy, like everything else on the planet, is subject to physical limitations and the laws of thermodynamics and as such can’t be expected to grow forever. What’s less obvious is how our society would function in a world where the economic pie stops growing. I’ve seen people like Peter Thiel, for example, say that without growth we would ultimately descend into violence.
To me that suggests a fairly limited and grim view of human possibility. Is your view of human nature and our willingness to peacefully share the pie just more hopeful than his? First, I’m not against growth of wealth. I think it’s better to be richer than to be poorer. The question is, Does growth, as currently practiced and measured, really increase wealth? Is it making us richer in any aggregate sense, or might it be increasing costs faster than benefits and making us poorer? Mainstream economists don’t have any answer to that. The reason they don’t have any answer to that is that they don’t measure costs. They only measure benefits. That’s what G.D.P. is.
There’s nothing subtracted from G.D.P. But the libertarian notion is logical. If you’re going to be a libertarian, then you can’t accept limits to growth. But limits to growth are there. I recall that Kenneth Boulding said there are two kinds of ethics. There’s a heroic ethic and then there’s an economic ethic. The economic ethic says: Wait a minute, there’s benefits and costs. Let’s weigh the two. We don’t want to charge right over the cliff. Let’s look at the margin. Are we getting better off or worse? The heroic ethic says: Hang the cost! Full speed ahead! Death or victory right now! Forward into growth! I guess that shows a faith that if we create too many problems in the present, the future will learn how to deal with it.
Do you have that faith? [Laughs.] No, I don’t.
Historically we think that economic growth leads to higher standards of living, lower death rates and so on. So don’t we have a moral obligation to pursue it? In ecological economics, we’ve tried to make a distinction between development and growth. When something grows, it gets bigger physically by accretion or assimilation of material. When something develops, it gets better in a qualitative sense. It doesn’t have to get bigger. An example of that is computers. You can do fantastic computations now with a small material base in the computer. That’s real development. And the art of living is not synonymous with “more stuff.” People occasionally glimpse this, and then we fall back into more, more, more.
But how would a country continue to raise its standard of living without growing its G.D.P.? It’s a false assumption to say that growth is increasing the standard of living in the present world because we measure growth as growth in G.D.P.
If it goes up, does that mean we’re increasing standard of living? We’ve said that it does, but we’ve left out all the costs of increasing G.D.P. We really don’t know that the standard is going up. If you subtract for the deaths and injuries caused by automobile accidents, chemical pollution, wildfires and many other costs induced by excessive growth, it’s not clear at all. Now what I just said is most true for richer countries. Certainly for some other country that’s struggling for subsistence then, by all means, G.D.P. growth increases welfare. They need economic growth. That means that the wealthy part of the world has to make ecological room for the poor to catch up to an acceptable standard of living. That means cutting back on per capita consumption, that we don’t hog all the resources for trivial consumption. …
If your comment does not go up the first time, it definitely will not go up the second time.
I look in the trash and spam to retrieve legitimate comments which end up there. If you are patient, I will approve it. If you post a note to the thread, I will look for it, approve it, delete your note or tell you it is not there. Too many links and long comments tend to end up in spam or trash.
Other than Ann, who else posts long winded comments (which is ok by me)? The vast majority (95% +) of the comments make it. You are a frequent visitor to the trash. Statically, the system works well. Again, you have no numbers.
What I posted that didn’t make it past moderation was an interview with an apparently conservative economist of some long tenure who presented only ideas, not numbers.
I disagree with his ideas, but I attempted to post a bit more than just the lead-in to the interview, to learn what others might have to say about them.
In this instance, what I posted the second time DID go up after the first attempt did not. There were editing problems with the first effort, due to vagaries of text coming from the NYT, so I tried a slightly different approach with a better result.
In my post above, the first portion is from the interviewer.
After “Is your view of human nature and our willingness to peacefully share the pie just more hopeful than his?”, the words are those of ‘lauded economist Herman Daly, emeritus professor’.
Entropy is a measure of the disorder in a closed system. According to the second law (of Thermodynamics), entropy in a system almost always increases over time …
There is no getting around this. Other than periodic catastrophic resets, at least as far as humanity is concerned. Malthus was right, although – with growth, technology, science, and sheer determination – it may not seem that way. This is an illusion. Party on dudes.
According to the second law (of Thermodynamics), entropy in a system almost always increases over time …
The above is a weak statement of the second law. More correctly, it reads
According to the second law (of Thermodynamics), entropy in a system always increases over time …
However, somewhat like the Uncertainty Principle, temporary exceptions, even lasting millennia, are permitted. Which is not the case with Uncertainty per se.
FWIW though, the universe itself may be considered a product of the Uncertainty Principle. In the end, there’s no such thing as a free lunch, however.
Congress should approve $52 billion in subsidies for the domestic semiconductor industry before it goes elsewhere.
There are some inputs that are so critical to the economy, so vital to national security, that the federal government has a special duty to nurture and protect them.
Computer chips are in that category. They run our cars and computers. Our smartphones and smart bombs. There is scarcely a consumer electronic device today that doesn’t include semiconductors.
When pandemic-related chip shortages shut down auto factories over the past couple of years and sent prices soaring, the whole world learned a painful lesson in the centrality of the silicon wafers.
As soon as Tuesday, the Senate could take up legislation that would pour $52 billion into chip research and incentives for building manufacturing plants in the United States. Lawmakers should approve the bill and get it to the president’s desk as soon as possible.
Big subsidies for a thriving industry can be difficult to swallow. But Congress really doesn’t have a choice. In China, Singapore, Taiwan, and Europe, governments are pouring massive sums into semiconductors. And if Washington doesn’t compete, the country’s shrinking share of semiconductor production could shrink even further. In 1990, 37 percent of the world’s chip-making capacity resided in the United States. Now it’s just 12 percent.
That’s a national security concern. Without a steady domestic supply of chips, our economy and our military prowess are put at real risk.
The House approved the semiconductor spending in February, tucking it into a larger package aimed at countering China’s growing economic and technological power. And the Senate passed a narrower version of the bill last year.
But the legislation has languished. And domestic manufacturers have put plans for new semiconductor plants on hold in places like Ohio and Texas while they wait on word from Congress. …
The above comment is not-so-vaguely related to the ‘Growth is so over-rated’ thread.
BTW, I posted another comment in that thread 0n the main AB page, with my take on what ‘Growth’ is about really (at least IMO), which still has not appeared there.
In 2008 and after, automotive shut down or drastically reduced production. Semiconductors are longer than normal lead time commodities. They did not bother to maintain their supply chain order by setting minimum inventory. The Tiers were not going to order more SCs without OEM orders. So everything shut down.
Starting up wafer plants and the fab plants again is not a short-term task. Automotive and other entities just flipped the switch and said; “where are my chips?” It is not the SC plants responsibility to maintain supply with no orders on hand. It is the user’s, the OEM’s responsibility. Automotive OEMs along with other industry OEMs did not do it in 2008. Here we are again with the same issue.
Semiconductor fab plants are hideously expensive to build, manufacturers have off-shored much of their capacity, foreign-owned corps (Taiwan, PRC, Korea) have built a lot on their own. And the US industry wants some guv’mint help, evidently.
First, Russia upended the world energy market, then searing temperatures drove up demand for energy, forcing some of the world’s largest economies to scramble to secure power for their citizens.
Deadly heat and Russia’s war in Ukraine are packing a brutal double punch, upending the global energy market and forcing some of the world’s largest economies into a desperate scramble to secure electricity for their citizens.
This week, Europe found itself in a nasty feedback loop as record temperatures sent electricity demand soaring but also forced the closure of nuclear power plants in the region because the extreme heat made it difficult to cool the reactors.
France on Tuesday detailed its plan to renationalize its electricity utility, EDF, to shore up the nation’s energy independence by refreshing its fleet of aging nuclear plants. Russia, which for decades has provided much of Europe’s natural gas, kept Europe guessing as to whether it will resume gas flows later this week through a key pipeline. Germany pushed the European Union to greenlight cheap loans for new gas projects, potentially prolonging its reliance on the fossil fuel for decades longer.
Europe is not alone in feeling the effects of energy turmoil on a hotter planet. China ordered factories to cut back electricity use as extreme temperatures melted roofs, cracked roads and drove people into underground air-raid shelters. India struggled to find coal for its power plants earlier this year during an unusually early and prolonged heat wave fueled by climate change.
The cascading effects of the war and the coronavirus pandemic on energy and food prices have punished the world’s poorest citizens the most. In Africa, 25 million more people were living without electricity now, compared with before the pandemic, the International Energy Agency estimated.
Meanwhile, in the United States, history’s largest emitter of greenhouse gas emissions, extreme temperatures scorched swathes of the South and West as prospects of national climate legislation collapsed in the nation’s capital. At the same time, global oil companies reported soaring profits as oil and gas prices shot up.
In effect, the world’s ability to slow down climate change has not only been undermined by the producers of the very fossil fuels that are responsible for climate change, but further challenged by deadly heat — a telltale marker of climate change. …
Warning of possible further disruptions to Russian fuel exports, including “a complete stop of Russian gas deliveries,” the European Commission is asking E.U. member states to adopt a strict energy consumption plan. The plan would need the backing of national governments to move forward.
To avoid energy shortages that would stall economic growth and leave households cold in the winter as Russia weaponizes its gas exports, European countries should immediately start rationing use of the fuel, the European Commission said on Wednesday, and cut their use 15 percent until next spring.
If the bloc’s 27 member countries agree to adopt the plan and the new legislation that goes with it, it would solidify the sense that Europe’s economy is on war footing because of Russia’s invasion of Ukraine. The proposal would grant the Commission, the bloc’s executive arm, powers to force member nations to follow a strict plan of energy consumption cuts as of this summer. …
Public opinion is split over whether supporting Ukraine is worth the sacrifice, with some people saying they are ready to take a bigger hit to keep up resistance to Russia and others saying the war would hurt them more than they are willing to accept.
Europeans, especially those living in the bloc’s wealthiest regions in the north and west, are among the world’s richest people on average, and are not accustomed to hardships like keeping houses cold in the winter. …
War and Warming Upend Global Energy Supplies and Amplify Suffering
First, Russia disrupted the energy market, then searing temperatures drove up demand, forcing some wealthy countries to scramble to secure power supplies.
The energy crisis has made it harder for emerging economies to shift to more sustainable forms of power.
Dismal science is a term coined by Scottish essayist and historian Thomas Carlyle to describe the discipline of economics. Dismal science is said to have been inspired by T. R. Malthus’ gloomy prediction that population would always grow faster than food, dooming mankind to unending poverty and hardship. …
Russia’s ambitions in Ukraine now stretch beyond the country’s eastern territories, the country’s foreign minister said Wednesday, a departure from the Kremlin’s earlier claims that it is not waging a war of imperial expansion.
Foreign Minister Sergey Lavrov told RIA Novosti, the Russian state news agency, that Russia’s territorial aims have changed to include a swath of the south as peace negotiations have failed and the situation on the ground has changed.
“This is an ongoing process,” said Mr. Lavrov, adding that Russia’s objectives could expand further if Western countries deliver more long-range weapons to Ukraine. …
Senior U.S. officials acknowledged Wednesday that the United States and its allies are considering whether to provide Ukraine with new fighter jets and the training needed to operate them, a move that would dramatically expand Western involvement in the war with Russia.
Gen. Charles Q. Brown Jr., chief of staff of the U.S. Air Force, said that although he would not speculate what type of aircraft might be transferred, discussions are ongoing about how to reinforce Ukraine’s fleet, including with new planes. …
Brown said there are several possibilities, including American-made fighters or some made in Europe. Options include the Gripen fighter made in Sweden, the Rafale made in France, and the Eurofighter Typhoon, which is built by a consortium of companies in several countries. …
Bipartisan Senate Group Reaches Deal to Rewrite Electoral Count Act
The senators proposed a bill that would modernize the 135-year-old act, aiming to change a law that former President Trump tried to use to overturn the election.
They lack the 10 Republicans needed to make it past a filibuster, but hope to round up sufficient backing for a vote later this year.
A bipartisan group of senators proposed new legislation on Wednesday to modernize the 135-year-old Electoral Count Act, working to overhaul a law that President Donald J. Trump tried to abuse on Jan. 6, 2021, to interfere with Congress’s certification of his election defeat.
The legislation aims to guarantee a peaceful transition from one president to the next, after the Jan. 6 attack on the Capitol demonstrated how the current law could be manipulated to disrupt the process. One measure would make it more difficult for lawmakers to challenge a state’s electoral votes when Congress meets to make its official count. It would also clarify that the vice president has no discretion over the results and set out the steps to begin a presidential transition.
A second bill would increase penalties for threats and intimidation of election officials and encourage steps to improve the handling of mail-in ballots by the Postal Service. …
Alarmed at the events of Jan. 6 that showed longstanding flaws in the law governing the electoral count process, a bipartisan group of lawmakers led by Senators Susan Collins, Republican of Maine, and Joe Manchin III, Democrat of West Virginia, has been meeting for months to try to agree on a rewrite.
“From the beginning, our bipartisan group has shared a vision of drafting legislation to fix the flaws of the archaic and ambiguous Electoral Count Act of 1887,” 16 senators said in a joint statement. “Through numerous meetings and debates among our colleagues as well as conversations with a wide variety of election experts and legal scholars, we have developed legislation that establishes clear guidelines for our system of certifying and counting electoral votes for president and vice president.” …
Pioneering Economist Says Our Obsession With Growth Must End
NY Times magazine – July 17
Growth is the be-all and end-all of mainstream economic and political thinking. Without a continually rising G.D.P., we’re told, we risk social instability, declining standards of living and pretty much any hope of progress. But what about the counterintuitive possibility that our current pursuit of growth, rabid as it is and causing such great ecological harm, might be incurring more costs than gains? That possibility — that prioritizing growth is ultimately a losing game — is one that the lauded economist Herman Daly has been exploring for more than 50 years. In so doing, he has developed arguments in favor of a steady-state economy, one that forgoes the insatiable and environmentally destructive hunger for growth, recognizes the physical limitations of our planet and instead seeks a sustainable economic and ecological equilibrium. “Growth is an idol of our present system,” says Daly, emeritus professor at the University of Maryland School of Public Policy, a former senior economist for the World Bank and, along with the likes of Greta Thunberg and Edward Snowden, a recipient of the prestigious Right Livelihood Award (often called the “alternative Nobel”). “Every politician is in favor of growth,” Daly, who is 84, continues, “and no one speaks against growth or in favor of steady state or leveling off. But I think it’s an elementary question to ask: Does growth ever become uneconomic?” …
(lengthy interview at the link)
There’s an obvious logic to your fundamental argument in favor of a steady-state economy, which is that the economy, like everything else on the planet, is subject to physical limitations and the laws of thermodynamics and as such can’t be expected to grow forever. What’s less obvious is how our society would function in a world where the economic pie stops growing. I’ve seen people like Peter Thiel, for example, say that without growth we would ultimately descend into violence.
To me that suggests a fairly limited and grim view of human possibility. Is your view of human nature and our willingness to peacefully share the pie just more hopeful than his? First, I’m not against growth of wealth. I think it’s better to be richer than to be poorer. The question is, Does growth, as currently practiced and measured, really increase wealth? Is it making us richer in any aggregate sense, or might it be increasing costs faster than benefits and making us poorer? Mainstream economists don’t have any answer to that. The reason they don’t have any answer to that is that they don’t measure costs. They only measure benefits. That’s what G.D.P. is.
There’s nothing subtracted from G.D.P. But the libertarian notion is logical. If you’re going to be a libertarian, then you can’t accept limits to growth. But limits to growth are there. I recall that Kenneth Boulding said there are two kinds of ethics. There’s a heroic ethic and then there’s an economic ethic. The economic ethic says: Wait a minute, there’s benefits and costs. Let’s weigh the two. We don’t want to charge right over the cliff. Let’s look at the margin. Are we getting better off or worse? The heroic ethic says: Hang the cost! Full speed ahead! Death or victory right now! Forward into growth! I guess that shows a faith that if we create too many problems in the present, the future will learn how to deal with it.
Do you have that faith? [Laughs.] No, I don’t.
Historically we think that economic growth leads to higher standards of living, lower death rates and so on. So don’t we have a moral obligation to pursue it? In ecological economics, we’ve tried to make a distinction between development and growth. When something grows, it gets bigger physically by accretion or assimilation of material. When something develops, it gets better in a qualitative sense. It doesn’t have to get bigger. An example of that is computers. You can do fantastic computations now with a small material base in the computer. That’s real development. And the art of living is not synonymous with “more stuff.” People occasionally glimpse this, and then we fall back into more, more, more.
But how would a country continue to raise its standard of living without growing its G.D.P.? It’s a false assumption to say that growth is increasing the standard of living in the present world because we measure growth as growth in G.D.P.
If it goes up, does that mean we’re increasing standard of living? We’ve said that it does, but we’ve left out all the costs of increasing G.D.P. We really don’t know that the standard is going up. If you subtract for the deaths and injuries caused by automobile accidents, chemical pollution, wildfires and many other costs induced by excessive growth, it’s not clear at all. Now what I just said is most true for richer countries. Certainly for some other country that’s struggling for subsistence then, by all means, G.D.P. growth increases welfare. They need economic growth. That means that the wealthy part of the world has to make ecological room for the poor to catch up to an acceptable standard of living. That means cutting back on per capita consumption, that we don’t hog all the resources for trivial consumption. …
(footnotes at the link)
If your comment does not go up the first time, it definitely will not go up the second time.
I look in the trash and spam to retrieve legitimate comments which end up there. If you are patient, I will approve it. If you post a note to the thread, I will look for it, approve it, delete your note or tell you it is not there. Too many links and long comments tend to end up in spam or trash.
Other than Ann, who else posts long winded comments (which is ok by me)? The vast majority (95% +) of the comments make it. You are a frequent visitor to the trash. Statically, the system works well. Again, you have no numbers.
What I posted that didn’t make it past moderation was an interview with an apparently conservative economist of some long tenure who presented only ideas, not numbers.
I disagree with his ideas, but I attempted to post a bit more than just the lead-in to the interview, to learn what others might have to say about them.
In this instance, what I posted the second time DID go up after the first attempt did not. There were editing problems with the first effort, due to vagaries of text coming from the NYT, so I tried a slightly different approach with a better result.
Same content, essentially.
Fred
I think you can delete old comments, yes?
Fred:
I posted this on the AB front page along with your name as identification. Perhaps, you would like to add an introduction? And maybe an argument too?
I posted a reply to the front page AB post that has yet to appear.
“lauded economist Herman Daly” is apparently a well-known libertarian.
I was unaware of this, but I am not enamored of libertarians. So I would not support much that he says.
Fred:
It should be there now.
Related?
Economics and the Ecosystem
Entropy is a measure of the disorder in a closed system. According to the second law (of Thermodynamics), entropy in a system almost always increases over time …
There is no getting around this. Other than periodic catastrophic resets, at least as far as humanity is concerned. Malthus was right, although – with growth, technology, science, and sheer determination – it may not seem that way. This is an illusion. Party on dudes.
According to the second law (of Thermodynamics), entropy in a system almost always increases over time …
The above is a weak statement of the second law. More correctly, it reads
According to the second law (of Thermodynamics), entropy in a system always increases over time …
However, somewhat like the Uncertainty Principle, temporary exceptions, even lasting millennia, are permitted. Which is not the case with Uncertainty per se.
FWIW though, the universe itself may be considered a product of the Uncertainty Principle. In the end, there’s no such thing as a free lunch, however.
Robert Reich: Kick Manchin out of the Dem party
Not yet. That really should wait until after the mid-terms in November.
For better or worse, maybe not even then, tho ‘a consummation Devoutly to be wished.’
Computer chips are vital to national security. US needs to make more of them on American soil.
Boston Globe editorial – July 19
The above comment is not-so-vaguely related to the ‘Growth is so over-rated’ thread.
BTW, I posted another comment in that thread 0n the main AB page, with my take on what ‘Growth’ is about really (at least IMO), which still has not appeared there.
Fred:
Another issue I have been quite vocal about.
In 2008 and after, automotive shut down or drastically reduced production. Semiconductors are longer than normal lead time commodities. They did not bother to maintain their supply chain order by setting minimum inventory. The Tiers were not going to order more SCs without OEM orders. So everything shut down.
Starting up wafer plants and the fab plants again is not a short-term task. Automotive and other entities just flipped the switch and said; “where are my chips?” It is not the SC plants responsibility to maintain supply with no orders on hand. It is the user’s, the OEM’s responsibility. Automotive OEMs along with other industry OEMs did not do it in 2008. Here we are again with the same issue.
This is supply chain planning.
Semiconductor fab plants are hideously expensive to build, manufacturers have off-shored much of their capacity, foreign-owned corps (Taiwan, PRC, Korea) have built a lot on their own. And the US industry wants some guv’mint help, evidently.
War and Warming Upend Global Energy Supplies and Amplify Suffering
NY Times – July 20
European Nations Are Asked to Immediately Start Rationing Natural Gas
NY Times – July 20
Thinking we should no longer have Open Threads.
Maybe just retitle it: ‘Dismal Science’
Dismal science is a term coined by Scottish essayist and historian Thomas Carlyle to describe the discipline of economics. Dismal science is said to have been inspired by T. R. Malthus’ gloomy prediction that population would always grow faster than food, dooming mankind to unending poverty and hardship. …
Russia’s territorial aims in Ukraine have expanded, foreign minister says
NY Times – July 20
US, allies weigh providing Ukraine fighter jets
Washington Post – July 20
Bipartisan Senate Group Reaches Deal to Rewrite Electoral Count Act
The senators proposed a bill that would modernize the 135-year-old act, aiming to change a law that former President Trump tried to use to overturn the election.
They lack the 10 Republicans needed to make it past a filibuster, but hope to round up sufficient backing for a vote later this year.
Bipartisan Senate Group Strikes Deal to Rewrite Electoral Count Act
Bipartisan Senate Group Strikes Deal to Rewrite Electoral Count Act
NY Times – July 20
“From the beginning, our bipartisan group has shared a vision of drafting legislation to fix the flaws of the archaic and ambiguous Electoral Count Act of 1887,” the U.S. senators said
Senate group announces a deal on reforming the Electoral Count Act
NPR – July 20