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Why is it so hard to understand this!?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Nov 3rd, 2014 at 12:05:43 PM EST
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Because there's an ideology that wants a return to a "simpler" age and is willing to defend its inevitabily.
by Colman (colman at eurotrib.com) on Mon Nov 3rd, 2014 at 12:12:51 PM EST
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As usual, the intelligence and facts are being fixed around the policy...

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Nov 3rd, 2014 at 12:15:52 PM EST
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Is there really, though (I mean significantly so - a couple of odd people can always be found)?

Much of what constitutes GDP no longer adds real value. Yet we work ever longer hours and wreck ever more of our ecology to keep increasing it. Pointing out that absurdity is hardly an ideology wanting to return to a simpler age.

By all mean have that massive program, I've been calling for it for years. I still reckon that consumption would better drop in the West if we are going to have a fighting chance.
Actually, forget that: even with this, I don't believe that there is any chance at all to get the needed reduction in environmental impact in time, so there will need to be active restoration for decades or even centuries down the line.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Mon Nov 3rd, 2014 at 01:06:09 PM EST
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We're confusing real material impacts with GDP which is a purely monetary measure.

Sure, we'll be poorer in real terms or we will see inflation in the prices of, say, fossil energy. But who cares?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Mon Nov 3rd, 2014 at 01:07:43 PM EST
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I think a significant part of the creation of the Church of GDP was driven by the conscious policy, at least here in the US, to sever as much of the population from the land as possible.  Land became corporate, food became an industrial product, and the food on your table became just another buy-in of the consumerist creed to drive GDP.
by rifek on Sat Nov 8th, 2014 at 10:16:08 PM EST
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Why is it so hard to understand this!?

Three things:

  1. "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!". Add to those numerous beneficiaries of the fossil fuel industry those who actually do understand the problems with continued reliance on hydrocarbons but don't care about the consequences and go to great efforts to deny and spread uncertainty about the problem. This leads us to:

  2. The massive PR campaign funded by these people and the stultifying effect it has had on public opinion. This is buttressed by the deliberate strategies employed to make politics repugnant and drive down participation and all of the hot button 'social issues' such as abortion, gay marriage, gun control, etc. which has served to distract and divide in addition to polarizing. This brings us to:

  3. The whole structure of 'inverted totalitarianism' that has grown up in the USA but which has been 'globalized' right along with its chief instrument - financialization. The USA and the UK have the improved, post-modern apparatuses of a pre-WWII totalitarian state such as Nazi Germany or the Soviet Union, but without a supreme leader. Instead we have a vastly improved form of oligarchy where the individual players in the political system are irrelevant and replaceable and power is exercised by corporations through the financial sector and through the military/security state/mainstream media complex. The top leadership positions in this oligarchy are similarly replaceable and the potential candidates are sufficiently aware of the common interests of the oligarchy so as to create a stable system.    


"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Nov 3rd, 2014 at 01:20:42 PM EST
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by Metatone (metatone [a|t] gmail (dot) com) on Tue Nov 4th, 2014 at 05:07:41 AM EST
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Any interpolation is an approximation. Corrections could go both ways, or be barely significant.

The question of how much energy or carbon emissions does growth require is a fair one. Surely, marginal efficiency improvements while growing are possible. The whole world might repeat the Swedish feat of cutting emissions by 20% in 20 years, while growing by 60% (even if nominally). But ever marginal efficiency improvements do not mean that we can achieve a radically adequate target (even if wrong-headed, fuzzy-thinking opposition is out of the way). The Post-Carbon institute writes in the second reply to Krugman:

Paul Krugman and the Limits of Hubris -- Post Carbon Institute

Energy efficiency can often be improved, but such improvements are subject to the law of diminishing returns: the first five percent of improvement is cheap, the next five percent costs more, and so on.

In any case, the issue deserves more analysis and political discussion -- and wider demonstration of Swedish-type improvement.

by das monde on Tue Nov 4th, 2014 at 08:00:43 AM EST
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Efficiency scales badly -the first steps are often massively profitable, then zero cost, then increasingly more expensive, and subject to jevrons paradox in any case -

This does not hold true for just wholesale switching energy input into the economy. Building a hundred x - reactors, windmills, dams, whatever -is cheaper on a unit basis than building ten. So as long as the underlying resource is sufficient, no problems.

by Thomas on Tue Nov 4th, 2014 at 10:04:13 AM EST
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Because it's not actually true?

The official ET line is 'Do renewables, raise taxes to redistribute wealth, and everything will be fine."

Consider the possibility that perhaps there's more involved, and the post-war boom was created by a number of distinct circumstances that either don't apply now or only apply partially. Specifically:

  1. A relative energy glut leading to cheap energy. (I'll agree with the premise of the original piece here. I think it makes a difference - but I'll add that this not only makes economic activity possible, it also creates faith in the future, because it's possible to believe that your business isn't going to get the rug pulled out of it. It's much harder to believe that now, because the oil price crash is temporary and renewables aren't fully established yet.)

  2. Good local infrastructure that can make use of available resources. The US freeway system made it easier to think about shipping physical items nationally. Globalisation hadn't happened yet, so the economic activity stayed inside the US and Europe. This gave labour more local bargaining power, which raised wages. Now that globalisation has happened, labour competes internationally, which is very bad for everyone.

  3. A research-led culture in science and engineering, supported by trophy-project national policy (see also Manhattan Project, Internet, Concorde, the Space Program, and others). This is a huge deal. It was deliberately created during WWII, nurtured further during the Cold War, and then it was thrown away during the financialisation of the 80s.

  4. Low-hanging fruit in science and engineering. Aerospace, nuclear power, and computing (after Turing) were relatively accessible. Today we have quantum computing, which is hard, fusion, which is hard, and wacky hypothetical starship drives, which are somewhere between really, really hard and impossible.

  5. A compliant population inspired to consume by propaganda marketing. This is still true today. But because of the wage squeeze personal wealth has crashed for most of the population.

Bottom line is you need a combination of circumstances to create a boom. Spending tax money on its own probably won't do it, because the money will either flow out of the country, or it will end up pushing up prices of essentials (e.g. rents from property) without creating new kinds of economic activity.

There's certainly a case for Keynesian pump priming which can create infrastructure (physical and intellectual) that can sow the seeds for a boom in a decade or two. But it's not an instant fix, and it needs policy decisions that understand the return will take a while.

Obviously we've had the opposite of that, with financialised policies destroying future growth prospects. But I don't think throwing money at the problem ten years ago would have done any more than provided a quick and very temporary growth blip.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue Nov 4th, 2014 at 09:31:11 AM EST
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But why would we need a boom? Economically, that is. We need people to find valuable employment, which could be made easier by resource constraints (forcing a return to processes using more manpower in order to save on resources), and for people to have a decent standard of living, which in the West is purely a distributional issue: we produce more than we need, many times over.

Politically, it may be different. It is true that the only recent episode of major drop in inequality came on the back of a boom (although one has to be cautious with regards to the direction of causality there - probably both ways), or rather the bounce from an awful nadir.

But the point of the Keynesian program is not a boom -I do believe we need to reduce total consumption in the West- but for everyone to be employed and to address unsustainability. If we have a system that can only function with strong growth it is bound to struggle mightily (for example, when population starts dropping fast worldwide).

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Wed Nov 5th, 2014 at 05:54:19 AM EST
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Some say that the human nature is either to go up (learn, grow, advance) or to go down (slide, decline, weaken). A stationary phase is not appreciated.

With today's political economy, substantial growth is needed just to hide gaps between rentiers and the rest.

by das monde on Wed Nov 5th, 2014 at 06:06:08 AM EST
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Let's go up in quality.
It does not have to be in quantity.

Also, don't confuse human nature and the West. Egypt was going mostly sideways for millennia.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Wed Nov 5th, 2014 at 06:42:23 AM EST
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To even have a sensible conversation about this you need to redefine all your terms.

"Poorer in real terms", "reduce total consumption", "valuable employment" all sounds terrible if you're embedded within the prevailing worldview.

by Colman (colman at eurotrib.com) on Wed Nov 5th, 2014 at 06:49:51 AM EST
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The US economy has always been based on booms and busts, fueled by fraudulent financing that is eventually caught out.  It really doesn't know any other way to operate.  1946-1973 was a one-generation exception based on conditions that are gone and aren't coming back.
by rifek on Sat Nov 8th, 2014 at 10:29:06 PM EST
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