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November 10, 2008

The Thing About GDP Economy

The thing to keep in mind whenever somebody talks about GDP (via AngryBear):

Unfortunately GDP figures are generally used without the caveat that they represent an income that cannot be sustained. Current calculations ignore the degradation of the natural resource base and view the sale of non-renewable resources entirely as income. A better way must be found to measure the prosperity and progress of mankind.

— Barber Conable, former President of the World Bank, 1989

Economists treat that as a minor quibble, but nothing could be more fundamental.

People look at those graphs of rising GDP and naturally assume good things are happening. But there's more to it. As I wrote a while back:

Just came across a great phrase from Al Gore: we're "operating the planet like a business in liquidation". Liquidating everything, using it up as fast as we can, last one out lock the door. Except there is no "out".

The bottom line on sustainability: unsustainable = stupid. Fatally stupid. Suicidally stupid. Pretty much by definition, when you stop and think about it. Sustainability is the fundamental requirement for long-term survival. Anything else is sawing off the limb we're sitting on — and there ain't no net.

GDP, like a lot economic abstractions, blinds us to reality. But of course we want to be blinded — otherwise it wouldn't be so easy.

Time to see clearly.

Posted by Jonathan at November 10, 2008 11:36 PM  del.icio.us digg NewsVine Reddit YahooMyWeb

Comments

GDP = Gross Destruction of the Planet

Posted by: Dave Moorman at November 11, 2008 10:00 AM

How much of our GDP is dependent on war, crime and disease?

Any calculation that places these on the positive side of the sheet seems deeply flawed.

Posted by: Kent at November 11, 2008 11:58 AM