Towards full-world economics | 33 comments (33 topical, 0 editorial, 0 hidden)

Re: Towards full-world economics (4.00 / 3)

In the latter half of the 20th century, this changed radically: Industrial production had by then increased to the point where the availability of raw materials had become a point of crucial importance. The iconic resource crisis (although this went largely unrecognised at the time) was probably the oil shock following the peak of the Texas oil production.

Yes, though this was more like the last quarter. I tried to find some data on resource prices, but apparently the historical time series are somewhat slippery because the trend they will show depends to a high degree on the deflator (i.e. inflation measure) used.

At least, this is stated by a Swedish Professor called Svedberg. He argues that the inflation indices have been too high, whereas a lot of other people have argued that the changes recently introduced with regard to hedonic pricing have made the indices too low, so I am just passing that along.

Svedberg does have an interesting table in one of his lectures (pdf) which shows that the use of metals and oil has grown at a slower rate than overall economic production since the 1970s. This strongly points to their relative scarcity. With regard to metals, I would guess that recycling rates have gone up a lot, and that the figures shown here are of overall inputs, not extraction.

by nanne (zwaerdenmaecker@gmail.com) on Sun Aug 16th, 2009 at 06:30:32 PM EST

Re: Towards full-world economics (4.00 / 2)

Or alternatively this just reflects the development of the non tangible economy.

Particularly over the last 15-20 years, GDP growth has been driven by activities that consume little or no physical resources - information, banking, service sector etc.

by senilebiker on Tue Aug 18th, 2009 at 04:32:54 AM EST
[ Parent ]

Re: Towards full-world economics (none / 0)

senilebiker:

activities that consume little or no physical resources - information, banking, service sector etc.

there's another side to that, though, because those 'activities' subsidise and finance the most destructive 'other' activities, whose additions to the GDP are rife with profits that will have to be paid for later, and steal from the commons.

obviously the tool of finance is not inherently the problem, ot Jerome would not have pulled off such a mighty achievement recently, but this tool is being so seriously misused right now, it has become such an accomplice to so much of what is wrong around us, and case like Jerome's are the exception.

great diary, Jake, very clear, organised, and accessible writing, thanks.

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Tue Aug 18th, 2009 at 05:54:43 AM EST
[ Parent ]

Re: Towards full-world economics (4.00 / 2)

melo:

service sector etc.
there's another side to that, though, because those 'activities' subsidise and finance the most destructive 'other' activities

I remind you that massage therapy is part of the 'service sector'.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Migeru (migeru at eurotrib dot com) on Tue Aug 18th, 2009 at 05:57:39 AM EST
[ Parent ]

Re: Towards full-world economics (none / 0)

ouch, haha

hit a nerve there, teach me to be more discrete about my clients...

besides you know quite well i ~~rob from~~ rub the rich to feed the poor, so there!

seriously tho', i do feel bad thinking how maybe i'm helping evil people feel good, so they can go forth and destroy better the next day, and yes it bothers me, as it should.

i guess for purity's sake i should establish a person's eco-credentials before selling my services, lol.

i did say a couple of things i probably shouldn't have though! (i generally don't attract clients like that, i was subbing in for a friend.)

those 'escort girls' of berlu are fully culpable in that they are selling energy to him. without those hits he he would have crumpled a long time ago.

information is expensive, because server farms use huge amounts of energy, banking is expensive because of dishonesty and bad faith.

massage? a renewable resource, an ever-expanding market, (though many unable to afford last year's prices), and i just heard from a friend who worked at a private villa in Nice (€180,000 a week rental), that the going rate fro a live-in massage therapist there in season is €2,000 euros a week!

still peanuts next to the bar bill, i bet. the cook bought one fish for €500 from his source.

funny old world...

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Tue Aug 18th, 2009 at 10:03:49 AM EST
[ Parent ]

Re: Towards full-world economics (none / 0)

melo:

banking is expensive because of dishonesty and bad faith.

Jerome already dealt with this in his reply to your previous comment...

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Migeru (migeru at eurotrib dot com) on Tue Aug 18th, 2009 at 12:45:16 PM EST
[ Parent ]

banking (4.00 / 3)

case like Jerome's are the exception

I'm not sure that's true. Most of the employees in the banking sector - even of the minority engaged in front office activities of wholesale banking (as opposed to overwhelmingly boring retail banking) are engaged in mundane and necessary tasks. The number of people engaged in trading and speculative investment activities is not that large - it's just that they are the most idolised, "sexy" and talked about, and of course that they capture disproportionate fractions of bank income.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Aug 18th, 2009 at 11:15:35 AM EST
[ Parent ]

Re: Towards full-world economics (none / 1)

This is true, having a measure of industrial output to compare would be better. Still, the difference is striking enough to say that until 1971 energy resources and other resources were so abundant that any efficiency in their use was unnecessary, whereas the picture changed afterwards.

by nanne (zwaerdenmaecker@gmail.com) on Tue Aug 18th, 2009 at 07:10:49 AM EST
[ Parent ]

Re: Towards full-world economics (4.00 / 2)

senilebiker:

Particularly over the last 15-20 years, GDP growth has been driven by activities that consume little or no physical resources - information, banking, service sector etc.

That has to be a good thing, since it shows that "growth" is possible without increased resource use precisely because the monetary value of intangible services is included in our measure of activity.

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma

by Migeru (migeru at eurotrib dot com) on Tue Aug 18th, 2009 at 07:19:11 AM EST
[ Parent ]

Re: Towards full-world economics (none / 1)

Does that include the monetary value of bubbles, Ponzi schemes, and other market manipulations?

As usual, there has to be - and there isn't - a distinction between intangible value creation, and intangible thievery and mendacious accounting.

And even the service sector has significant infrastructure costs. It would be interesting to compare the energy and raw material costs needed to produce and run a server and a car.

I suspect the total resource bill would be closer than many people realise.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Tue Aug 18th, 2009 at 07:28:20 AM EST
[ Parent ]

Towards full-world economics | 33 comments (33 topical, 0 editorial, 0 hidden)

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