Oh please, Ludwig.

>>We have agreement that negative things such as bushfires do indeed get added to or get included in or contribute to GDP.<<

No, we most certainly do not.

We can agree on the "included" and the "contribute to", but we disagree fundamentally on the "added to", in the sense that this indicates an overall increase. The economic activity associated with bushfires does not increase GDP, it is included in GDP.

>>Things that should appear on the negative side of the ledger appear on the positive side.<<

That is simply nonsensical. There is no "negative" and "positive" side of the ledger. It is a single column that gives a total.

>>...negative events and their resultant economic activity shouldn’t appear as positives in our primary economic indicator.<<

See above. Economic events are economic events. Full stop.

>>...when it does get spent, it gets spent on things that should contribute positively to GDP and things that shouldn’t<<

What it gets spent on is totally irrelevant. You seem to be confusing the simple, one-dimensional measurement of GDP with the concept of unit productivity (look it up). It is only the fact that it gets spent that requires it to be measured, not whether it is spent wisely. Which is why bushfires will eventually reduce GDP, not increase it. And why borrowing from the Bank to invest in new plant and machinery has the capability of increasing it. Eventually.

>>...in light of our current well-focussed and amicable discussion, it is I think the right time to revisit it.<<

Perhaps.

But it would be pointless, if you cannot understand why you are so completely off-target when you say that "Bushfires etc increase economic activity, all else being equal." And at the same time rid yourself of the notion that there is somehow "good" GDP and "bad" GDP.

<< We can agree on the "included" and the "contribute to"…>>

Excellent! Pericles, I think that is big step forward.

<< There is no "negative" and "positive" side of the ledger >>

YES!! Correct. All economic activity regardless of the whys or wherefores goes on the GDP tally, which appears as a positive indicator of economic wellbeing. Things that should count against GDP or which are neutral are added to it. There is no negative side of the ledger. All economic activity resulting from negative things appears as a positive contribution to our economic wellbeing.

<< Economic events are economic events. Full stop. >>

YES!! According to those who worship GDP! They can’t even conceptualise negative economic activity!!

, << What it gets spent on is totally irrelevant >>

YES!! As it concerns the GDP calculation, what the money that gets spent on bushfires would have otherwise been spent on is irrelevant.

<< It is only the fact that it gets spent that requires it to be measured, not whether it is spent wisely. >>

YES!!

<< Which is why bushfires will eventually reduce GDP, not increase it. >>

YES!! Of course disastrous events like this reduce economic wellbeing. But GDP for the term following a fire, during the recovery phase, when economic activity generated by that fire contributes to it, would suggest otherwise.

So, what is it that we actually don’t agree on?

It seems to only be this new distinction of yours between ‘included in’ and ‘added to’.

You only introduced this yesterday.

I think it is a complete furphy. They amount to just the same thing!!

Now, regarding the population / GDP connection, I wrote:

>> You have said that growth can’t go on forever. But GDP would have us and our wondrous pollies, pseudoeconomists and big bizzos pushing for rapid expansion for ever more…. completely regardless of all the enormous negative factors that accompany it. <<

Do you agree that no matter how huge the negative factors related to population growth became, GDP would still indicate that high pop growth is a good thing?

to Alan Austin and others,

Idiots all talking of GDP and population size etc.

Besides, if it was ONLY about population size and growth rates then what is the story with Indian and China?

Going a step further than that, why hasn’t even Japan and South Korea YET blossomed as much as any original western culture?

I mean considering that Japan and S. Korea have been wealthy for some time now and they at least (unlike their more recent Asian economic bloomers) have managed to overcome poverty.

However in areas like legal ethics and equality rights etc., racial prejudice and other kinds of group oppression, Japan and S. K. are not yet even at the start line compared with say Australia.

Take Japan -

we can increase the number of people in the nation as much as we want but unless we have a parallel developing advancing legal and ethical culture with the population increase, we will NOT end up with a copy of some European descended culture now a “western nation” (e.g. Australia, UK, Germany, France, Sweden, etc.) as should be abundantly clear from the examples of India and China who are refusing to allow the economic benefits from their massive worker base to fairly trickle down to the poorest (especially in India).

And if anyone needed more convincing look to Japan and S. Korea where they may have overcome poverty but they are yet to even give a hint of thought to legal/ethical matters to deal with racism, prejudice and basic consideration for the “other”.

e.g. Japan had S. Koreans imprisoned in WWII some who had kids in Japan and some still live in Japan, yet Japan does not allow these people to be citizens.

Also neither of those nations has any concern with global humanitarian issues and do not take in refugees and immigrants even though they have extreme wealth etc., whereas smaller and poorer nations like Finland and Sweden take on so many immigrants and refugees that their demography (like ours in Aus) has altered over 50%.

That's the question, Ludwig.

>>So, what is it that we actually don’t agree on?<<

It is blindingly clear - to me at least - that this is what we disagree on, right here.

You first referred to:

"Bushfires, car accidents and crime waves all increase GDP".

Which came from your "Wellbeing Manifesto".

Then you repeated it, just to make sure.

>>It really is very simple: Bushfires etc increase economic activity<<

And even now, you clearly still don't get it.

>>But GDP for the term following a fire, during the recovery phase, when economic activity generated by that fire contributes to it, would suggest otherwise.<<

Until you can see how wrong that is, you won't be able to understand anything to do with the economy whatsoever.

>>It seems to only be this new distinction of yours between ‘included in’ and ‘added to’. You only introduced this yesterday<<

Exactly. It was when I tried to point out that you kept using "added to" when you meant "included in".

Your position was that we first have one number for GDP, then when we have bushfires, another number is added to it. Which, I hope you now understand, is nonsense.

Which really sets the tone for the entire "Manifesto".

OK Pericles, it is pointless continuing with this particular line of discussion.

I thought we might be getting near agreement, but alas, it ain’t gunna happen.

It seems to that a lot of things you say are at odds with your bottom line.

I found a whole bunch of things that we seem to agree on, as per my last post, and yet we still have a fundamental disagreement.

It is simply incredible that you can completely bag things like the wellbeing manifesto and genuine progress indicator, uphold GDP as a sensible construct and don’t see any problem with our very high immigration intake and resultant rapid population growth at least for a long time to come.

I tried to move the debate forward to how GDP relates to population growth. I asked you a direct question, but you have avoided it completely.

Why?

Throughout our long history of discussions on this forum, I’ve had to really press you to respond to basic questions numerous times.

This is a critically important point: GDP increases as the population increases, all else being equal or of small variation. This misleads us into thinking that the economic growth generated by population growth is entirely a good thing, with completely no regard to the very considerable negative factors caused by that population growth.

Then as population becomes so large that it overwhelms our basic resources and skittles our quality of life, the economy will really suffer and annual increases in GDP will presumably be smaller, or it will stagnate or perhaps even fall, even if we continue to have population growth.

What we need is a realistic indicator that will demonstrate the approaching problems with the supply of resources, goods, services and infrastructure compared to the ever-increasing demand…. and not mislead us into a false sense of security and then tell us far too late that something is wrong.

So, back to my question:

Do you agree that no matter how huge the negative factors related to population growth become, GDP would still indicate that high pop growth is a good thing?

True enough, Ludwig.

>>I thought we might be getting near agreement, but alas, it ain’t gunna happen.<<

From the moment you asserted that "bushfires etc increase economic activity" we were bound to disagree.

Note, that I am not considering whether or not GDP is good or ill, merely observing its nature. You insist on confusing what GDP is, with your views on what it is used for.

>>It is simply incredible that you can completely bag things like the wellbeing manifesto and genuine progress indicator, uphold GDP as a sensible construct...<<

The Wellbeing Manifesto has nothing whatsoever to do with the calculation of GDP, nor has the fact that I "bag" it.

The Genuine Progress Indicator is, as I pointed out, an entirely subjective view of the world. Again, totally irrelevant in the context of GDP, which at least measures a reality, whether you like that reality or not.

>>This is a critically important point: GDP increases as the population increases, all else being equal or of small variation.<<

Quite often, it does, but not necessarily. The key is whether GDP per capita increases also. If it does (and it does) then at least people are better off in one dimension - that is, financially.

>>Then as population becomes so large that it overwhelms our basic resources and skittles our quality of life, the economy will really suffer and annual increases in GDP will presumably be smaller<<

That is indeed one scenario. There are, however, others that are equally likely outcomes. You are simply taking the most pessimistic view, and extrapolating from that.

>>Do you agree that no matter how huge the negative factors related to population growth become, GDP would still indicate that high pop growth is a good thing?<<

Raw GDP is not the measure I would use, since it sees only one dimension. What I would use is per capita GDP, where a decrease could indicate problems looming.

However, if we are able to keep increasing GDP per capita, at the very least we know that there are the economic resources available to tackle any peripheral issues.