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On October 14 2014 05:53 Rassy wrote:Show nested quote +On September 12 2014 16:40 WhiteDog wrote:On September 12 2014 16:33 IgnE wrote:
Well Jonny if turning a profit was all that there was to capitalism you'd have made a point. How do you define capitalism ? But I see your point that, in the long run, searching for growth is not a sustainable solution, and a structural unemployment at 5 to 10 % is also a problem, but in our era, with so many stupid people in the highest sphere of power, there are no possible alternative, no words to describe a viable future society that would not revolve around the constant running around for "more growth". Personally I don't care about growth, I only care about jobs. Why is searching for growth not sustainable? We have been growing for 6000 years at an exponential rate and we are still growing at an exponential rate. Nothing I see indicates that this would not be sustainable. No plague ,2 worldwars or nuclear bomb has been able to stop us from growing. Technological progress can sustain growth till infinity. And marx,he is right in his own context but his context is wrong. When reading marx he seems to assume that the amount of money in circulation is fixed,and yes if you have a fixed amount of money and a small group of people slowly acquiring all of that money then demand will drop. But we can just expand the amount of money and everyone gets richer (as long as productivity keeps up) ,demand does not need to fall. If tomorrow every job would be done by robots we would not be poor, we could simply pay the robots nothing and give everyone there regular paycheck. The economic education of today is horrible for some reason but in the end it is very simple. Economics is about 2 things. 1-making a pie 2-dividing the pie. The pie is the only thing that is real,it is the only thing that matters. Just look at how the pie is made and how the pie is divided and you can see how the economy works and what factors are a threat to our economic system.
So techno-jesus will come down and save us from all the bottlenecks, given us cold fusion, and distribute the robots equally. Sounds good.
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On October 14 2014 06:37 IgnE wrote:Show nested quote +On October 14 2014 05:53 Rassy wrote:On September 12 2014 16:40 WhiteDog wrote:On September 12 2014 16:33 IgnE wrote:
Well Jonny if turning a profit was all that there was to capitalism you'd have made a point. How do you define capitalism ? But I see your point that, in the long run, searching for growth is not a sustainable solution, and a structural unemployment at 5 to 10 % is also a problem, but in our era, with so many stupid people in the highest sphere of power, there are no possible alternative, no words to describe a viable future society that would not revolve around the constant running around for "more growth". Personally I don't care about growth, I only care about jobs. Why is searching for growth not sustainable? We have been growing for 6000 years at an exponential rate and we are still growing at an exponential rate. Nothing I see indicates that this would not be sustainable. No plague ,2 worldwars or nuclear bomb has been able to stop us from growing. Technological progress can sustain growth till infinity. And marx,he is right in his own context but his context is wrong. When reading marx he seems to assume that the amount of money in circulation is fixed,and yes if you have a fixed amount of money and a small group of people slowly acquiring all of that money then demand will drop. But we can just expand the amount of money and everyone gets richer (as long as productivity keeps up) ,demand does not need to fall. If tomorrow every job would be done by robots we would not be poor, we could simply pay the robots nothing and give everyone there regular paycheck. The economic education of today is horrible for some reason but in the end it is very simple. Economics is about 2 things. 1-making a pie 2-dividing the pie. The pie is the only thing that is real,it is the only thing that matters. Just look at how the pie is made and how the pie is divided and you can see how the economy works and what factors are a threat to our economic system. So techno-jesus will come down and save us from all the bottlenecks, given us cold fusion, and distribute the robots equally. Sounds good.
worked for the last few hundred years
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Yeah it was great to be a factory worker in the 19th century.
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On October 14 2014 05:53 Rassy wrote:Show nested quote +On September 12 2014 16:40 WhiteDog wrote:On September 12 2014 16:33 IgnE wrote:
Well Jonny if turning a profit was all that there was to capitalism you'd have made a point. How do you define capitalism ? But I see your point that, in the long run, searching for growth is not a sustainable solution, and a structural unemployment at 5 to 10 % is also a problem, but in our era, with so many stupid people in the highest sphere of power, there are no possible alternative, no words to describe a viable future society that would not revolve around the constant running around for "more growth". Personally I don't care about growth, I only care about jobs. Why is searching for growth not sustainable? We have been growing for 6000 years at an exponential rate and we are still growing at an exponential rate. Nothing I see indicates that this would not be sustainable. No plague ,2 worldwars or nuclear bomb has been able to stop us from growing. Technological progress can sustain growth till infinity. And marx,he is right in his own context but his context is wrong. When reading marx he seems to assume that the amount of money in circulation is fixed,and yes if you have a fixed amount of money and a small group of people slowly acquiring all of that money then demand will drop. But we can just expand the amount of money and everyone gets richer (as long as productivity keeps up) ,demand does not need to fall. If tomorrow every job would be done by robots we would not be poor, we could simply pay the robots nothing and give everyone there regular paycheck. The economic education of today is horrible for some reason but in the end it is very simple. Economics is about 2 things. 1-making a pie 2-dividing the pie. The pie is the only thing that is real,it is the only thing that matters. Just look at how the pie is made and how the pie is divided and you can see how the economy works and what factors are a threat to our economic system.
We've been growing for 200 years max, not 6000. There were no or almost no growth prior to the industrial revolution.
I'll not discuss the rest, innovation is not something that you can predict, so it's not rational to wait for it while our consumption is not sustainable. Suppose you're driving at 100 miles an hour toward a wall, everybody knows waiting for an upgrade that'll let the car fly above the wall is not the best solution.
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Those 200 years coincide with the exploitation of the earth's great natural energy resource: fossil fuels. Growth is exponential. Fossil fuels aren't growing. Innovation depends on energy.
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I see his point, you can't limit growth to just the industrial revolution. Civilization has been growing since we learned to harvest crops. Sure there has been times of contraction, but to say that ecomomic growth is solely due to the industrial revolution is disingenuous.
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![[image loading]](http://www.iasc-culture.org/THR/archives/Summer2012/yates_figure_c.gif)
Nope. Not disingenuous.
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I actually don't understand the point, is gdp growth or the industrialization now considered to be a bad thing? Also I think it's fair to say that environmental exploitation during the beginning of the industrial era was probably way worse than today.
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The point is that saying,
worked for the last few hundred years [and therefore it will continue to work!]
is faith-based wishful thinking that doesn't grapple seriously with physical challenges to innovation (foremost energy) nor with equitable distribution of resources and organization of society.
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And saying "although it worked in the past, it will not work in the future" is a less faith based statement? And regarding the second part, the US for example has over the last few years steadily increased their gdp while reducing carbon emissions. Making technology more efficient and increasing renewable energy output seem to progress quite well. If we talk about potential disasters for our economy I don't think energy would even make the top 5.
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Yes. It's a less faith-based statement. Relativism doesn't work here.
It's not about emissions. It's about energy. I'm not talking about climate change. It's irrelevant that the US has reduced carbon emissions.
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On October 14 2014 10:50 IgnE wrote:
Yes. It's a less faith-based statement. Relativism doesn't work here.
It's not about emissions. It's about energy. I'm not talking about climate change. It's irrelevant that the US has reduced carbon emissions.
Between increasingly efficient solar panels, increasingly efficient wind turbines, soon-to-be ethanol production from plant waste and fusion reactors on the long-term horizon, energy is not much of a problem. Combine that with increasingly efficient machines that do the same with less power and far less waste. A raspberry pi has approximately the same capacity as a Pentium III, but uses less than a tenth of the energy.
Water is a far far far far far more serious issue than energy will ever be. Not that I believe exponential growth is sustainable, but it's not due to energy that it isn't, it's due to something far simpler. Basically, we already have an aging and shrinking population, and that is not changing any time soon. South America and South East Asia have passed their max population and the same trend is in Africa to be reaching max pop in the next 10 years or so. With a shrinking population, there are simply no longer a growing number of people wanting to buy stuff, and that´ll be the end of exponential growth.
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This is quite off-topic. Not sure what this really has to do with EU economics and politics.
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Computer energy usage is a tiny fraction of total energy usage. Anecdotes about certain technologies being more efficient does nothing to disprove the idea that energy is THE key roadblock in continued worldwide growth.
Water is kind of a red herring. Population growth isn't a requirement for continued economic growth, the primary indicator there is per capita growth. Besides if you had unlimited energy you could just use distillation for fresh water everywhere. It's weird to entertain arguments about growing productivity and efficiencies in technological gadgets while also being adamant about continued population growth being a requirement for continued economic growth.
Yeah Europe is seeing some negative population growth, discounting immigration, but that is more of a symptom than a cause of its economic stagnation.
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Zurich15364 Posts
On October 14 2014 05:55 Rassy wrote:
"I don't get why Germany doesn't even invest in infrastructure. They need it and it's a boost for the rest of the eurozone. A win win basically."
Didn't knew Germany didn't invest in infrastructure.
It seems odd to say the least, the country that does not invest at all has the best roads in Europe.
Roads are reasonably maintained, yes, but roads aren't the only infrastructure. Here is a neat little story about the problem:
http://www.vox.com/2014/10/9/6951745/kiel-canal-german-austerity
Canal locks have been a problem in Germany in general for years, yet nothing is being done about. Broadband internet is a shame by now, Germany is pretty much where it was 10 years ago. Then of course there are the spectacular failures of big time infrastructure projects like the Berlin Airport or the Stuttgart train station. Arguably the most important issue are cross country power lines from the North Sea offshore wind parks to the industry in the South - yet this isn't even past initial planning talks.
There is a lot of incredibly important infrastructure that doesn't see the funding it should, and much of it is because zero deficit is the holy grail of the current administration.
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On October 14 2014 08:05 IgnE wrote:
Those 200 years coincide with the exploitation of the earth's great natural energy resource: fossil fuels. Growth is exponential. Fossil fuels aren't growing. Innovation depends on energy.
Well yes, and in the 19,th century people where afraid coal would run out.
Maybe at the end of this century we will be afraid that uranium will run out and afraid to run out of hydrogen in the next century.
Then around 2800 we will start worrying about the sun dying, and so on till xxx billion years from now we will worry about the end of the universe
Well the later is a bit optimistic I have to admit lol but while we do depend on energy, we don't depend on fossil fuels as it is not the only fuel.
Maybe it will take 500 years to make the next big jump in energy,i don't know.
All that will mean is that we will grow very slowly for the next 500 years but in the grand sceme of things 500 years is not a long time at all.
Maybe that's where the difference in opinion comes from, I look at all this at a very large timescale.
At shorter timescales there can be speedbumps in the road and we can experience relatively short periods of zero or negative growth.
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But yes, about the eu economics and policys.
Roads are reasonably maintained, yes, but roads aren't the only infrastructure. Here is a neat little story about the problem:
http://www.vox.com/2014/10/9/6951745/kiel-canal-german-austerity
Didn't knew about this,thx for link.
In my opinion Germany is doing fine and the zero deficit is a fine target.
Think everyone agrees that it is impossible to run a growing deficit forever (well it is perfectly possible as it is just accounting that has nothing to do with making the pie but I wont go into that rabbithole now) so at one point we have to have a zero deficit or a surplus.
When would be a good time to do so? Well basicly never...people will always find good reasons for spending more money then comes in.
There was this idea of stimulus when economy contracts and then pushing the brakes when the economy acceleraters,but all we do is stimulus and run deficits, we almost never push the brakes and run a surplus. This has been going on for decades now,it is the norm.
About the german investments in infrastructure I don't know and I cant judge it to well from over here.
All I can see is that they did invest enough in the past because the german economy has been doing very well for the last decade.
Maybe in the future it will lead to problems and it could be bad planning now, I don't know.
Still there will be room for extra stimulus then because they have been safing now.
The average citizen barely profits from all this stimulus btw, the usa is the prime example of this.
Most of it ends up in the hands of the elite,wich is another reason I am not a fan of it.
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Cayman Islands24199 Posts
the 'growth at an exponential rate for 6000 years' thing is quite bad, betrays a fundamental misunderstanding of why and how development happens.
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On October 14 2014 21:45 Rassy wrote:But yes, about the eu economics and policys. Roads are reasonably maintained, yes, but roads aren't the only infrastructure. Here is a neat little story about the problem: http://www.vox.com/2014/10/9/6951745/kiel-canal-german-austerityDidn't knew about this,thx for link. In my opinion Germany is doing fine and the zero deficit is a fine target. Think everyone agrees that it is impossible to run a growing deficit forever (well it is perfectly possible as it is just accounting that has nothing to do with making the pie but I wont go into that rabbithole now) so at one point we have to have a zero deficit or a surplus. When would be a good time to do so? Well basicly never...people will always find good reasons for spending more money then comes in. There was this idea of stimulus when economy contracts and then pushing the brakes when the economy acceleraters,but all we do is stimulus and run deficits, we almost never push the brakes and run a surplus. This has been going on for decades now,it is the norm.
When the fiscal multiplier is low would be a good time to run a surplus. The simple argument is that the government should focus on spending when the economy is weak and focus on saving when the economy is strong. As your post implies. However, the nature of democracy forces most governments to focus on short-term benefits over long-term benefits. It would be political suicide for a politician to say that the economy is doing well so the government is going to run a surplus because some other politician will inevitably say that they will either 'give that money back to the people' by cutting taxes or improve some social service (police, fire service, health service, pensions, roads, ...)
Although fiscal policy is rarely used to put the brakes on, monetary policy often is. The most notable example is setting a high interest rate. Monetary policy is controlled by the central bank so is a bit protected from politics; the governor does not have to worry about being democratically elected, hence is better able to do things that are economically smart but politically unpopular.
About the german investments in infrastructure I don't know and I cant judge it to well from over here.
All I can see is that they did invest enough in the past because the german economy has been doing very well for the last decade.
Maybe in the future it will lead to problems and it could be bad planning now, I don't know.
Still there will be room for extra stimulus then because they have been safing now.
I don't know how important infrastructure investment was/is to Germany's success. I thought it was more due to the labour reforms. Germany kept its labour costs at about the same level while they continued to rise in other countries. This made Germany more competitive. It also increased inequality. Here is a bit about Germany's labour costs over the last decade.
The average citizen barely profits from all this stimulus btw, the usa is the prime example of this.
Most of it ends up in the hands of the elite,wich is another reason I am not a fan of it.
That depends on how the stimulus is done. For example; decreasing the rate of VAT is considered a form of stimulus, and that would help average citizens. I think (but I don't have a source to hand for this) that the stimulus in the US had to be the way it is/was for political reasons. Other methods were or would have been stopped by the Republicans. Politics often trumps economics when it comes to making these decisions. Sadly.
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There is a huge difference between the philosophical idea of "progress" and GDP growth. The problem is most of you don't see it. Growth is the idea that you can increase the overall production (the GDP measure production flux). Economists consider it to be one of the best indicator of well being because they consider that consumption always lead to an increase in utility (satisfaction).
Now you can have a progress, being technical, scientifical or even from the point of view of well being, without any growth, but by reallocating ressource (you produce the same amount, but in a different way) - China today, with its current wealth stock, could be a better place, more progressive, no doubt about it.
Now growth has limits ? Sure you can say that we need to invest in research and development in order to make our usage of natural ressources more efficient, in order to facilitate growth with a limited set of ressource, or to substitute natural ressources with man made ressources. But at some point the natural ressources will fade away anyway, unless you can increase the productivity of one unit of natural ressource to infinity and beyond (or, that you can endlessly substitute natural ressources with man made product, which is the idea behind the hartwick rule), which is basically the definition of the philosopher stone.
So yeah, search for the philosopher stone, I'll stand behind the idea that there are limit to our growth on this earth.
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EPT
