14 ms·

GDP growth of humanity over the very long run

52 points by asm 11y ago

padobson 11y ago
Optimist: Look how good things are getting, we're only a few generations away from universal prosperity! Pessimist: Look how good things have been, we're clearly only a few generations away from this prosperity bubble bursting.
kfk 11y ago
And if you ask a person in the 18th century if we could grow GDP 30+ folds while increasing various folds also the world population he would say... you are going to finish all the Earth resources and die before you even get to a tenth of that! It's just to say: 1. productivity is always very misunderstood by people (hence Malthus); 2. poverty is better fought with growth, not re-distribution of wealth
- deoptimo 11y ago
  0. When many of the world's resources will be depleted in a multi-decade timeframe, there is a problem. I want humanity to last millions of years. 1. Fortunately, longer schooling and birth control has reduced the rate of growth in the model of Malthus. This is dumb luck, not divination from GDP. 2. Please remember that we won WWII and went to the moon in the periods with highest marginal tax rates. Growth is probably highest with higher rates of taxation and government investment in R&D.
- marcosdumay 11y ago
  Well, if you got hold of how to bootstrap societal growth or end poverty, please, share if with the world. Everybody is looking for this secret and all the obvious answers seem to be wrong. Anyway, concentration of wealth seems to reduce growth. No idea what way causation points, but your advice against redistribution look very naive.
- jdimov10 11y ago
  3. Learned people are consistently and dramatically underestimating the capacity of Earth's "limited" resources to support a growing population.
  - stouset 11y ago
    The Earth has finite resources, and is replenishing them more slowly than we're using them. You're making the argument that withdrawing exponentially increasing amounts from our sizable savings account is just fine, thank you on the assumption that it will never run out. This is a clear failure in understanding of the exponential function.
    - phrogdriver 11y ago
      Or it could just be a disagreement that it is an exponential function on a longer timescale.
  - phrogdriver 11y ago
    Like all models, incorrect but useful, I think that the most useful model to view "value" and GDP is as a crude approximation of the human input that goes into making something or making it useful. Natural resources are only useful if humans exert effort to extract and refine them, services are only useful if some humans exert effort to save other humans more effort, manufacturing is only useful if the effort exerted is repaid in improved productivity or utility gained, etc. Once you abstract away from monetary units to say that we're all trading units of human effort at varying degrees of efficiency, it's clear that GDP growth and "the ability of limited resources to support a growing population" is dependent on the growth of both the amount and the efficiency of human capital rather than physical resources. I'd take Ehrlich's wager [0] at any point in the future. [0] https://en.wikipedia.org/wiki/Simon%E2%80%93Ehrlich_wager https://en.wikipedia.org/wiki/Simon%E2%80%93Ehrlich_wager
- Retric 11y ago
  BS. Per person GDP did not grow 30+ fold. A hunter gather lifestyle from 10,000 years ago takes ~0.5-5$/day in food assuming everything else [ed: produced 10,000 years ago] has zero value. US Per capita GDP = ~125$ / day. Actual growth per year is on the order of 0.04% / year PS: Remember meat more than 1$/lb. For much of human history per capita GDP by todays measurements was actually dropping.
  - jp555 11y ago
    > assuming everything else has zero value Ah, so if you ignore almost everything, you have a point. Like, for example 99% of the people on the planet. Because there is no way a hunter-gatherer system could support our population. Not to mention I for one think not dying of the common cold has quite a lot of value.
    - Retric 11y ago
      No, I am dramatically understating the value of the average person from 10,000 years ago not the other way around. Child care for example has actual value which is part of current US GDP. A bow, tent, or clothing constructed using methods from 10,000 years ago has real world value today. But, I am calling all that 0 and just looking at food. Also, this is per capita GDP, having more people does not mean peoples standards of living automatically increases. PS: The common cold was not an issue back then as the population was to low to spread it around. In fact a large chunk of diseases only showed up as population density increased.
      - adamc 11y ago
        True of communicable diseases to a great extent, but not, for example, diseases of aging or birth defects.
  - VLM 11y ago
    WRT your PS about meat prices, I did some engineering back of envelope estimates with a million grams per ton and a ton of post-green revolution rice costing about three hundred bucks in 1990 (or so google says) and about 4 calories per gram of carbs, the world GDP "always" being $300 per person before the industrial revolution, and ended up with something around ten thousand calories of rice per person per day. Some googling indicates the green revolution plus industrialization plus factory farms has temporarily quintupled grain production per acre, well, absolute best case anyway. So assuming world productivity was solely focused on rice ag (cheapest calories there is... right?) then every human on the planet consumed 2000 calories per day of rice and absolutely nothing else happened. That sounds very unlikely. I'm not entirely sure people can live long term off absolutely nothing but heavy manual labor and 2000 calories or less of rice per day, for vitamin and mineral deficiency reasons if nothing else. Generally when you're doing data analysis and some textbook curve pops out, that's a very strong indication you've screwed up your data, not that you've actually discovered anything. Far more likely despite attempts at short term correction the value of a supposedly fixed standard 1990 international dollar inflated exponentially over the past century or so, on a long enough scale. Once that correction is made, the data could be re-run to gather actual, useful results. Or rather than using inflation adjusted counters, just pick a valuable commodity like gold. Supposedly an ounce of gold has represented a year of labor from the dawn of trade up to the invention of steam powered mine pumps. A graph vs gold price might be useful. Or a hybrid of gold/oil for more recent stats.
- JamesBarney 11y ago
  Redistribution has very little effect on growth except at extreme levels.[0] Over the last 20 years the U.S. economy has grown 25% but the income for the bottom quintile has stagnated.[1][2] I would agree growth is probably the best medicine for the third world but the IMF shows it's not at odds with redistribution. I would strongly disagree that we can solve poverty in the 1st world using growth. We have two options for replacing the $7,000 the bottom quintile missed out on in the last 20 years because of rising inequality. We could redistribute $7,000 to the bottom quintile or grow by 25%. Redistributing $7,000 is doable. I don't know of any policies, or even any set of policies that would increase the size of the economy by 25%. This is even more insurmountable given that in recent history the gains from growth have not been distributed equitably. We would need to see an order of magnitude more growth, an increase in the economy of 250%-500% before the poor would be substantially better off. [0] - https://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf https://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf [1] - https://research.stlouisfed.org/fred2/series/A939RX0Q048SBEA https://research.stlouisfed.org/fred2/series/A939RX0Q048SBEA [2] - https://www.census.gov/hhes/www/income/data/historical/families/ https://www.census.gov/hhes/www/income/data/historical/famil...
  - kfk 11y ago
    If you want to look at things from a humanitarian perspective, then sure, let's talk re-distribution. But it should be in form of education and competitive markets (free milk quotas, anyone?). I struggle with the idea of making war to make peace (aka "democratization"). I also struggle with domestic re-distribution through "citizen income", because it makes life worst for all that pay taxes and those that are not "citizen" (foreigners, immigrants, etc.). If we want to help the "poor", then we should make things more competitive, starting with relaxing immigration policies as much as possible...
    - RobertoG 11y ago
      The issue is far for being so white and black. Not all the growth come from free markets. More efficient use of resources and the discovery of new technologies come from improving our knowledge. Sometimes this is done by business, sometimes no. Also, there are economic theories (even mainstream economic theories) that express the view that some kind of redistribution is necessary for keeping the engines of growth working.
- VLM 11y ago
  "you are going to finish all the Earth resources and die before you even get to a tenth of that!" Its fun to watch the debate about the "before" clause, as if the precise fraction or integer matters in the long run, when the real problem is nobody wants to face the reality of chopping off the entire "before" clause. Once we stop economically extracting cheap oil energy, resulting in a roll back of the green revolution productivity gains, in a couple years at best its game over for about 95% of present humanity. Good thing the supply of cheap oil is infinite, right?
Kinnard 11y ago
GDP might actually be one of the worst ways to measure collective well-being.
- rmah 11y ago
  That would be because GDP is not a measure of collective well-being.
- golergka 11y ago
  Can you back this statement up, please?
  - vox_mollis 11y ago
    GDP measures vodka purchased by alcoholics; it measures chemotherapy; it measures bombs killing civilians; it measures bubble malinvestments; it measures settlements in police brutality suits; it measures daycare but not caring for your own kids. And most importantly, it measures the velocity at which these things occur.
    - golergka 11y ago
      So? Isn't a society that can allow itself better alcohol, expensive medicine, better weapons, has more liquid cash, pays more in brutality suits (and pays them at all, to this matter), and spends more on daycare objectivelly better and more well-off than a society that doesn't have these things?
- HiLo 11y ago
  And it might also be one of the best measures of aggregate economic activity for a large region, which could also be considered a good measure of............?
- awl130 11y ago
  defining well-being, and then measuring it, is as pointless as defining happiness, and then measuring that. happiness is a notoriously unreliable indicator of anything. it's based on an individual's perception of his/her state. there are cultural differences. there are differences by station in life. and worst of all, there are differences per individual based on everything from the season to their age to what they ate, read or did 5 minutes prior to measurement. i use infant mortality as an objective measure of any society's success. that's because everyone in the world can agree that dead babies are a bad thing. and the data is objective and easy to measure. it is, in a sense, a better indicator than GDP. the recent example of China is probably the best example of this. For decades after the cultural revolution, China was able to decrease infant mortality, without similar increase in GDP per capita (which came later).
Isamu 11y ago
Good summary. For readability I recommend a logarithmic graph, it helps to bring out the structure of the graph more. Not as dramatic maybe for people who are not used to reading graphs, but I hate to see a graph that is just a thin line stuck to the bottom followed by a sudden upward rocket. Not very readable to my eyes.
- tantalor 11y ago
  https://docs.google.com/spreadsheets/d/1jTlkr4KqnYBaqxzg5Rteaqu0mgyv7ExmEUAIislIHTM/edit#gid=967131940 https://docs.google.com/spreadsheets/d/1jTlkr4KqnYBaqxzg5Rte...
leojg 11y ago
Its quite interesting to see how latin america gdp fall down during the 1500s (is the only region to do so, I think) And how asia is pretty much being the richest region in the world(but the largest, so maybe its a matter of proportions)
- elthran 11y ago
  I assume that the latin american dip is the Europeans beginning their invasions and looting of the meso-american civilizations
  - RobertoG 11y ago
    Probably is not so much the looting as the fall in the population. Millions of people died from contact with the diseases from Europe (20 millions by some estimates).
littletimmy 11y ago
How much of this comes at a cost of people being unhappier? Back in the time of hunter gatherers, humans "worked" for a few hours a day. The rest of the time was spent socializing and in leisure. It is fair to say they were happier compared to, let's say, an African American debt-laden minimum wage worker in the US today. Do we really need economic growth?
- adamc 11y ago
  Well, except that people got sick and had very limited medical treatments, and their lifespans were shorter. How do you weight that? Also, how do you weight the absence of toys and creature comforts?
  - littletimmy 11y ago
    The point about toys and creature comforts is hardly important enough to address. Do you honestly think kids are happier with a motorized car than they are with a hand-stitched doll? Your point about people being sick is valid, but not to the extent that you think. Firstly, it is not wise to suggest that hunter-gatherers were physically worse off than us. They got a lot of exercise, and were in all likelihood better physically. Secondly, the shorter lifespans statistic is an artifact of increased childhood mortality. Once you discount the child mortality, they had lifespans very similar to ours. Without all the diseases of affluence that we have, mind you (diabetes, for example).
    - yourepowerless 11y ago
      Taking away a kids phone and giving him a doll will likely elicit a violent response, but cool on you to decide what brings people happiness.
      - huac 11y ago
        That's inane. You'd be happy with a million dollars in your bank account but a billionaire would be pissed in the same situation. I think it's important to look at war, disease, hunger, and displacement, in some order.

52 points by asm 11y ago

Optimist: Look how good things are getting, we're only a few generations away from universal prosperity! Pessimist: Look how good things have been, we're clearly only a few generations away from this prosperity bubble bursting.

kfk 11y ago

And if you ask a person in the 18th century if we could grow GDP 30+ folds while increasing various folds also the world population he would say... you are going to finish all the Earth resources and die before you even get to a tenth of that! It's just to say: 1. productivity is always very misunderstood by people (hence Malthus); 2. poverty is better fought with growth, not re-distribution of wealth

deoptimo 11y ago
0. When many of the world's resources will be depleted in a multi-decade timeframe, there is a problem. I want humanity to last millions of years. 1. Fortunately, longer schooling and birth control has reduced the rate of growth in the model of Malthus. This is dumb luck, not divination from GDP. 2. Please remember that we won WWII and went to the moon in the periods with highest marginal tax rates. Growth is probably highest with higher rates of taxation and government investment in R&D.
marcosdumay 11y ago
Well, if you got hold of how to bootstrap societal growth or end poverty, please, share if with the world. Everybody is looking for this secret and all the obvious answers seem to be wrong. Anyway, concentration of wealth seems to reduce growth. No idea what way causation points, but your advice against redistribution look very naive.
jdimov10 11y ago
3. Learned people are consistently and dramatically underestimating the capacity of Earth's "limited" resources to support a growing population.
- stouset 11y ago
  The Earth has finite resources, and is replenishing them more slowly than we're using them. You're making the argument that withdrawing exponentially increasing amounts from our sizable savings account is just fine, thank you on the assumption that it will never run out. This is a clear failure in understanding of the exponential function.
  - phrogdriver 11y ago
    Or it could just be a disagreement that it is an exponential function on a longer timescale.
- phrogdriver 11y ago
  Like all models, incorrect but useful, I think that the most useful model to view "value" and GDP is as a crude approximation of the human input that goes into making something or making it useful. Natural resources are only useful if humans exert effort to extract and refine them, services are only useful if some humans exert effort to save other humans more effort, manufacturing is only useful if the effort exerted is repaid in improved productivity or utility gained, etc. Once you abstract away from monetary units to say that we're all trading units of human effort at varying degrees of efficiency, it's clear that GDP growth and "the ability of limited resources to support a growing population" is dependent on the growth of both the amount and the efficiency of human capital rather than physical resources. I'd take Ehrlich's wager [0] at any point in the future. [0] https://en.wikipedia.org/wiki/Simon%E2%80%93Ehrlich_wager https://en.wikipedia.org/wiki/Simon%E2%80%93Ehrlich_wager
Retric 11y ago
BS. Per person GDP did not grow 30+ fold. A hunter gather lifestyle from 10,000 years ago takes ~0.5-5$/day in food assuming everything else [ed: produced 10,000 years ago] has zero value. US Per capita GDP = ~125$ / day. Actual growth per year is on the order of 0.04% / year PS: Remember meat more than 1$/lb. For much of human history per capita GDP by todays measurements was actually dropping.
- jp555 11y ago
  > assuming everything else has zero value Ah, so if you ignore almost everything, you have a point. Like, for example 99% of the people on the planet. Because there is no way a hunter-gatherer system could support our population. Not to mention I for one think not dying of the common cold has quite a lot of value.
  - Retric 11y ago
    No, I am dramatically understating the value of the average person from 10,000 years ago not the other way around. Child care for example has actual value which is part of current US GDP. A bow, tent, or clothing constructed using methods from 10,000 years ago has real world value today. But, I am calling all that 0 and just looking at food. Also, this is per capita GDP, having more people does not mean peoples standards of living automatically increases. PS: The common cold was not an issue back then as the population was to low to spread it around. In fact a large chunk of diseases only showed up as population density increased.
    - adamc 11y ago
      True of communicable diseases to a great extent, but not, for example, diseases of aging or birth defects.
- VLM 11y ago
  WRT your PS about meat prices, I did some engineering back of envelope estimates with a million grams per ton and a ton of post-green revolution rice costing about three hundred bucks in 1990 (or so google says) and about 4 calories per gram of carbs, the world GDP "always" being $300 per person before the industrial revolution, and ended up with something around ten thousand calories of rice per person per day. Some googling indicates the green revolution plus industrialization plus factory farms has temporarily quintupled grain production per acre, well, absolute best case anyway. So assuming world productivity was solely focused on rice ag (cheapest calories there is... right?) then every human on the planet consumed 2000 calories per day of rice and absolutely nothing else happened. That sounds very unlikely. I'm not entirely sure people can live long term off absolutely nothing but heavy manual labor and 2000 calories or less of rice per day, for vitamin and mineral deficiency reasons if nothing else. Generally when you're doing data analysis and some textbook curve pops out, that's a very strong indication you've screwed up your data, not that you've actually discovered anything. Far more likely despite attempts at short term correction the value of a supposedly fixed standard 1990 international dollar inflated exponentially over the past century or so, on a long enough scale. Once that correction is made, the data could be re-run to gather actual, useful results. Or rather than using inflation adjusted counters, just pick a valuable commodity like gold. Supposedly an ounce of gold has represented a year of labor from the dawn of trade up to the invention of steam powered mine pumps. A graph vs gold price might be useful. Or a hybrid of gold/oil for more recent stats.
JamesBarney 11y ago
Redistribution has very little effect on growth except at extreme levels.[0] Over the last 20 years the U.S. economy has grown 25% but the income for the bottom quintile has stagnated.[1][2] I would agree growth is probably the best medicine for the third world but the IMF shows it's not at odds with redistribution. I would strongly disagree that we can solve poverty in the 1st world using growth. We have two options for replacing the $7,000 the bottom quintile missed out on in the last 20 years because of rising inequality. We could redistribute $7,000 to the bottom quintile or grow by 25%. Redistributing $7,000 is doable. I don't know of any policies, or even any set of policies that would increase the size of the economy by 25%. This is even more insurmountable given that in recent history the gains from growth have not been distributed equitably. We would need to see an order of magnitude more growth, an increase in the economy of 250%-500% before the poor would be substantially better off. [0] - https://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf https://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf [1] - https://research.stlouisfed.org/fred2/series/A939RX0Q048SBEA https://research.stlouisfed.org/fred2/series/A939RX0Q048SBEA [2] - https://www.census.gov/hhes/www/income/data/historical/families/ https://www.census.gov/hhes/www/income/data/historical/famil...
- kfk 11y ago
  If you want to look at things from a humanitarian perspective, then sure, let's talk re-distribution. But it should be in form of education and competitive markets (free milk quotas, anyone?). I struggle with the idea of making war to make peace (aka "democratization"). I also struggle with domestic re-distribution through "citizen income", because it makes life worst for all that pay taxes and those that are not "citizen" (foreigners, immigrants, etc.). If we want to help the "poor", then we should make things more competitive, starting with relaxing immigration policies as much as possible...
  - RobertoG 11y ago
    The issue is far for being so white and black. Not all the growth come from free markets. More efficient use of resources and the discovery of new technologies come from improving our knowledge. Sometimes this is done by business, sometimes no. Also, there are economic theories (even mainstream economic theories) that express the view that some kind of redistribution is necessary for keeping the engines of growth working.
VLM 11y ago
"you are going to finish all the Earth resources and die before you even get to a tenth of that!" Its fun to watch the debate about the "before" clause, as if the precise fraction or integer matters in the long run, when the real problem is nobody wants to face the reality of chopping off the entire "before" clause. Once we stop economically extracting cheap oil energy, resulting in a roll back of the green revolution productivity gains, in a couple years at best its game over for about 95% of present humanity. Good thing the supply of cheap oil is infinite, right?

Kinnard 11y ago

GDP might actually be one of the worst ways to measure collective well-being.

rmah 11y ago
That would be because GDP is not a measure of collective well-being.
golergka 11y ago
Can you back this statement up, please?
- vox_mollis 11y ago
  GDP measures vodka purchased by alcoholics; it measures chemotherapy; it measures bombs killing civilians; it measures bubble malinvestments; it measures settlements in police brutality suits; it measures daycare but not caring for your own kids. And most importantly, it measures the velocity at which these things occur.
  - golergka 11y ago
    So? Isn't a society that can allow itself better alcohol, expensive medicine, better weapons, has more liquid cash, pays more in brutality suits (and pays them at all, to this matter), and spends more on daycare objectivelly better and more well-off than a society that doesn't have these things?
HiLo 11y ago
And it might also be one of the best measures of aggregate economic activity for a large region, which could also be considered a good measure of............?
awl130 11y ago
defining well-being, and then measuring it, is as pointless as defining happiness, and then measuring that. happiness is a notoriously unreliable indicator of anything. it's based on an individual's perception of his/her state. there are cultural differences. there are differences by station in life. and worst of all, there are differences per individual based on everything from the season to their age to what they ate, read or did 5 minutes prior to measurement. i use infant mortality as an objective measure of any society's success. that's because everyone in the world can agree that dead babies are a bad thing. and the data is objective and easy to measure. it is, in a sense, a better indicator than GDP. the recent example of China is probably the best example of this. For decades after the cultural revolution, China was able to decrease infant mortality, without similar increase in GDP per capita (which came later).

Isamu 11y ago

Good summary. For readability I recommend a logarithmic graph, it helps to bring out the structure of the graph more. Not as dramatic maybe for people who are not used to reading graphs, but I hate to see a graph that is just a thin line stuck to the bottom followed by a sudden upward rocket. Not very readable to my eyes.

tantalor 11y ago
https://docs.google.com/spreadsheets/d/1jTlkr4KqnYBaqxzg5Rteaqu0mgyv7ExmEUAIislIHTM/edit#gid=967131940 https://docs.google.com/spreadsheets/d/1jTlkr4KqnYBaqxzg5Rte...

leojg 11y ago

Its quite interesting to see how latin america gdp fall down during the 1500s (is the only region to do so, I think) And how asia is pretty much being the richest region in the world(but the largest, so maybe its a matter of proportions)

elthran 11y ago
I assume that the latin american dip is the Europeans beginning their invasions and looting of the meso-american civilizations
- RobertoG 11y ago
  Probably is not so much the looting as the fall in the population. Millions of people died from contact with the diseases from Europe (20 millions by some estimates).

littletimmy 11y ago

How much of this comes at a cost of people being unhappier? Back in the time of hunter gatherers, humans "worked" for a few hours a day. The rest of the time was spent socializing and in leisure. It is fair to say they were happier compared to, let's say, an African American debt-laden minimum wage worker in the US today. Do we really need economic growth?

adamc 11y ago
Well, except that people got sick and had very limited medical treatments, and their lifespans were shorter. How do you weight that? Also, how do you weight the absence of toys and creature comforts?
- littletimmy 11y ago
  The point about toys and creature comforts is hardly important enough to address. Do you honestly think kids are happier with a motorized car than they are with a hand-stitched doll? Your point about people being sick is valid, but not to the extent that you think. Firstly, it is not wise to suggest that hunter-gatherers were physically worse off than us. They got a lot of exercise, and were in all likelihood better physically. Secondly, the shorter lifespans statistic is an artifact of increased childhood mortality. Once you discount the child mortality, they had lifespans very similar to ours. Without all the diseases of affluence that we have, mind you (diabetes, for example).
  - yourepowerless 11y ago
    Taking away a kids phone and giving him a doll will likely elicit a violent response, but cool on you to decide what brings people happiness.
    - huac 11y ago
      That's inane. You'd be happy with a million dollars in your bank account but a billionaire would be pissed in the same situation. I think it's important to look at war, disease, hunger, and displacement, in some order.