Hahaha. Very funny Pericles.

You are a most interesting study in psychology!!

Consider this:

You and I are on the beach, having a chat about GDP and sustainability.

Ludwig: “I reckon that the way GDP is calculated is contributing enormously to us NOT achieving a sustainable society.”

Pericles (looking at me as though I’m completely bonkers): “WTF’s GDP got to do with suss… susty… how do you say it…..sustability?”

Ludwig: “GDP promotes never-ending growth, or feeds straight into the madness of blind economists that worship never-ending growth…. which is at complete odds with a sustainable future”

Pericles (glancing at Ludwig with a very puzzled look, as if to say; I wouldn’t have a clue what you just said): “But growth is good and faster growth is better…. and slower growth is worse. That’s the absolute fundamental bottom line with GPD!”

Ludwig: “YES…. …….. ……… ……… and how does that fit with us achieving a sustainable future?”

Long silence.

Pericles: “WTF is this susta…. saisty…..saystunnability thing that you are always on about?”

Ludwig (realising that it is pointless continuing this conversation): “Hwaaw, look at that itsy bitsy bikini. Now, she’s deffnitly got saystunnability!”

Pericles: "Ahhh, now I understand you........... I think?!"

<< Adam Smith is the Pythagoras of economics. >>

Ohhh puuuleeease! (:>(

From ‘The Wealth of Nations’

The very first sentence in the introduction reads:

< THE ANNUAL LABOUR of every nation is the fund which originally supplies it with all the necessaries and conveniencies of life which it annually consumes. >

¿What?

The ‘fund’ is the resource base. The labour is the intermediary between the resources and the useful endpoint of those resources!

Labour is not the fund. If we had heaps of labour and very limited resources, we wouldn’t be getting very far.

This is very telling indeed about the enormous fallacy inherent in basic conventional economics.

Surely the resource base, the draw-down on it, the renewability or once-off use of it, the constancy or rate of change in consumption of it and all its components…. is the real bottom line.

And surely any primary measure of our economy that doesn’t take into account these things is critically flawed.

Pericles, I don’t know how on earth you can see great wisdom in this opening sentence with reference to GDP.

I see great folly, right from the most fundamental level!

More later

Nice try, Ludwig.

>>You and I are on the beach, having a chat about GDP and sustainability.<<

For a start, only you are talking about sustainability. My brief is to educate you on the meaning and significance of GDP, so that in future you can avoid such infelicities as this:

>>...GDP... is a most terribly flawed economic indicator, which adds all sorts of negative factors to the positive side of the ledger, such as increased economic turnover as a result of fires, floods, cyclones, illnesses due to smoking or alcohol, etc, etc<<

GDP, as you should know by now, does not have a positive and negative side to its ledger. It simply adds stuff together. Your opinion as to whether this is beneficial to your particular lifestyle is, I regret to say, irrelevant in economic terms.

Once you have genuinely understood the foundation stone of the GDP calculation, you may use it in any way that you like.

>>I reckon that the way GDP is calculated is contributing enormously to us NOT achieving a sustainable society.<<

If I was sure that you actually do understand "the way GDP is calculated", I might let that stand as a genuine, if idiosyncratic, view on the topic of sustainability. Since it is a fact that you clearly don't understand, and seemingly do not wish to understand, the fundamentals of GDP, there is little value in pursuing this train of thought.

>>GDP promotes never-ending growth<<

You see, with statements like that, you prove my point perfectly. GDP does nothing of the sort. It is a number. More is generally better, less is generally worse, while with per capita GDP, more is certaiunly better, less is certainly worse. You have been consistently unable to show one example where this has been shown to be false.

And I can assure you that I have never made such a claim as this, that you ascribe to my avatar...

>>But growth is good and faster growth is better…. and slower growth is worse<<

Speed of growth is a totally different matter. Ask the Chinese.

Or even the Japanese.

If this is the best you can do as a critique of Adam Smith, you really need to try a lot harder.

>>¿What? The ‘fund’ is the resource base. The labour is the intermediary between the resources and the useful endpoint of those resources! Labour is not the fund. If we had heaps of labour and very limited resources, we wouldn’t be getting very far. This is very telling indeed about the enormous fallacy inherent in basic conventional economics.<<

Ok, let's look at that in a little more detail, and see where we get to.

You assert that "if we had heaps of labour and very limited resources, we wouldn’t be getting very far."

That is patently wrong. As well as its being logically false, empirical evidence is strongly against it.

As examples of successful economies with "heaps of labour and very limited resources", have a look at Singapore. Or Hong Kong. Or, on a slightly bigger scale, Japan, of which country the CIA Factbook observes...

"...with virtually no energy natural resources, Japan is the world's largest importer of coal and liquefied natural gas, as well as the second largest importer of oil".

Think of it this way. If we had "heaps of resources, and very limited labour", what would be the state of our GDP? And would we, individually, be as well off as we are?

Now have another look at this observation of yours:

>>Surely the resource base, the draw-down on it, the renewability or once-off use of it, the constancy or rate of change in consumption of it and all its components…. is the real bottom line.<<

Can you see the inherent fallacy now?

>>Pericles, I don’t know how on earth you can see great wisdom in this opening sentence with reference to GDP.<<

Stick with it, Ludwig. Keep your mind open, in particular avoid colouring what you read with your virulent anti-immigration views.. You will be amazed at what you will find.

<< For a start, only you are talking about sustainability. >>

Sadly, yes. (:>(

<< Keep your mind open >>

Hmmmm. It seems that yours is closed tightly.

If you are not willing to talk about sustainability in relation to GDP and economic growth, then basically you are not even willing to think about the future at all. With such an incredibly narrow view, it is no wonder that you can’t see the enormous error in your simplistic assertion that more growth is good and less is bad. Please, open ye mind!

<< My brief is to educate you on the meaning and significance of GDP… >>

Oh really. Sorry, but this is not a teacher / pupil relationship, it is a discussion between two people who both know a bit about economics and related stuff, neither of whom are experts, and who happen to have fundamentally different views.

We are learning from each other here. Well… I am considering everything that you say very closely, while you seem to be just dismissing a lot of what I say without much critical thought at all, and hunkering down in the old conventional economics corner.

<< GDP, as you should know by now, does not have a positive and negative side to its ledger. It simply adds stuff together. >>

Er… I think we’ve thoroughly been over this point. Yes, it adds all sorts of stuff together, regardless of whether it advances prosperity, helps recovery from disasters, is neutral in terms of countering the negative effects of illness and injury or is just duplicating everything for the ever-increasing population.

continued

<< Your opinion as to whether this is beneficial to your particular lifestyle… >>

What? Please, don’t make silly comments.

<< … is I regret to say, irrelevant in economic terms. >>

YES. Different types of economic growth are irrelevant in GDP, and of little relevance in CONVENTIONAL economic terms. But of course in REAL economic terms, they are enormously important.

I wish you could get your head around this.

Crikey, half of what you espouse as being good about GDP are things that are fundamentally wrong with it!

<< Once you have genuinely understood the foundation stone of the GDP calculation, you may use it in any way that you like. >>

Whaaat??

So how does this bizarre statement sit with the fact that it is just a single simple number, which is the sum of all economic activity, minus exports…. regardless of the ‘prosperity’ of that economic activity?

Pray tell; what do you mean by ‘any way you like’? In what many and varied ways could it be used?

<< Since it is a fact that you clearly don't understand, and seemingly do not wish to understand, the fundamentals of GDP >>

Why do you keep saying this? Don’t you think that I understand GDP by now? What is it about GDP that you think I don’t understand?

How does your bizarre assertion sit with the fact that GDP is really very simple, the definition of which we went over right at the start of this discussion, or I think on a previous thread.

<< More is generally better, less is generally worse… >>

Whoa! What’s this ‘generally’ bit?? Are you now saying that there could actually be some instances in which more is not better and less is not worse?

continued