{"id":61629,"date":"2022-01-25T12:19:01","date_gmt":"2022-01-25T17:19:01","guid":{"rendered":"https:\/\/olduvai.ca\/?p=61629"},"modified":"2022-01-25T12:19:01","modified_gmt":"2022-01-25T17:19:01","slug":"220-the-human-factor","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=61629","title":{"rendered":"#220. The human\u00a0factor"},"content":{"rendered":"<header class=\"entry-header\">\n<h3 class=\"entry-title\"><a href=\"https:\/\/surplusenergyeconomics.wordpress.com\/2022\/01\/21\/220-the-human-factor\/\">#220. The human\u00a0factor<\/a><\/h3>\n<\/header>\n<div class=\"entry-content\">\n<p><strong>CONTINUITY, CONTRACTION OR COLLAPSE<\/strong><\/p>\n<p id=\"over-an-extended-period-but-with-growing-intensity-in-recent-times-there-has-been-a-discussion-here-and-elsewhere-about-whether-we-can-prevent-economic-contraction-from-turning-into-collapse\">Over an extended period, but with growing intensity in recent times, there has been a discussion, here and elsewhere, about whether we can prevent economic\u00a0<em>contraction<\/em>\u00a0from turning into\u00a0<em>collapse<\/em>.<\/p>\n<p id=\"this-is-part-of-a-broader-debate-in-which-every-point-of-view-seems-to-begin-with-the-letter-c-the-orthodox-or-consensus-line-is-continuity-meaning-that-the-economy-will-continue-to-expand-in-the-future-as-it-has-in-the-past-and-is-claimed-still-to-be-doing-in-the-present-the-main-contrarian-theme-is-the-inevitability-of-collapse-those-of-us-who-believe-even-in-the-existence-of-a-third-possibility-contraction-are-in-a-tiny-minority\">This is part of a broader debate in which every point of view seems to begin with the letter C. The orthodox or consensus line is\u00a0<em>Continuity<\/em>, meaning that the economy will continue to expand in the future as it has in the past, and is claimed still to be doing in the present. The main contrarian theme is the inevitability of\u00a0<em>Collapse<\/em>. Those of us who believe even in the\u00a0<em>existence\u00a0<\/em>of a third possibility \u2013\u00a0<em>Contraction<\/em>\u00a0\u2013 are in a tiny minority.<\/p>\n<p id=\"of-these-three-points-of-view-the-only-one-that-we-can-dismiss-is-continuity-the-economic-growth-that-we-re-told-can-be-extended-indefinitely-into-the-future-isn-t-even-happening-in-the-present\">Of these three points of view, the only one that we can dismiss is continuity. The economic \u201cgrowth\u201d that we\u2019re told can be extended indefinitely into the future isn\u2019t even happening in the present.<\/p>\n<p id=\"most-roughly-two-thirds-of-the-reported-growth-of-the-past-twenty-years-has-been-cosmetic-the-preferred-metric-of-gross-domestic-product-gdp-measures-activity-not-prosperity-if-we-inject-liquidity-into-the-system-and-count-the-use-of-that-liquidity-as-activity-we-can-persuade-ourselves-that-the-world-economy-has-been-growing-at-rates-of-between-3-and-3-5\">Most \u2013 roughly two-thirds \u2013 of the reported \u201cgrowth\u201d of the past twenty years has been cosmetic. The preferred metric of gross domestic product (GDP) measures\u00a0<em>activity<\/em>, not prosperity. If we inject liquidity into the system, and count the use of that liquidity as \u2018activity\u2019, we can persuade ourselves that the world economy has been growing at rates of between 3% and 3.5%.<\/p>\n<p id=\"the-classic-illustrative-example-is-of-a-government-paying-one-large-group-of-workers-to-dig-holes-in-the-ground-and-another-group-to-fill-them-in-again-this-adds-no-value-of-course-but-it-does-increase-activity-and-therefore-boosts-gdp\">The classic illustrative example is of a government paying one large group of workers to dig holes in the ground, and another group to fill them in again. This adds no value, of course, but it does increase activity, and therefore boosts GDP.<\/p>\n<p id=\"in-this-example-the-obvious-question-is-that-of-how-the-government-pays-for-all-this-zero-value-activity-the-simple-answer-is-to-use-borrowed-money-conveniently-gdp-as-a-measure-of-activity-calculates-flow-without-reference-to-stock-this-sleight-of-hand-has-persuaded-many-that-their-national-economies-have-now-recovered-in-full-from-the-coronavirus-downturn-a-claim-that-is-only-valid-if-changes-in-the-stock-of-government-and-broader-liabilities-are-left-out-of-the-equation\">In this example, the obvious question is that of how the government pays for all this zero-value \u2018activity\u2019. The simple answer is to use borrowed money. Conveniently, GDP, as a measure of activity, calculates flow\u00a0<em>without reference to stock<\/em>&#8230;<\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>#220. The human\u00a0factor CONTINUITY, CONTRACTION OR COLLAPSE Over an extended period, but with growing intensity in recent times, there has been a discussion, here and elsewhere, about whether we can prevent economic\u00a0contraction\u00a0from turning into\u00a0collapse. This is part of a broader debate in which every point of view seems to begin with the letter C. The [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[150,32542,6662,195,353,4549,391,9566,32541,32540,31314],"class_list":["post-61629","post","type-post","status-publish","format-standard","hentry","category-economics","tag-collapse","tag-continuity","tag-contraction","tag-debt","tag-gdp","tag-gross-domestic-product","tag-growth","tag-money-expansion","tag-s","tag-surplus-energy-economic","tag-tim-morgan"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/61629","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=61629"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/61629\/revisions"}],"predecessor-version":[{"id":61630,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/61629\/revisions\/61630"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=61629"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=61629"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=61629"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}