From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Thu Mar 01 2007 - 17:48:30 EST
Jerry, you asked: What statistical measure is a better indicator of economic growth than GDP? I do not have a quick answer to that, since I think the term "economic growth" refers not just to a quantitative increase in one variable, but to a process whereby the reinvestment of income leads to increased output, labour utilisation, assets and additional income. You cannot capture the process with just one indicator, you need a range of indicators referring to a set of relationships, just as human bodies do not simply grow upwards (in which case you could measure height) but also sideways and internally and so on. Output can be defined as physical output, or as a monetary output value calculated from sales and costs. But output of what? Around half of intermediate consumption in the US gross output consists of all kinds of services. A lot of these services supply straightforward commodity products, not personal services, even so, if the output of services increases, economic growth seems to increase. A commodity is a tradeable, alienable object, but not necessarily a net addition to material wealth (e.g. intellectual property). Credit economy creates the capacity to buy, use and consume what you haven't produced. In a historical materialist sense, we would focus on the net additions made to the stock of tangible physical assets in the domestic economy, either in physical quantities or in monetary values. If that stock increases, you have true economic growth. This is difficult to measure already. In the USA, if Budget reports are to be believed, that physical stock roughly doubled since 1980 in constant dollar terms, so that's real growth. But part of that growth is attributable simply to net imports of products and materials, not local production, though the two are intertwined. So then really you'd need to deduct the net imports from the additions to the domestic physical stock, to get a real understanding of the domestic rate of growth in an historical materialist sense. However such an approach is likely to be contested too, since we are supposed to be living in an "information society" or "knowledge economy" in which "human capital" and R&D expenditures are just as important. We know lots of things, so we are supposed to be rich. So, much depends on what you understand "wealth" to be. Bringing up the issue of poverty despite growth is not a joke - poverty for instance correlates strongly with lousy health, which correlates strongly with suicide. Of course, suicide bombers are currently in the news, but today (i.e. 1 March 2007) I read about a Dutch sample survey of adults aged 18-64 years, the results were just released under the auspices of the Trimbos Institute. The fatal suicide attempts in the Netherlands number about 1,600 per year, but annually 94,000 Dutch adults attempt suicide, and... wait for it, an estimated 410,000 people here at any time feel so down that they think of committing suicide (suicidal ideation). The total is 504,000, or 5% of the Dutch adult population, one in twenty Dutch adults have this problem. I have had that problem in the past. We have modest GDP growth now, we are a wealthy society, but just think of what would happen when you get sustained negative growth, shudder the thought. On Monday, August 18, 2003, the Japan Times reported the number of suicides in Japan in 2002 exceeded 30,000 for the fifth consecutive year, more than three times the number of deaths from traffic accidents. The high incidence of suicide was attributed mainly to the prolonged economic slump, where people no longer saw any way out. The annual number of suicides in Japan used to average about 20,000. Now suicide ranks as the sixth leading cause of death among all Japanese people. For people in their 20s and 30s, it is the leading cause of death. In addition to those who commit suicide, there are about 10 times more people who attempt suicide, that's about 330,000 people all told, and I'm not even talking about the total who engage in suicidal ideation, it could be 1.4 million if Dutch figures are anything to go by. The United States averages about 32,000 suicides a year ( about 1.3 percent or so of all U.S. deaths), but there are over half a million emergency department visits a year for self-inflicted injury; an estimated 17% of US students (one in six) in grade 9-12 suffer suicidal ideation and about 2.3% of those attempt suicide. Suicide is the eighth leading cause of death for all U.S. men and the third leading cause of death among young people ages 15 to 24. Why do we feel so bad, when we've never had it so good? That is the schizoid part of postmodernity. Nowadays I'm classified too as some kind of schizoid, yet I feel very in tune with reality anyhow. The challenge is to live healthily and enjoy life, even although you can observe human rot all round... growing in a balanced way in a very unbalanced world, helping others to do so if you can. Jurriaan
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