Tag Archives: wealth
The direct addition of value inflation to the rate of price increases is quite small. The larger effect arises from secondary influences, in whose shaping human psychology plays an important part. These influences are triggered by the small value inflation component and its corollary, a slowing of the rate of net throughput increase relative to gross throughput increase. ... Read more
A subtle, indirect but nevertheless important further way in which environmental depletion damages economic health is through the extinction of species.
A particular species may not be throughput directly in the sense that a particular economic activity is based directly on that species. ... Read more
Achieving a sustainable world economy would be nothing less than a great step in human evolution, comparable with the mastery of fire or the development of settled agriculture as opposed to hunting and gathering. It concerns the whole world and needs to be tackled on a world, not just a national, basis. ... 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
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
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. The work not done as a result of the reduction in hours per worker was supposed to require the engagement of extra hands to get it done. ... Read more
In 1964, the ship Alkimos was wrecked on a reef off the coast of Western Australia at a time when our largest city, Perth’s, suburban sprawl had not reached that far. The ship was Greek but had a varied and colourful history, including on-board murders and criminal activity, under different names and flags. ... Read more
Structuring, or realising, wealth into goods and services is currently called production or output, as though wealth were being created. In fact, this structuring or realisation is part of the process of throughput of wealth.
The use of goods and services, now called consumption in the sense of being opposite to “production”, is really a subsequent process in the throughput chain whereby wealth is degraded into waste matter and heat whence it may be renewed. ... Read more
Before going on any further it is necessary to discuss the term aggregate demand.
Aggregate demand is the sum of two components – investment spending and consumer spending. It would be better if these were treated separately as independent channels through which money flows, since the relation between them is by no means constant in the sense that they can be lumped together and boosted or damped down together. ... Read more
This digression makes two further comments on the statement on weapons versus other expenditure in the UN report mentioned above. One may return to this post later and go straight on to the post “Discussion of Costs Resumed”, if desired.
The UN report statement also implies agreement with the conventional idea that economic activity is a process of accumulation of wealth. ... Read more