WMN: t3_372hym_t1_crjdd92

[TITLE]

CMV: Growth of economy is not interesting.

[doopie]

To me growth of economy is a meaningless statistic. Economy means exchange of goods and growth of economy is thus increase in exchange. What kind of person evaluates actions in their personal life based on this kind of statistic? For example, picking blueberries in the forest is extremely bad for growth of economy: low skill job and doing things yourself means you won't be buying blueberries from other people. Growth of economy means one should buy processed, marketed, branded food producs in the store and abandon working electronic devices whenever a new model comes to market. One could do that, yes, but I find it laughable how this is the priority goal for politicians - not health, literacy, justice, equality or some other virtue. When asked why economy should grow, they give contrived reasoning from dynamics of economy. They ignore that economy seems to work in cyclic process of growth and decline. Tragicomically many are ready to *worsen* living conditions of masses to accelerate economic growth. What is the point in all this? How can someone strongly support economic growth while having no interest in either means or results of it?

[gunnervi]

If the economy isn't growing, it's shrinking (a perfectly stagnant economy is pretty much impossible to maintain). A shrinking economy means that fewer goods and services are getting exchanged. This means that people who directly profit from this exchange are seeing shrinking profits. This usually leads to layoffs, so that companies can maintain constant profit margins. This leads to high unemployment, which is a drain on our resources and leads to crime. Tl;dr: economic growth is good because recessions are bad.

[doopie]

Could you expand on that "drain on our resources" and "leads to crime" part? I don't see how it follows from unemployment.

[gunnervi]

[STA-CITE]> Leads to crime [END-CITE]Those who have no legal means of obtaining money are more likely to turn to illegal means. [STA-CITE]> drain on our resources [END-CITE]Unemployed people claim unemployment benefits. Higher crime rates mean more public money spent on incarceration and legal fees. Increased homelessness means that publicly and privately funded homeless shelters and soup kitchens have greater expenses, and police are spending more time making sure the homeless don't sleep on the streets (in places where this is illegal). Plus, these are all people that aren't paying much in the way of taxes. So not only does the government see greater expenses, they have reduced income.

[kaisermagnus]

Growth is certainly important, especially when populations are growing. As the population goes up, there are more people buying things, so the economy grows. Your arguments do generally suggest an incomplete understanding of economic theory. Throwing away your old devices the moment a new one comes out isn't actually going to give better growth, since you would otherwise spend that money on something else. Same goes for you food argument. As far as the economy is concerned branded processed food isn't somehow superior to organic "natural" food, if anything organic food is better due to the inflated price. As for your blueberry picker, indeed living a self sufficient life does not add to GDP. Living a self sufficient life is also inefficient, I strongly advise you to read about the concept of economies of scale. Its not a meaningless statistic because people don't buy things unless they want or need them, and a growth in GDP implies that more people are getting more of the stuff they want. Politicians want the economy to grow for two reasons. Firstly a bigger economy means more tax revenue, so the government has more money for public services. Secondly people generally live longer and are happier when GDP is high and there is strong growth, because they can easily get the stuff that they want.

[Hq3473]

If you had to rely on blueberry picking for sustenance your life would suck.

[adoris1]

GDP growth is a rough indicator of net national utility, because it measures transactions and indicates that very many people are making one another better off through mutually beneficial exchanges. When GDP falls or slows down, this is happening relatively less often, and human beings are not improving one another's condition (at least within those ways GDP is able to calculate).

[doopie]

Why is it necessarily better to go to restaurant than cook your own food? We may say that for some individual this is the case (because his cooking is poor or he just enjoys going to restaurant), but it's very different to say this ought to be the case.

[adoris1]

Because the person chose to do it, so in their judgment, the taste (or atmosphere or time saved or healthiness) of the restaurant purchase made them happier. They are the judge of their own utility, not you or I or any outside observer. But even when they cook their own food, they very likely purchase the ingredients and power and appliances and utensils needed to cook/eat it somewhere, which is also exchange and contributes to GDP.

[doopie]

So we are in agreement that such a thing is not for others to decide. As people are ultimately responsible for their judgment, then issues like taxes and regulation do not matter.

[adoris1]

I don't understand the taxes and regulation thing - what point are you making?

[doopie]

Taxes and regulation are often opposed with argument that they stifle growth of economy.

[adoris1]

They do...

[RustyRook]

[STA-CITE]> Economy means exchange of goods and growth of economy is thus increase in exchange. [END-CITE]The economy also includes the exchange goods *and services*, not goods alone. So lawyers, doctos, yoga instructors all exchange their services for goods and services from others. [STA-CITE]> For example, picking blueberries in the forest is extremely bad for growth of economy [END-CITE]What do you mean by this exactly? It may not require too much skill, but it's hard work and does require speed and attention to detail while picking the blueberries. [STA-CITE]> Growth of economy means one should buy processed, marketed, branded food producs in the store and abandon working electronic devices whenever a new model comes to market. [END-CITE]No, it does not. Organic food is more expensive than its substitutes. As for the electronics, no one recommends replacing a phone year after year. People choose to eat junk, and buy replaceable products. The money that people save by not spending on electronics goes to other goods and services. Even if it goes in the bank, it's put into the system and made available to investors. By the way, politicians make a HUGE deal of education. Every single campaign makes education of the cornerstones of their campaigns because it appeals to so many voters. And the same goes for healthcare.

[doopie]

Any action that doesn't involve other people is non-economic. Anything that you won't sell for any price has no value. Thus picking blueberries for yourself to eat has no benefit for economy. What does it mean when retail sales are low on the scale of whole industry? Satiation? Demand seems to make no distinction between satisfied and miserable person.

[RustyRook]

[STA-CITE]> Any action that doesn't involve other people is non-economic. [END-CITE]That's not true at all. The person picking and eating blueberries is using naturally available resources, which may or may not benefit the economy in the long-term. The person may develop a taste for blueberries, may become a blueberry farmer, etc. No matter what, once **any** resources are used, it becomes a matter of economics. [STA-CITE]> Anything that you won't sell for any price has no value. [END-CITE]Again, not true. Services available on the internet are a prime example. Take e-mail. You probably pay nothing for your personal email, but you use it to correspond with others. If you were to look for the same service outside the internet you'd have to pay for postage and stationery, which cost money. You also haven't responded to my points about servies, or the price of organic foods. Are you even looking to have your view changed?

[doopie]

Doesn't definition of resource include availability? Someone picking blueberries or nursing their own child is not making these goods and services available to other people, so the person is not increasing GDP with these activities. I'm open to have my view changed, that's why I made this post. You could change my view by showing how policies that aim to increase GDP have natural reasons. Also showing how GDP increase benefits society as a whole would change my view. I think the effect is random. Drugs and pollution harm society, but may be big business.

[RustyRook]

[STA-CITE]> Doesn't definition of resource include availability? [END-CITE]If someone is picking blueberries then we're talking about an available resource. Even if it's on the person's own property, it's still part of the large economy because it's part of that person's wealth. And the act of picking blueberries does have an effect on the economy, even if in the negative. In this case, the person's demand for blueberries is not provided by the market so it has an effect on the price of blueberries available to other people, who may not have access to wild blueberries. And the money that the person picking the blueberries saves goes right back into the economy through the banking system. As I wrote in my original comment, it's made available to investors. [STA-CITE]> nursing their own child is not making these goods and services available to other people, so the person is not increasing GDP with these activities. [END-CITE]Easily disprovable. A nursing mother typically has much higher caloric requirements compared with when she wasn't nursing. Do you know where she gets the extra food that she needs to eat to have enough for herself and her child? The marketplace. Her need for more food in order to nurse her child results in her spending more money, which leads to economic growth. Directly. Just through the buying of goods. And if she chose to replace milk with formula, she would still need to puchase the baby formula from the market. Every time a child is born there is a new demand for food in the economy. You're looking at it from the perspective of the mother whose milk is for the benefit of her child, but to make that resource available to her child she needs to consume more than before. That increase in consumption is provided by the marketplace. And that's a completely natural reason to increase the production of goods and services - to have them available for mothers to nurse their children. And as I wrote in a different post in response to your question regarding the need for increasing GDP: > There are more people on Earth than ever before. The population of almost every country in the world is increasing (whether due to births or immigration) and everyone needs to make a living. So if the number of people eating the pie is increasing, the pie needs to get bigger so that everyone doesn't go hungry.

[doopie]

∆ This is a good response. Economy should grow because population is growing. Needs of the growing population are natural.

[DeltaBot]

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[sloggz]

A strong economy indicates a high level of human activity. It might be meaningless to any single person, but for the people as a whole, it's a very good indicator of the health and productivity of industries, cities, countries etc. A great economy shifting a here or there (the sorts of movement we've seen, even in the last 10-15 years) might start to seem unimportant. But trust me, if the economy ever started failing real hard, we'd all be very aware of it. The economy provides us with our current living standard, and ability to support and provide for as many people as our societies do. If the major western economies were to crash, thousands, perhaps millions and millions of people would die horrifying deaths.

[doopie]

Economy is natural, but why would it have to grow for unnatural reasons? I think scientific and technological development is what enables good living conditions and rapid population growth.

[genebeam]

[STA-CITE]> unnatural reasons [END-CITE]What is natural or unnatural in the context of an economy?

[doopie]

Natural are those that come from human needs. Unnatural reasons are various macroeconomical hacks that are introduced into economy by humans: controlling inflation, financial instruments and so on.

[Kirkaine]

"Scientific development" is pretty much impossible to measure. GDP is fairly easy to measure, and it strongly connected to "scientific and technological development", as well as health, literacy, life expectancy, etc. We use GDP not because it's important, but because it happens to be a good way to measure a large number of things that are important.

[doopie]

I'd say being able to trace heritable diseases to specific genes is a whole lot more advanced than relying on mere correlation. GDP has effect on health when people live in poverty. It doesn't say why endlessly rising GDP would be desirable.

[badnews4u]

http://upload.wikimedia.org/wikipedia/commons/0/01/1700_AD_through_2008_AD_per_capita_GDP_of_China_Germany_India_Japan_UK_USA_per_Angus_Maddison.png

[Kirkaine]

Is that really the standard of improving the human condition? Being able to identify the causes of a handful of diseases?

[doopie]

No, it's an example of scientific advancement.

[Kirkaine]

It's an example of. It isn't a measure of. No broad scope measure of scientific advancement exists.

[RustyRook]

[STA-CITE]> why endlessly rising GDP would be desirable. [END-CITE]There are more people on Earth than ever before. The population of almost every country in the world is increasing (whether due to births or immigration) and everyone needs to make a living. So if the number of people eating the pie is increasing, the pie needs to get bigger so that everyone doesn't go hungry.

[Stokkolm]

[STA-CITE]> We use GDP not because it's important, but because it happens to be a good way to measure a large number of things that are important. [END-CITE]Such as? Correlation does not imply causation. GDP measures GDP. Unless there is proof that GDP is a direct cause for the evolution of these other aspects, it's a fallacy to assume so.

[Kirkaine]

Correlation doesn't imply causation. But that doesn't matter. We're not trying to explain scientific progress with GDP, we're trying to measure it. For measurement, correlation is sufficient.

[Stokkolm]

So a logical fallacy doesn't matter? Measuring the level of education, or scientific progress with the amount of potatoes sold is sufficient?! I don't even...

[Kirkaine]

It's not a logical fallacy because I'm not trying to claim causation. Sorry to contradict your "Winning Internet Debates 101" professor, but "correlation doesn't imply causation" is a little more nuanced than a trump card that you throw whenever someone suggests a relationship you don't like. On the whole, GDP per capita is one of, if not the, best single number we have that conveys a great deal of information about various indicators we do actually care about. This is not causation, this is information theory, a field based completely on correlation.

[Stokkolm]

I'm sorry for being aggressive and trying to push the burden of proof on you. I'll try a different approach. What if instead of folding our t-shirts ourselves, a whole industry was created to fold the t-shirts for us. The GDP would surely benefit from it. But no one else would. It seems GDP benefits from doing things as expensive and inefficiently as possible.

[Kirkaine]

Yes, that example would destroy the correlation and make GDP a useless measure of wellbeing. Again, since we're talking about correlation and not causation, there is no iron law that anything that helps GDP reflects an increase in wellbeing, as you've just demonstrated. However, in the real world, not the hypothetical one, the data shows quite clearly that GDP *is* correlated with multiple aspects of wellbeing. I'm not trying to convince you that GDP *must always* be a good indicator of progress. It just happens to be that way, and that's why we use it.