On 11/3/06, Walt Byars <[EMAIL PROTECTED]> wrote:
Then there is what Gerschenkeron and some institutionalists stress about economic growth not being *that* cumulative. There may be situations in which having lower growth may improve an economy's ability to have higher growth rates.
I'm not familiar with Gerschenkeron but perhaps I should be. The thing I've been mulling over for several months -- actually since encountering the notion of "time ecology" and Bucher's Arbeit und Rhythmus -- is that notions of cumulative growth may be, strictly speaking, irrational and ultimately catastrophic. There are many phenonmena that are quantitative and measurable but that don't have the particular property that more is necessarily better or even that less is better (infant mortality, poverty rates). I suspect that when cumulative growth is held up as an inherently good thing, the things that get done tend to get distorted in the direction of making the numbers bigger. This is the same thing on the macro scale as watering down milk or adulterating flour to make it weigh more. In a strictly arithmetic sense, a period of lower growth can contribute to a subsequent period of higher growth, percentage-wise, simply because it leaves a smaller base upon which to calculate percentages. But more fundamentally, I suspect that recessions may well foster underlying processes that don't count in GDP but nevertheless eventually contribute to economic dynamism. Just to give an example, let's say somebody who is laid off from employment uses the time off work in period 1 to acquire a new skill that is then used in period 2. According to the GDP nothing happened in period 1 and everything in period 2. -- Sandwichman
