I like these analyses. The problem I have with a number of economic concepts such as GDP, economic growth, and "money" itself is how far removed they are from what I think really matters: matter (especially food and shelter) and energy (which enables everything to work). GDP isn't a totally useless concept; it is just incredibly indirect. I could say that money isn't a totally useless concept, because at this moment I can trade money in my bank account for material goods I use to survive and energy to make my car and appliances run. But that could change in a moment, if suddenly the world refused to acknowledge the value of the figures in my bank account.
Increasing numbers in my bank account seem to indicate progress. But fiscal figures only indicate a promise that may or may not be fulfilled. What if 10 people promised me $100,000 each--would I suddenly be a millionaire? I would not count on it.
In the marketplace, economists speak of economic progress in terms of increasing rates of economic transactions that lead to an increase of GDP. But simply increasing the manufacturing and selling of things does not mean we are better off. Are the products truly useful, helping to keep us alive and gain control of our genetic destiny? Or are we just accumulating tchotchkes that clutter up our houses?
For me, a strong indicator of economic progress is our ability to extract energy with less work. It takes a lot of work to extract fossil fuels from the ground, refine them, and distribute them. That's why I sense that improving our ability to use the sun for energy will lead to genuine economic progress. If we could only figure out how to incorporate chlorophyll into our skin to extract energy from the sun instead of hunting, fishing, growing, distributing, storing, and cooking what we currently use to fuel our bodies, we would really be on the road to economic progress.
GDP and IQ are very rough measures that provide an indication of the possessors potentially to have a good outcome. A nation with a high GDP can provide better life outcomes for its people everything being equal. A person with a high IQ has the ability to achieve more in terms of social mobility, especially in our education oriented society. But both are flawed and people should stop obsessing about both and focus on quality of life issues! Nice insights , thanks for a thoughtful discussion!
Optimising for GDP is optimising for exponentially increasing throughput, complexity and metabolism, all of which are either unsustainable or lead to increased long term fragility. I’d optimise for human flourishing within planetary boundaries instead and not to optimise for increasing GDP as a metric at all. This does mean that on average people will be poorer by most normal standards however, I can’t deceive people about that.
One thing you haven't covered is how much mass automation is going to decouple GDP from the workforce. Instead work will be dominated mostly by ultra-elites and AI models.
This will destroy the middle class in its current form and delegitimise colleges and probably even middle schools. Beyond basic literacy and numeracy for the youngest children, schools will largely cease to have a function above that of a glorified daycare. The education system in its current form will not survive the transition.
1) A more useful target metric than direct GDP is Total Factor Productivity, that is, output per hour worked. Making THIS number go up is pretty much always a good thing, and is the only way to sustainably improve living standards / GDP per capita long term.
2) As a research applied mathematician who is resolutely child-free, a frequent thing I hear is objections at the foregone genetic destiny of little scientists and inventors. For some reason, mentioning the priority of foregoing the expected negative total emotional life quality affect of these hypothetical tortured souls is often not satisfying to them. Next time I will also ask for a donation to a fund to help me work on nanorobotics for genetic engineering. So at least I'm still doing my part for humanity's genetic destiny and they get off my case.
Gee Dee Pee!
Gee Dee Pee!
I like these analyses. The problem I have with a number of economic concepts such as GDP, economic growth, and "money" itself is how far removed they are from what I think really matters: matter (especially food and shelter) and energy (which enables everything to work). GDP isn't a totally useless concept; it is just incredibly indirect. I could say that money isn't a totally useless concept, because at this moment I can trade money in my bank account for material goods I use to survive and energy to make my car and appliances run. But that could change in a moment, if suddenly the world refused to acknowledge the value of the figures in my bank account.
Increasing numbers in my bank account seem to indicate progress. But fiscal figures only indicate a promise that may or may not be fulfilled. What if 10 people promised me $100,000 each--would I suddenly be a millionaire? I would not count on it.
In the marketplace, economists speak of economic progress in terms of increasing rates of economic transactions that lead to an increase of GDP. But simply increasing the manufacturing and selling of things does not mean we are better off. Are the products truly useful, helping to keep us alive and gain control of our genetic destiny? Or are we just accumulating tchotchkes that clutter up our houses?
For me, a strong indicator of economic progress is our ability to extract energy with less work. It takes a lot of work to extract fossil fuels from the ground, refine them, and distribute them. That's why I sense that improving our ability to use the sun for energy will lead to genuine economic progress. If we could only figure out how to incorporate chlorophyll into our skin to extract energy from the sun instead of hunting, fishing, growing, distributing, storing, and cooking what we currently use to fuel our bodies, we would really be on the road to economic progress.
Purchasing Power tries to address some of this!
GDP and IQ are very rough measures that provide an indication of the possessors potentially to have a good outcome. A nation with a high GDP can provide better life outcomes for its people everything being equal. A person with a high IQ has the ability to achieve more in terms of social mobility, especially in our education oriented society. But both are flawed and people should stop obsessing about both and focus on quality of life issues! Nice insights , thanks for a thoughtful discussion!
Optimising for GDP is optimising for exponentially increasing throughput, complexity and metabolism, all of which are either unsustainable or lead to increased long term fragility. I’d optimise for human flourishing within planetary boundaries instead and not to optimise for increasing GDP as a metric at all. This does mean that on average people will be poorer by most normal standards however, I can’t deceive people about that.
One thing you haven't covered is how much mass automation is going to decouple GDP from the workforce. Instead work will be dominated mostly by ultra-elites and AI models.
This will destroy the middle class in its current form and delegitimise colleges and probably even middle schools. Beyond basic literacy and numeracy for the youngest children, schools will largely cease to have a function above that of a glorified daycare. The education system in its current form will not survive the transition.
1) A more useful target metric than direct GDP is Total Factor Productivity, that is, output per hour worked. Making THIS number go up is pretty much always a good thing, and is the only way to sustainably improve living standards / GDP per capita long term.
2) As a research applied mathematician who is resolutely child-free, a frequent thing I hear is objections at the foregone genetic destiny of little scientists and inventors. For some reason, mentioning the priority of foregoing the expected negative total emotional life quality affect of these hypothetical tortured souls is often not satisfying to them. Next time I will also ask for a donation to a fund to help me work on nanorobotics for genetic engineering. So at least I'm still doing my part for humanity's genetic destiny and they get off my case.