Sandwichman wrote: > The catch is: there is no such thing as "economic growth" and thus no way to > "measure" it. What happens rhetorically is that three figures of speech get > fused into a cliche and people then talk about the result as if its mere > familiarity of usage lends it concreteness.<
Who are these "people"?? They sound like strawmen and women to me. > Economy: there is no discrete economy apart from the way that people > arbitrarily agree to classify bunches of activities that are quite different > from each other while excluding other bunches of activities that are often > quite similar to some of the included activities. The economy literally adds > "apples and oranges" but not the apples I eat from the tree in my front yard. > ...< Capitalist economics has a very simple way to add apples and oranges: multiply the quantity of each by their price, to get money amounts spent on apples and oranges. Then these can be added. Since capitalistics is about market economies, it ignores the apples not sold (along with external benefits and costs). Is Tom saying that the market activity (exchange-value) described by this addition does not exist separate from other things? Is he saying that there's no difference between things sold and those not sold? > Growth: the economy doesn't grow. What expands or increases are the elements > that make up "the economy". Crops grow. Yields increase. But the value of > the yield can rise when the yield itself has decreased because the crops have > stopped growing. In the case of the aggregate economy, increases can occur > simply because of the unresolvable ambiguity of the distinction between > intermediate goods and final consumption goods. < I don't see how Tom can write about an "aggregate economy," since he rejected aggregation above. But no matter. If we can measure total exchange-value, then we can talk about growth in quantitative terms. It can obviously grow in money terms. If a half-decent measure of exchange-value that corrects for inflation can be found (like the current method of chain-weighting, for example), then we can talk about "real" growth. It's an estimate, but it can still grow, so we can talk about "growth." If we can measure exchange-value in terms of labor-values, the sum can grow. The "unresolvable ambiguity of the distinction between intermediate goods and final consumption goods" has generally been resolved by adding up the "value added" of the many sectors. It's an approximation, but that's the way the real world is: we can't measure anything in the real world exactly, except maybe in physics. That does not mean we should reject measurement -- even though the economy and other real-world phenomena are not as hard-core and exact as literary criticism is. > Moreover, our sense of growth is of an activity intrinsic to the thing > growing, but the enlargement of the economy is passive in that things are > added to it.< In psychology and physiology, it's usually "development" (not growth) that has an aspect which is "intrinsic to the thing growing." In contrast, I've never seen an economics article or book that used the word "growth" to refer to anything "intrinsic to the thing growing." I don't know where this idea comes from. With luck, Tom will us a reference. (It's more from Hegel than from anyone else. But how popular is Hegel these days?) > Measurement: what is measured is NOT economic growth. It is a proxy. You can't measure economic growth because "the economy" doesn't actually "grow".< So, isn't it better to have a proxy rather than to avoid talking about it altogether? If we can't talk about "growth," how can these people talk about "de-growth"?? if we can't talk about "growth," how can people like the Sandwichman oppose it? > Any alternative index one could propose for "prosperity" or "progress" would > meet the same objection but with the additional disadvantage of not having > already become enshrined by usage.< Since this is written in an unclear way, I have to _guess_ that this is a reference to the "Genuine Progress Indicator" (and its ilk). The GPI does have a problem, one worse than with GDP, as I've mentioned before. While GDP represents an effort to measure exchange value (which, in principle, can be measured), the GPI is an effort to measure "use-value," which cannot be measured very well at all (since the use-value of each item differs according to different individuals' perspectives) and then add them up using shadow (i.e., imaginary) prices. However, as I've said before, the contrast between the GPI and GDP is useful as a way to point out what the latter leaves out. It should always be mentioned, of course, that there are measurement problems associated with each. > It's like making up a more modern, "rational" religion with more relevant > rituals. Why bother? At least part of the appeal of religion and ritual is > their mystery and incomprehensibility. A large part of the appeal of GDP and > the myth of economic growth is that they exempt people from having to address > the essential incommensurability and contentiousness of a way of life > purportedly built on the principle of market transactions. < I'm sure that the folks at "Redefining Progress" (who calculate the GPI) would be a tad miffed by Tom's attribution of religious feelings to them. By the way, they see themselves as _critics_ of "economic growth" as normally defined (i.e., by real GDP). One might think that they'd be seen as natural allies of the "de-growth" people. > As a first step, the critique of economic growth is more or less compelled > to take "economy," "growth" and "measurement" at face value. People may > disagree with that critique but at least they will imagine they comprehend > it. < Again, who are these "People"?? are they made of straw? > The rhetorical critique I essay above is guaranteed to be met with indignant > howls of incomprehension, as if it is just too impolite to point out that the > whole edifice is built up on imagery (not to mention delusion) and not > substance.< Incomprehension? I comprehended it very well, thank you. If Tom wants to think that I'm "howling" in an indignant way, it's his privilege. (I'll join Alan Ginsberg's club, if he'll have me.) As far as I can tell, all that Tom's discussion does is to point out the well-known problems with index numbers and with economic measurement in general. So what's new, besides the lit-crit rhetoric? > When we talk about Wall Street or the Oval Office, we understand that we are > using metaphors to refer to the finance industry or the top levels of the executive branch of the federal government...< Isn't "the finance industry" is a metaphor? There really isn't a "finance industry," since the concept purports to add up a tremendous amount of diverse fruit, combining them is a totally untenable abstraction. There is no "finance industry." Instead, there are a large number of incommensurable activities involving the shuffling of paper -- and which are impossible to separate from the shuffling of paper done by "non-financial" corporations and the so-called government. To believe that a "finance industry" exists is simply a kind of religious activity. Instead, we should reject the very _idea_ of the "finance industry" and instead list all of the various individuals who _purport_ to be in that industry. Then maybe we can study there diverse characteristics to see if they really have anything in common with each other. (The "White House" is also an abstraction. We should instead list President Obama, Vice-President Biden, Speaker of the House Pelosi, etc., except those titles are mere metaphors and should be dropped.) Of course, in reality, I think that both "the finance industry" and "the White House" are useful abstractions that can help us understand what's going on. To reject the concepts is to go for intellectual anarchy. Abstraction is necessary to thought. raghu: >Excellent observations! ... which I think articulates a sharp disagreement with some PEN-Lers (Jim Devine) who want to keep the monotonic growth narrative alive but with some sort of happiness index replacing the GDP.< This is brave, raghu! You actually use my name rather than stooping to the straw-man method. Thanks. BTW, I do NOT wish to use some sort of happiness index to replace GDP. Not do I like the "monotonic growth narrative." Instead, my emphasis has been on _understanding what it means_.[*] My view has always been that: (1) Using real GDP to measure "economic growth" is really just measuring the growth of market activity (exchange value), even when corrected for inflation. It's not a measure of human welfare (assuming that such a thing can be measured). (2) However, most of us who aren't independently wealthy find that our very livelihood is affected by the vagaries of real GDP (even if we don't like it or deny that it can be measured or even exists). When it falls or even slows its growth below a threshold of about 3% per year in the U.S., suddenly jobs become less available and unemployment rises. Those who _are_ independently wealthy -- or even "middle class" -- discover that falling or slow-growing real GDP hurts the value of their assets (including houses) so that even they can suffer from hard (or at least harder) times. (3) The seeming fact that measures of happiness stop growing with real GDP after some minimal level (the "Easterlin paradox") suggests the validity of point (1). (4) The seeming fact that measure such as the Genuine Progress Indicator stopped growing in the 1970s and after in the U.S. also suggests the validity of point (1). (5) The only way to decide on what "true" economic grow is would be democratically. That is, the only way to decide if people are "better off than they were in the past" is with economic and political democracy. And even that would only be from the point of view of the limited set of people organized democratically. And I imagine that there would be minority opinions. > I can understand the attraction of the "eternal progress" narrative.< In contrast, I don't understand the attraction of the "eternal progress" narrative. Nor do I understand the attraction of the attribution of the attraction of the "eternal progress" narrative to others. By the way, science does not always advance. It sometimes gets stuck in cul-de-sacs or even goes backward (where "backward" is defined later, with the benefit of hindsight) or gets involved in building nukes and the like. Science can be corrupted, as in the pharmaceutical industry or financial engineering. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. [*] As I've said before, I think that the Lefts as we know them are in big trouble these days and I'm hoping that clear thinking helps. One thing we can do is to stop imagining the literary criticism can say much about economics or that economic thinking can say much about literature. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
