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The Forum > Article Comments > Australia's growth imperative: will we walk the talk? > Comments

Australia's growth imperative: will we walk the talk? : Comments

By Geoff Carmody, published 12/3/2014

Allowing for declining terms of trade, net income from overseas, etc, trend real per capita net national disposable income has fallen for over two years.

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There's always been a growth imperative. Beyond a subsistence level of existence the basics for any improvement in the quality of life at a national level have remained the same as that for individuals since, like forever…

Since Gork's Neanderthal family clan found themselves with more mammoth meat than they could eat and were able to trade some for cave bear (Ursus spelaeus) furs to better survive the increasingly bitter winters, which those funny looking Homo sapiens in the next valley over said was evidence of climate change and an impending ice age… though Gork denied this because last summer was hotter than any he could remember.

Put simply, you require a surplus. This can be combinations of lots things; food, land, energy, money, slaves, productivity, technology, knowledge, goodwill, et cetera. Even time.

Unfortunately, for continued improvement in a society's 'quality of life' an increase in the surpluses is required… or a redefinition of 'quality'. A bit like North Koreans being told they have never had it so good.

Historically there have been exceptions to this basic rule – a surplus of plague being one example.

[Roman Emperor Marcus Aurelius, who famously said "Our life is what our thoughts make it" got to name his plague… posthumously]
Posted by WmTrevor, Tuesday, 18 March 2014 6:02:17 PM
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A businessman should be able to briefly and clearly explain exactly why business of running a country is not moving ahead as it should be, especially with all the economic data and business knowledge that now exists.

And why is science and innovation not on national business agenda these days?

As for Pericles questions;
<<Which part of GDP increases when disease increases?>>
The total of GDP increases due to all the medicine and supplies and food manufactured locally.

<<Where does the money come from, to pay the doctors and nurses?>>
Insurance companies pay for some, big dollars for big specialists for those who can afford health insurance.

<<If everyone becomes sick, what happens to GDP - does it increase, stay the same, or decrease?>>
Everyone is never sick at the same time. It does not happen. GDP will always continue up and down somewhere.

It would be nice to "walk the talk" with some innovative and productive new ideas involving local supply and export
Posted by JF Aus, Tuesday, 18 March 2014 7:08:42 PM
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Pericles, I see nothing in your two links to indicate that it << is a complete and utter fallacy >> that illnesses, disasters, car accidents and the like add to GDP.

What I do see is that GDP is, as you say: a measure of all the goods and services produced domestically.

More illness, accidents, floods and fires – all of this creates a demand for more goods and services than there would otherwise have been. They add to GDP.

<< Which part of GDP increases when disease increases? >>

C, I & G. Consumer spending, Investment made by industry and Government spending.

<< Where does the money come from, to pay the doctors and nurses? >>

The money for extra doctors and nurses comes via government from the tax base. That’s G.

<< If everyone becomes sick, what happens to GDP - does it increase, stay the same, or decrease? >>

Your habit of projecting examples to the end of the spectrum, which way beyond the realms of possibility, really just doesn’t work for me. You are basically trying to make a logical point out of an entirely illogical situation!

continued
Posted by Ludwig, Tuesday, 18 March 2014 9:16:12 PM
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GDP, however you define it, becomes some actual money that you can
use to lend either directly or via banks etc to build further business and
or purchase goods. However you also use that money to buy energy.
Increases in the price of that energy does not leave money available
for the other purposes and the result is zero growth.
If governments try to overcome that money shortage they borrow or print
money (pixel money), they are attempting the impossible and their
demand for extra just drives up the price further or the expansion is abandoned.

I believe the previous government tried to drive growth by borrowing money.
It can't be done unless you can outbid other countries for energy.
Posted by Bazz, Tuesday, 18 March 2014 9:53:51 PM
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If more people are getting sick, then some of them who would be working would not be able to, or less so. This would reflect negatively on GDP. But would it reflect negatively to the same or greater extent as the positive effect on GDP that results from more doctors, as well as more hospitals, medicines, and all sorts of other accompanying stuff?

I would think that the additions to GDP derived from increasing medical activity would well and truly outweigh the losses due to any increase in people needing this sort of service.

Now, let’s again turn to the issue of population growth. This adds to GDP, again via the C, I & G components. And it does it big time! Our super-high immigration rate makes an enormous difference to GDP! And yet all this C, I & G serves the new residents, almost entirely. It does very little for the pre-existing residents. So it is an example, indeed the prime example, of something that adds to GDP but doesn’t add positively to our real economic prosperity, average per-capita prosperity, quality of life or future wellbeing.

Sorry Pericles, but I think that your assertion that things like illness and disasters (and presumably population growth, although you’ve steadfastly avoided discussing this issue) add to GDP is a complete and utter fallacy, is a complete and utter fallacy!
Posted by Ludwig, Tuesday, 18 March 2014 10:03:30 PM
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Hey, I tried.

“We'll be saying a big hello to all intelligent lifeforms everywhere and to everyone else out there, the secret is to bang the rocks together, guys.” Douglas Adams
Posted by Pericles, Tuesday, 18 March 2014 10:47:50 PM
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