A more accurate definition of economic growth would be any change in the relation between the throughput and renewal rates, for a given resource for which throughput exceeds renewal, in which change the ratio of the throughput rate to the renewal rate falls, or conversely the ratio of renewal to throughput increases. ... Read more
People love their children, and children generally are a source of pleasure. Some people even claim to derive deep satisfaction from a houseful of seven or eight youngsters. But it is true to say of most people regardless of ethnicity or location that, if they had a really free choice, they would rather have a manageable number – enough for pleasure and company – but not the heavy load of six to a dozen or more. ... Read more
Litter “Pollution”: A misleading idea, started when environmental awareness really took off world-wide in the late 1960’s and early 1970’s, is that “pollution” means “litter” and that preventing litter means doing all that’s necessary to prevent pollution and protect the environment. ... Read more
Material living standards are a function of three main variables – net throughput (Tn), population, and the prevailing distribution (D) of Tn among different social and occupational groups.
Tn is a function of available wealth, the state of technology, wealth renewal rates, human values, D and the proportionate flow of money through different economic channels. ... Read more
Partial Accounting: Another spurious “cost” often used as a basis for policy appears as a result of partial accounting. An urban public transport service might be reduced or eliminated on the grounds that the costs of the service are nowhere near covered by passenger fares, and that costs can be reduced and the nation or city thereby enriched by cutting the service. ... Read more
I was asked recently if I thought that American dominance of the world was over, if America would decline like other great powers before it, and what nation would take its place.
I replied that the old idea of a nation becoming ‘great’ and ‘wealthy’ by hugely increasing its consumption and getting control of other nations to keep its own consumption growing, had always been part of human history, but would be quite inappropriate for the future. ... Read more
The factor of people’s expectations, left out of this discussion so far, would change the outcome somewhat.
The effect of rising expectations would be to stop the “boom” and return to “stagflationary” conditions sooner than if resource depletion alone were the depressing factor. ... Read more
The world economy isn’t working as well as it should and could. Some countries that enjoyed for some years near full employment, low interest rates, and a bearable rate of price increases, with fast-rising material living standards, all achieved without anything like current high levels of government and private debt, do so no longer. ... Read more
Good Trends, Not Good Conditions
It is not the intention in this blog to establish a perfect world of perfect conditions. Such a thing has been imagined and described by many in the past, but it must always remain an abstract possibility in the indefinite future. ... Read more
The Mitterand socialist government in France during the 1980’s hoped to create tens of thousands of jobs by cutting working hours. The basic working week was to carry the same pay, therefore each hour worked was to carry more pay. ... Read more