The necessity for economic growth.

[Precision Grace]

Economic growth is quite fake really, much like financial markets. I have to say, nothing made my day quite so much as certain hedge funds collapsing in on themselves. I would totally agree with everything iansales said and add this; higher standard of living for everyone is not impossible; what seems to be impossible is for people to define what level of lifestyle is going to make them comfortable in the long run. Nobody can decide that because everyone harbors under illusion that they always need more than what they have. This is simply a wide spread psychosis manufactured by those who are even greedier than the majority. It is now a habit so ingrained that we all have a major national panic when told to stop wasting food so much and go without some of the life's little luxuries. But nobody has managed to properly enjoy Cristmas for decades now because we are all stressed that we haven't spent enough on our nearest and dearest. Or we've spent so much over the years that nothing we come up with now makes a dent in their pleasure centers.
People need therapy; not economic growth.

[Wiglaf]

Originally Posted by iansales

Wait. So putting in place regulations to lower emissions is not the same as regulating emissions? How does that work?

I think you need to get your argument sorted out. This planet is far more important than the profits of some fat cat industrialist.

"...regulations about HOWto reduce emissions..."
"...regulating EMISSIONS..."
They are Not the same. Requiring a piece of equipment does not equal placing a cap on emissions. The first requires you to do something regardless whether or not another way could produce even lower emissions at a lower price; the lower emission lower price method would be illegal. The second requires you to keep emissions below a specified level; you can achieve this any way you want.
Regulating emissions is excellent when keeping track of units of pollution emitted is unfeasible. For example, limiting the level of emissions produced by an automobile at a constant 30mph; actual emissions would require a way to measure everyones emissions throughout the year which varies with speed, distance, terrain, etc.

You can not thoughtfully discuss the economics of pollution abatement without first taking the time to understand the economic concept of externalities and how they can cause market failure. Understanding the cause allows you to fix the problem more efficiently.

[Drachir]

Originally Posted by Wiglaf

No environmentalists want power. Hence greenmail where you file a suit to block a project on environmental grounds but offer to drop it if you get money. Same with using regulations about how to reduce emissions which put power in the hands of regulators and stiffle innovation as opposed to taxing emissions or where that is not feasible regulating emissions(how you lower them is your business). They don't care about the economy except for maybe their personal piece of it and they don't care about the environment either. It is all about personal power.

Before I accept any of your assertions about environmentalists perhaps you could provide me with proof of the global environmental conspiracy to control the world. One thing I am sure of is that large corporations have done their best to convince everyone that unlimited and wasteful growth is the way to go. The fact that such growth might poison the environment or leave the world short of critical resources in the future is something that they don't care about. The motto of big business seems to be use up whatever is available until it is gone and then turn to something else.

[Wiglaf]

Originally Posted by Drachir

Before I accept any of your assertions about environmentalists perhaps you could provide me with proof of the global environmental conspiracy to control the world. One thing I am sure of is that large corporations have done their best to convince everyone that unlimited and wasteful growth is the way to go. The fact that such growth might poison the environment or leave the world short of critical resources in the future is something that they don't care about. The motto of big business seems to be use up whatever is available until it is gone and then turn to something else.

Evidence: Greenmail, requiring equipment rather than lower emissions

Externalities: Business reaps the rewards; we pay the cost. There is no category for effects of pollution on the balance sheet. Therefore pollution is not factored into decission making. Therefore we need to charge for the costs incurred to us and put them on the business's balance sheet. This is easily done by taxing emissions. In the case of a situation where this is too complicated to implement cost effectively, you can then put a cap on the rate of emissions preferably in a cap and trade system. That way you can reap your desired reduction in emissions at the lowest possible cost to economic well being.

The problem is not the cost of saving the environment but the cost of policies pushed by so called evironmentalists that produce greater costs and lower emission reduction than policies based upon sound economic policies for dealing with externalities. Policies that provide the greatest reduction in emissions for the lowest relative cost. Differing as to the point where the reduction in pollution is not worth the cost of decreasing it further is to be expected. However, paying a higher cost for less of an improvement is illogical.

[Scifi fan]

The point remains that people want more material goods and services - ie, they want more money. That may be crass, but it's also true. If not, then they wouldn't care about the recession.

You can argue all you want about fat cats and evil corporations, but that's besides the point. The point is that economic growth is needed to give people what they want, namely, more material wealth.

[Wiglaf]

Originally Posted by Scifi fan

The point remains that people want more material goods and services - ie, they want more money. That may be crass, but it's also true. If not, then they wouldn't care about the recession.

You can argue all you want about fat cats and evil corporations, but that's besides the point. The point is that economic growth is needed to give people what they want, namely, more material wealth.

Actually, with the US's 1.9% rate of population growth, we would need real GDP (GDP with inflation factored out) to grow at about 2% just to stay about the same.

[Scifi fan]

Exactly. We need at least 2 % to stay even with 2% growth rate, rounding errors aside. And this does not include the need for growth in places like India, China, and Mexico, whose teeming billions also need material goods and services.

By the way, it seems American air quality is cleaner than before, and people are living longer. And this is after we have economic growth. In fact, North American air and water is cleaner than before.

[Precision Grace]

Originally Posted by Scifi fan

Exactly. We need at least 2 % to stay even with 2% growth rate, rounding errors aside. And this does not include the need for growth in places like India, China, and Mexico, whose teeming billions also need material goods and services.

By the way, it seems American air quality is cleaner than before, and people are living longer. And this is after we have economic growth. In fact, North American air and water is cleaner than before.

I would argue that economic growth is entirely incidental to that fact. As your article clearly states; "Our efforts to clean up our air appear to be worth it." a point for the environmentalists, I would have thought?

[Fried Egg]

Economic growth is a funny thing...

I regard myself as an advocate of free-market capitalism but I would like to distance myself from our current setup of state sponsored corporatism/"third way" interventionism.

As such economic growth is not an end in itself. It isn ot something that the government should attempt to foster/encourage as if somehow if we bring it about by any means possible, society will somehow be better off.

Right now the government, through it's fiscal and monetary incentives, is trying to get us to spend and borrow more despite our natural inclinations (by and large) to reduce our debts and spending. The economy should grow to suit the people, not the other way around.

Just because a particular policy might seem to increase growth, does that necessarilly make the people better off? Take recent policies in the UK to encourage mothers to go out to work. Subsidies and tax breaks to mothers who go out to work and pay someone else to look after their child. Now we have a lot more mothers working and economic growth is up as a result but are we really better off? Half the mothers are paying the other half to look after their children. Obviously the treasury benefits from extra tax revenues (more income to tax) but I think overall we are just impoverished.

Again, acts of pollution are often permitted in the name of economic growth. But if we legalised theft and counted it in the GDP figures, that would probably drive up economic growth.

Generally speaking, I am not against economic growth. If it arises as a result of the natural preferences of individuals and through an attainment of increased productivity, it can be a good thing.

[Moonbat]

There must be a limit to what the world can produce, and so unrestrained growth will reach that limit and try to encroach over it, leaving the world depleted of resources and unable to meet demand. Have we already reached that point?

Millions (sic) of people losing thier jobs is obviously bad (for them) but they will have opportunities in other new(er) industries.

I would personally take a drop in standard of living if it raised the standard of living for those elsewhere (and preferably the worst off). I was talking to my friend about this and the economy, he is a bricklayer and so is seeing the effects directly. We realised (both being 30) that we have been a generation in comfort, we have never had forced rations or really been through a recession/depression, and we have not had our chance to show our parents/grandparents that we can suffer just as much as they had to, if the need arises. Fortunately (or unfortunatley which ever way you look at it) we haven't needed to forego anything for the greater good, but that doesn't mean we wont be able to when the time comes.

[Fried Egg]

Moonbat

There must be a limit to what the world can produce, and so unrestrained growth will reach that limit and try to encroach over it, leaving the world depleted of resources and unable to meet demand. Have we already reached that point?

It's worth noting that economic growth can mean finding more efficient ways of using our resources, not merely expanding how much of our resources we are consuming. Afterall, waste is an indicator of innefficiency.

[Scifi fan]

Originally Posted by Precision Grace

I would argue that economic growth is entirely incidental to that fact. As your article clearly states; "Our efforts to clean up our air appear to be worth it." a point for the environmentalists, I would have thought?

No. A point for the economists. Economic growth is NOT incompatible with cleaner air - the fanatical environmentalists would say otherwise.

The point is that people do NOT want to lower their material standard of living, and, if not, then the policy makers have to provide economic growth.

[Precision Grace]

Originally Posted by Scifi fan

No. A point for the economists. Economic growth is NOT incompatible with cleaner air - the fanatical environmentalists would say otherwise.

The point is that people do NOT want to lower their material standard of living, and, if not, then the policy makers have to provide economic growth.

Forgive me, but repeating something parrot like does not make it true. Clearly, there are a lot of people prepared to curtail their 'material standard of living', as you call it. The only question is, how many of the other ones can we persuade otherwise.

Also, fanatical anyone should not be part of this equation. It's an unstable and marginal variable and there isn't anything useful you can do with it.

[Moonbat]

It's worth noting that economic growth can mean finding more efficient ways of using our resources

And it would be interesting to see the comparable figures of Economic growth against economic efficiency for the past ten years.

waste is an indicator of innefficiency.

Has the production of waste in the UK risen in the past ten years (in conjunction with economic growth)? We still have milk lakes and egg mountains (or whatever the product was) is that not a sign of huge waste and innefficiency.

When I have seen economic models of growth they haven't been based around a principle of increased output for static input model, they have all been about increasing the input to gain increasing outputs. I know we have been through a re-cycling phase and our waste innefficiency has declined, but I am almost positive (just guessing really) that the amount of resources we are using has risen ahead of our ability to recycle.

our GDP for 2007 was $2.13 Trillion. I don't know how much that has increased since the 60's but I'd like to compare them, and see the relative waste production for the same periods. Lemme see if I can find them.

[Peter Graham]

Economic growth is NOT incompatible with cleaner air.

Hmm. Tell that to (inter alia) the Chinese......

The point is that people do NOT want to lower their material standard of living, and, if not, then the policy makers have to provide economic growth.

Most people have no idea what they want. They just respond to what they think they should want, which in turn usually involves an awful lot of environmentally destructive and ultimately shallow and disposable gee-gaws. What they really don't want is natural disasters that kill lots of people (climate change, anyone), food shortages caused by the collapse of pollinating insects that kill even more people (beekeepers of the world, unite) and increased extremes of drought and flooding which kill some more people.

OK, OK - all of that sounds like the Rant of the Rabid Lentil Weaver. Realistically, we have to start small. It isn't really going to make a jot of difference if a few hippies give their cars up. But we do have to start somewhere rather than just fiddling whilst Rome becomes a blasted desert. And we can do it without suffering any loss to our standard of living. It's time to think globally and act locally. Be the little acorns. If everyone got into it, big business and governments would have to respond. Because in the West at least, we own them, whether as shareholders or voters.

Get a beehive and holiday at home in 2009!

Regards,

Peter