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The Forum > Article Comments > Stiglitz broadens the horizon > Comments

Stiglitz broadens the horizon : Comments

By Allison Orr, published 8/7/2014

Instead, Stiglitz argues that we need new, better, more sophisticated metrics to measure our economies, metrics that consider the real cost and value of things.

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Yes indeed we need to measure things better. The thing that we most need to measure is the opportunity cost of Government intervention. Regulation soaks up time of the regulated people; it forces costs to grow for no benefit, divertign resources from adding value to destroying value.

The force for destruction of Government regulation is appallingly huge and impossible to measure. The value of choices not taken is always imaginary.

Now when we look at the article above, we find a cacophony of dim leftist ideas. We used to think we had to trade equality for growth? Bollocks. Only Marxists though that and they are responsible for 120 million dead in the last 100 years. Seek out their ideas and ignore them.

Inequality is the direct result of any human action. Manufacturing a pants-wetting moral outrage because an individual earns more than another is a destructive side-track. We should shun and deride these stupid ideas.
Posted by ChrisPer, Tuesday, 8 July 2014 8:54:46 AM
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<<..The second major/roadblock you have is this concept
that GDP is somehow used as a forecasting tool...It is not...It cannot be.>>

GDP is designed*to measure/the market value..
[of production/that flows through..?]
in 1944,
GDP became the main tool for measuring a country's economy.

Ahead of Rio+20, the need to (finally) go beyond GDP
has grown stronger.

This was also acknowledged in
the “zero draft” negotiation document,
which in January 2012 claimed to “recognise the limitations of GDP as
a measure of well-being” and suggested to “develop and strengthen indicators complementing GDP that/integrate economic, social and environmental dimensions in a balanced manner”.

New ways of measuring progress and wealth could mean true progress for sustainability, because what we\measure affects what we do, and if our measurements are flawed, decisions get distorted.

GDP was never meant to be a measure of well-being or development. It’s an indicator that grows by the\number of car crashes, purchase of private guns, funerals, loss of primary forests, overfishing, and so forth. It\also doesn’t account for the impacts our current choices will have in the future, which is a key question for

Yet, a myopic focus on GDP growth has been –
and still remains – at the core of what human
development is perceived to be by political leaders.

The criticism of GDP is as old as the tool itself,
but the economic crisis – coupled with looming resource
scarcity and multiple environmental challenges – has created new momentum for adopting better\measurement tools and going “beyond GDP”, a slogan frequently used today even by the World Bank.

The/UN, OECD, UNEP and others are all developing and testing different measuring tools.

<<>.Put together, these demonstrate clearly that you are unable to grasp the simple fact that GDP is a measurement tool of the general prosperity of our nation. >>


<<..Higher is therefore better>>

double up till ya win

lets talk of special drawing rights/
[the unspoken/new world currency*]

lesT we forget/the secreT bailouts/
too bIg to fail/ONLY got bigger/DEFAULTS.
Posted by one under god, Tuesday, 8 July 2014 9:58:46 AM
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Great article Allison.

GPD and per-capita GDP are terribly simplistic indicators, and yet they are practically worshipped by our silly politicians and their economic advisors.

You can see why – because it plays directly into the hands of the big business fraternity, which has a vested interest in pushing for ever-more growth and hence an ever-larger GDP. You know – the same big biz fraternity that gives big donations to political parties and has enormous sway over the whole political process.

And to this end, they have a vested interest in making GDP seem as good as they possibly can, by including in it all manner of economic activity which simply doesn’t advance prosperity and hence shouldn’t be included.

Stuff like economic activity due to the recovery effort after cyclones and floods, and which is due to road accidents and illness, and which is due to the duplication of basic services and infrastructure for the ever-rapidly-growing population. All of this is neutral, and should NOT be included in GDP, which makes it all out to be positive economic growth that is advancing our national prosperity!

As a result of this highly dodgy GDP measure, per-capita GDP is also highly dodgy. It is constantly increasing, suggesting that our very rapid rate of population growth is good for us.

But if GDP didn’t take into account all the neutral economic activity, and did take into account the reducing stock of our non-renewable and potentially renewable resources, and the ever-increasing rate of draw-down on them, plus a whole bunch of other real-world things, then there is no way that we would be seeing a progressively increasing per-capita GDP.

We do indeed need a much more realistic main economic indicator, and we need to take much more heed of a bunch of other indicators, which either don’t exist at all right now, or are treated far too lightly by our pollies and their ‘pseudoeconomist’ buddies.
Posted by Ludwig, Tuesday, 8 July 2014 10:15:43 AM
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The actual measure of a nation's worth, is the way it treats the most vulnerable.
And given the so called Christians taking leading roles, (Rudd, Abbott)another similar factor enters the equation.
Insomuch as you treat the least among you, you also treat me, sayeth the Lord!
Stiglitz uses tiny resource poor Norway, as his ideal example, as how to run an economy for the nation and not just as a cold mindless exercise. The economy and the government should serve the people, not visa versa!
They had a once only boost in their finances, due to North sea oil, and simply used it, to build a huge sovereign fund, that already is serving that nation, even as it grows larger.
And he measures their progress on a general happiness index, rather than the GNP.
We could do so much better by giving our available welfare to those who need it, rather than the already well off, who don't.
The first effect of improved welfare/poverty reduction, would be increased discretionary spending.
Which would result in increased business, increased inventory holdings, and increased manufacture, which would benefit us all.
As the mining boom starts to go backward, as seems to be happening now, we should be rolling out increased housing stocks, which would replace the mining projects no longer growing our economy.
This would require us to kill of some sacred cows, like negative gearing, which has done just the opposite, to predictions, by some so called economists/property developers/real estate kings?
We also need to embrace huge tax reform, that no longer allows avoiders to avoid.
Which as policy, would also be expansionary!
It's time to explore new options and new ideas!
I mean, repeating the mistakes of the past, or just not learning the lessons of history, is simply not an option, neither is continuing the fire sale of our economic sovereignty!
We need to remain cognizant of what really crueled the Celtic tiger and Spain's once burgeoning economies; namely, foreign speculation in the domestic property market! No ifs, buts or maybes!
Posted by Rhrosty, Tuesday, 8 July 2014 6:16:18 PM
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Dear Rhosty,you need to put a bandage on your foot. Norway is not resource poor. It is actually oil rich, and has a trust fund which it uses to fund its social welfare expenditures. I didn't read anything after that I'm afraid. Such an egregious mistake didn't bode well for the rest.
Posted by GrahamY, Tuesday, 8 July 2014 10:09:39 PM
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I would agree with the author and with Stiglitz regards GDP.

Attempts to continually increase GDP (which is misnamed as “growth”) can easily lead a country over a cliff.

There is the Genuine Progress Indicator (GPI) that some countries have now included in their National Accounts.

I don’t know if this figure is being prepared in Australia anymore, although it was some years ago, and it seemed to indicate Australia peaked sometime in the 1970’s to 1980’s.

Various amounts of anecdotal evidence would also indicate this to be true, and Australia has actually been in decline over the last 30 to 40 years.

Governments such as ours keep spruiking GDP, and also the Human Development Indix (HDI).

Australia does well in HDI, but a look at this graph shows we achieve a high HDI by consuming our natural resources, and our ecological footprint is now one of the worst in the world.

But wait, there are countries that have nearly the same HDI as ours, but have almost half our ecological footprint.

If I was objective, (which I try to be), I would immediately deduce that Australia is being wasteful of its natural resources, and will often chew up its natural resources for little or no gain.

So if we just continue with GDP and other figures such as the HDI, we can become so wasteful of our resources we will eventually become very impoverished.

Ironic, but a very sad place to be.
Posted by Incomuicardo, Wednesday, 9 July 2014 10:34:33 AM
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