Posts Tagged ‘gross national product


about “sustainable growth”

What is growing? The “gross product” (GP).

That is: the sum of the monetary evaluations of all products and services of a subsection of mankind, called state. There is a subtle difference between gross national product and gross domestic product, which is of no importance for the following, so just “GP”.

As a side note, it would be better to speak not of “products and services” but of “transactions”. In a economic transaction something happens between people, accompagnied by an exchange of money. This concept depicts better the flowlike nature and the diversity of the process.

Imagine now a gigantic societal price list, in which all transactions are listed by some category.

Prices vary by time and place. So if we divide all transactions by sort, region and time into categories, like “20 minutes physiotherapy 2013 in Germany” or “1 biological bread 2013 in France”, we get a distribution of price events around a mean and take this mean as price for the category.

So the GP can be represented as sum of amount x price for all categories.

How is it growing? (given no-inflation conditions)

  1. Increase of total working time.
  2. Increase of added value per working hour, i.e. the productivity.

Now productivity can be broken down into two kinds:

  1. Quantitative productivity. The concept relates to measurable and countable quantities: numbers of pieces, amount of material put out or treated.
  2. Qualitative productivity. If it is growing, the products or services created per working hour is considered more valuable by a sufficent number of people, reflected by a higher price.

Question: Do we need growth at all?

Answer: Basically not, but … productivity is increased every year. If economic value added stays the same, total working time decreases. As individual working times are inflexible, more and more people become jobless. This is a problem.

And what is “sustainable”?

The term has been coined with respect to the world as a whole, but with a clear focus on the catching up of the “third world” and on longterm foresight, i.e. a considered and resource–sparing advancement. It contains also an aspect of minimizing risk and creation of corresponding institutions. (See Wikipedia for that.)

As another side note, I don’t like very much the term “development” in the context of the productivity slope between world regions, because this very broad term is squeezed into a very narrow meaning: the catchup of the poor countries – which has never been meant serious at that (over here). It is somehow a smudging term.

It is clear, that a process, which is using up the existing resources as fast as possible and is piling up high risks by changing the climate is not “sustainable” in the above sense.

Qualitative productivity, sustainability and the societal price list

The remarkable property of qualitative productivity is, that it is strongly linked to the societal price list. This is the point, where one has to disengage oneself a little bit from the mainstream paradigm, and because of which I wrote down all this.

If a cell phone gets a better display or a car a greater mileage or a physician a better education, these are all very clear cases of  higher qualitative productivity.

But there is another aspect, which is not so obvious: value system shift in society, expressed and reflected in a change of the societal price list.

An example is pure biologically produced foods. In the last ten years, more and more people were ready to pay more money for food, if it was biological. Now with conversion to pure biological production, quantitative productivity decreases. But as biological foods are considered more valuable – and are consequently higher priced – the GP can grow nevertheless.

A similar case is subsidized regenerative energy use. Here, e.g. with high state subsidies in Germany, the value decision was not taken as a sum of many individual decisions, but by a small circle of government people. So for society as a whole, regenerative energy use was worth the cost, even if the individual may have grumbled about it.

The flexibilty of the societal price list

Such a price, which has not been created by market forces, is nevertheless an expression of a sense of value, only by the “volonté générale”, as opposed to the “volonté de tous”, which translates into the will of the market.

Lately it has become clear, that market is not the highest authority for economic advance. That it can’t cope with certain tasks in society is commonplace. To be added is, that it is influenced to the highest degree by fashions, moods, advertising, culture and subculture et c. Like a snake, it curls and twists left and right, back and forth. Apart from basic needs, there is no prior structure, no “natural” decision in weighing up of the different impulses towards status, attractivity, distraction, community spirit, lust et c. Even health and to be alive itself has for different people at different times a different significance.

Advertising is in this game not just a liar, who only promises pleasure. To a certain degree, its promise is self-fulfilling: if something has been described to me as beautiful, I tend to experience it as beautiful. (This comes out of the deeply social nature of our emotions.)

Now if sustainability becomes important to us, so important, that we start to be ready to spend money for it, we immediately get our “sustainable growth”.

The societal price list, the societal system of values, expressed in prices, can easily lead to sustainable advance  – and it is in our own hand.

What does this mean specifically? A brainstorming.

We could promote higher positive value  – i.e. demand -  to the following things:

Education, Art, child care, care for old people, physical and mental health care, biologically produced food and raw materials.

We could promote a higher negative value and charge a higher price for:
green house gas emissions, non natural use of landscape and consumption of fossil raw materials.

Complete the list yourself 🙂 .


June 2018
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