The Derivatives of Wealth

The terms derivative and differential are used here in their mathematical sense, denoting rates of change.

Gross national product and living standard are treated as measures of quantity of wealth. In fact, they are not the quantity but its first derivative or first differential, the rate of wealth-throughput. The other first derivative is the rate of renewal of wealth. This rate varies from one resource to another.

If the rate of throughput is faster than the rate of renewal for every vital resource, as is the case in the world today, the world economy is in an unsustainable state. The throughput rate, the world level of economic activity, cannot continue indefinitely at its present level; still less can it go on increasing indefinitely.

The throughput rate must inevitably fall; how far or fast or in how many jerks it does so is not predictable with the same certainty. But however it happens, jobs will be destroyed and material living standards lowered.

Consider the resources for which the throughput rate is currently higher than the renewal rate: oil, gas and coal; fissionable uranium; arable land; potable water; marine animal life; all major metal ores; forests; biological diversity; oxygen-producing oceanic phytoplankton. Others could be listed.

Economic growth is currently taken to mean the rate of increase of wealth. Actually it is the rate of increase of the rate of throughput of wealth. It is the second derivative of wealth. It could be called throughput increase, TI for short.

So what really is economic growth?

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