Monday, May 04, 2020

I'd say that even technological advance is not counted in traditional measures of GDP

Economic growth is seen as an unnecessary evil.

My thinking as related to this article about Jacinda Ardern's budget priorities in New Zealand. Emphasis on the Well-being of citizens, rather than traditional measures; like productivity and economic growth.

Lots of people talk about progress on quality of life measures, rather than traditional economic growth. This is becoming more of a common theme as time goes on.

Here's another thing I have noticed, that isn't as widely discussed. Our technological progress has become largely disconnected from our economic growth. Computers and various other things keep getting more sophisticated for less money. "Less money" means this wealth is not being measured by traditional economics. It's an aspect of the quality of life beyond just a slower pace of life. It's technological progress, but it is also missed by traditional economics.

Facebook enables some deep communication (some folks might disagree), but that engagement does not pay one's rent. The web offers lots of opportunities today. Volunteer opportunities, learning and so forth. Opportunities that can be defined as progress, but not often measured as economic growth.

Technology can often mean that making a living becomes more difficult. For instance the disruption in journalism created by media going online.

Another place where technology; the ease of shipping; makes it harder to make a living is in globalization. This can push down wages in more developed economies while, at the same time, being a blessing to consumers. Consumers often benefit while workers suffer. These are often the same people. The same people wearing two different hats as the consumer and worker.

While technology can add to quality of life in ways that aren't often measured in GDP, there still remains a lot of pressure to raise GDP. Pressure to continue the old models of growth.

Part of this pressure relates to the fact that much of the world's population keeps growing. It has also been rising out of poverty. The reduction in percentage of people living in poverty is a massive shift in recent times that we can pat our global selves on the back for. More folks have risen out of poverty, during the past few decades, than at any other time in history.

Added to this is the fact that world population keeps growing. Some of that growth continues to come to the US adding to our pressure for growth; the housing shortage for instance.

Here in the west, the concept of growth appears less necessary. Much of it just seems to be about keeping up with rising prices. Rising housing prices; for instance. There's also the perceived need of "keeping up with the Jones'".

Another pressure comes from the growing wealth gap. While wealth increases for just about everyone, the gap between upper and lower incomes is getting much wider. This pushes up the cost of living, for instance paying the higher cost of a doctor due to the doctor's greater wealth, compared to the average population. Same for costs created by corporate executives.

There is still way too much need to advance wages and GDP.

Interesting analogy, in article, about the act of chewing one's food. Chewing is work in order to bring about the satisfaction of the food. Often, the economy focuses on the chewing as an end in itself versus the outcome. I'm reminded of work for the sake of work; like "do we need that extra shopping center just to create jobs?" "Do we really need those products?" "Do we really need another strip mall?"

I think there is a human need to make progress. Not to go back to a less technological time. Progress can still be made. Still made at an even dizzying pace, but traditional economic growth is less necessary. Traditional economic growth seems to be more disconnected from actual human progress when progress is measured in broader terms.

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