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Wealth doesn't matter for a standard of living - it's just correlated with it. Even a housing stock - part of wealth - influences standard of living because it provides housing services. These services could become much less valuable - like functionalist architecture of 70es which once was so popular but now seems so ugly - which would means that the corresponding wealth is much less.

I used "ethical grounds" because most of the counter-arguments against using consumption seem to be grounded in ethics.

And I was talking about a medium-run average of consumption, not instantaneous one. It's possible to maintain high consumption standards for some time by recklessly letting your capital stock (wealth) depreciate, or by exploiting natural resources. That's why a longer view is needed.

by Sargon on Thu Nov 29th, 2007 at 07:17:52 AM EST
[ Parent ]
A longer view which isn't given by GNI or GDP, surely?
by Colman (colman at eurotrib.com) on Thu Nov 29th, 2007 at 07:22:59 AM EST
[ Parent ]
I could invest 45% of my income - or none. In several years, the consequences will be very different, but I still have the same GNI or GDP today.
by Sargon on Thu Nov 29th, 2007 at 07:41:20 AM EST
[ Parent ]
Sorry, are you praising GNI/GDP as a measure or damning it? Or are you reading me as supporting GNI in the face of GDP? Or are the anti-biotics just confuddling me completely?
by Colman (colman at eurotrib.com) on Thu Nov 29th, 2007 at 07:59:45 AM EST
[ Parent ]
a) I'm saying that GNI is better than GDP, in my view, and don't understand why HDI isn't using it instead.

b) as ultimately material well-being is related to consumption, this is the measure that should be used - the integral of it over time, anyway.

c) it's very easy to damn GDP but hard to come up with viable alternatives that could be used in all countries, that's why it's used despite the shortcomings. Just like the democracy, you see.

by Sargon on Thu Nov 29th, 2007 at 08:13:11 AM EST
[ Parent ]
a. Sounds reasonable.

b. I could go for the integral of GNI as telling us something more useful.

c. I'm not convinced that hiding the subtleties of reality behind a single index is going to tell us a damn thing. To that extent, HDI is just as intrinsically flawed as GDP - neither mean anything much out of context.

by Colman (colman at eurotrib.com) on Thu Nov 29th, 2007 at 08:27:15 AM EST
[ Parent ]

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