Once upon a time "growth" was known as usury and was proscribed as a sin by the Catholic Church. To get around the canon law, merchant bankers charged "interesse" on purported late payments. A more complicated scheme incorporated a hidden interest rate into "bills of exchange," which were futures contracts for the purchase of foreign currency. Double-entry bookkeeping was adopted to keep track of these rather arcane financial instruments.
Today "discount rates" are incorporated into cost-benefit analysis of public investments, for example, projects for abatement of greenhouse gas emission. By convention, the discount rate is usually based on market interest rates. Essentially then, what the economists hail as "economic growth" is simply the real economy increase in output of goods and services needed to maintain liquidity of the financial expansion dictated by the discount rate. In other words, growth = discount rate = compound interest = usury is a tautology. It is true by definition. Martin Weitzman of Harvard has thrown a very large (infinitely), fat-tailed monkey wrench into the conventional cost-benefit analysis assumption of discount rates. His analysis has had a huge impact but so far there hasn't been an acknowledgement of the tautology I pointed out above. People still talk about decoupling growth from GHG emissions. In reality, if you decouple cost-benefit analysis from a market interest discount rate, "growth" becomes a meaningless term. On Mon, Oct 13, 2014 at 4:38 AM, Mike Ballard <[email protected]> wrote: > The endless pursuit of economic growth is making us unhappy and risks > destroying the Earth's capacity to sustain us. The good news is that > taking steps to make our lives more sustainable will also make us > happier and healthier. Would you like a four day weekend - every week? > > I've been to two conferences over the last year with similar basic > premises. The first was at the Australian National University on > ecological economics and the second, just last week, was on steady > state economics at the University of New South Wales. The premise > sitting behind both of these conferences is simple and undeniably true > yet undermines so much that is fundamental to our current way of life: > > We live on a finite planet. > > That's it. How, you might wonder, can such a simple statement of > obvious fact undermine the tenets of modern society? > > full: > http://www.theguardian.com/commentisfree/2014/oct/13/do-we-dare-to-question-economic-growth?CMP=soc_567 > > Mike B) > > -- > Wobbly times > http://wobblytimes.blogspot.com.au/ > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > -- Cheers, Tom Walker (Sandwichman)
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