3 ms·

I think one of the main problems is that GDP is used as the measure of national prosperity. GDP goes down when people decide to work less. Some kind of net weal

I think one of the main problems is that GDP is used as the measure of national prosperity. GDP goes down when people decide to work less. Some kind of net wealth measurement would be much better parameter for a country to try and maximize. Include natural resources and the biosphere in that wealth. In this scheme taking oil from the ground and burning it would likely be a net negative on national wealth while using oil to make carbon fiber for an airplane would be a net positive. Growing a crop that builds the soil instead of depleting might add more to Gross Domestic Wealth than a more "profitable" crop.

b0rsuk 9y ago
When a company produces 1000 cars and pollutes a river in process, this counts as economic growth. When another company spends time, money and resources to clean that river, that also counts as economic growth, even if was just to get natural environment back to its original health. Some food for thought.
- valuearb 9y ago
  This is a great example of how we don't weigh externalities in GDP, why we should, and why we need market based solutions to those externalities. For example, a cap on river pollutants so low the river and wildlife can't be poisoned and each company has to buy rights from the limited pool, or if too expensive, find ways to limit their pollutants. I once read (from Milton Friedman IIRC) that some european countries passed a law to limit river pollution by requiring companies to have their river water intakes downstream of their outflows. Supposedly this made a huge difference in the amount of pollutants they dumped in the river. That is a simple but limited way of imposing the externality costs on the persons who inflict the damage.
- defterGoose 9y ago
  What? You're making a serious stretch there. The profit from the cars contributes directly to GDP, but even if individual people get paid to help clean up the river, where is that money coming from? It's a DRAIN on resources to get the river back to normal, there's no profit. Therefore it's not growth.
  - ansible 9y ago
    I think the point is that the cleanup effort is "on the books" and calculated as part of the gross domestic product. The issue that people are trying to make is that there are many activities that do contribute to the overall wealth of a country, which don't get counted in the GDP. And there are things that are counted by the GDP which don't contribute to wealth. GDP is a poor measure of the overall wealth and health of a country.
    - defterGoose 9y ago
      Right, I agree with you. From the tone of the post, it seemed like the author was justifying the GDP calculation as it's made. Perhaps there was some sarcasm there I didn't detect. But yeah, if we want to count the cost of services produced for, say, digging a giant hole and then subsequently filling in said hole, we may want to rethink our logic. I'm becoming disillusioned with the idea of economics being a valid human science when it can't seem to deal properly with the concept of externalities.
autokad 9y ago
nothing is neither created nor destroyed, by that very law there cannot be a crop that does not take from the soil. If I eat a banana that has potassium in it, it lends to the fact that it took potassium out of the soil. farmers do add fertilizer and other stuff back to the soil, though we are finding that maybe there is more to the equation. certain methods like tilling are done to kill parasites, etc, but it may also make the soil vulnerable to erosion. luckily engineers and farmers are looking at these things more closely now. its also important to note this is just 1 study. just 1 region. 1 particular type of trap. there is still lots to know / find out, but I think its wrong to be jumping to huge conclusions just yet.
- njarboe 9y ago
  True, for some farming elements are removed from the plot of land faster than natural replenishment. These will have to be added back by humans in some way. The main constituents of food, on the other hand, come from the atmosphere. Hydrogen, Carbon, Oxygen, and Nitrogen (with the right plants/bacteria). Soil is a mixture of organic matter, minerals, gases, liquids, and organisms that together support life [1]. This soil is needed for efficient agriculture and certain farming practices increase the amount of soil and other decrease it. Once it is gone, farming stops. [1] https://en.wikipedia.org/wiki/Soil https://en.wikipedia.org/wiki/Soil
- schiffern 9y ago
  > If I eat a banana that has potassium in it, it lends to the fact that it took potassium out of the soil. This is true. However the little-known fact is that healthy soil contains all the "machines" required to break down the abundant insoluble potassium (along with every other necessary element) present in rock particles into plant-soluble fertilizer. This "insoluble pool" contains enough nutrients for literally thousands of years of plant growth, if only the soil life is present to unlock it. The problem is that tillage kills this soil life, and that dead land now requires the constant import of external fertilizer to grow food. Pesticide and fertilizer application also kills these organisms, which out-compete pest species (as mentioned here: https://news.ycombinator.com/item?id=15515209 https://news.ycombinator.com/item?id=15515209). Spraying becomes a vicious cycle for the farmer, and a lucrative cycle for their chemical supplier. In other words, functional soil isn't just an inert "tank" for holding nutrients. It's a two-dimensional factory for converting in-situ rock and air and rain into biomass. This is all explained much better by soil microbiologist Elaine Ingham. https://www.youtube.com/watch?v=x2H60ritjag https://www.youtube.com/watch?v=x2H60ritjag > luckily engineers and farmers are looking at these things more closely now. I would add biologists (including soil scientists, botanists, mycologists, entomologists, ecologists, etc) and indigenous experts to that list.
cromulent 9y ago
Bhutan have Gross National Happiness (GNH) as their measure. https://en.wikipedia.org/wiki/Gross_National_Happiness https://en.wikipedia.org/wiki/Gross_National_Happiness

b0rsuk 9y ago

When a company produces 1000 cars and pollutes a river in process, this counts as economic growth. When another company spends time, money and resources to clean that river, that also counts as economic growth, even if was just to get natural environment back to its original health. Some food for thought.

valuearb 9y ago
This is a great example of how we don't weigh externalities in GDP, why we should, and why we need market based solutions to those externalities. For example, a cap on river pollutants so low the river and wildlife can't be poisoned and each company has to buy rights from the limited pool, or if too expensive, find ways to limit their pollutants. I once read (from Milton Friedman IIRC) that some european countries passed a law to limit river pollution by requiring companies to have their river water intakes downstream of their outflows. Supposedly this made a huge difference in the amount of pollutants they dumped in the river. That is a simple but limited way of imposing the externality costs on the persons who inflict the damage.
defterGoose 9y ago
What? You're making a serious stretch there. The profit from the cars contributes directly to GDP, but even if individual people get paid to help clean up the river, where is that money coming from? It's a DRAIN on resources to get the river back to normal, there's no profit. Therefore it's not growth.
- ansible 9y ago
  I think the point is that the cleanup effort is "on the books" and calculated as part of the gross domestic product. The issue that people are trying to make is that there are many activities that do contribute to the overall wealth of a country, which don't get counted in the GDP. And there are things that are counted by the GDP which don't contribute to wealth. GDP is a poor measure of the overall wealth and health of a country.
  - defterGoose 9y ago
    Right, I agree with you. From the tone of the post, it seemed like the author was justifying the GDP calculation as it's made. Perhaps there was some sarcasm there I didn't detect. But yeah, if we want to count the cost of services produced for, say, digging a giant hole and then subsequently filling in said hole, we may want to rethink our logic. I'm becoming disillusioned with the idea of economics being a valid human science when it can't seem to deal properly with the concept of externalities.

autokad 9y ago

nothing is neither created nor destroyed, by that very law there cannot be a crop that does not take from the soil. If I eat a banana that has potassium in it, it lends to the fact that it took potassium out of the soil. farmers do add fertilizer and other stuff back to the soil, though we are finding that maybe there is more to the equation. certain methods like tilling are done to kill parasites, etc, but it may also make the soil vulnerable to erosion. luckily engineers and farmers are looking at these things more closely now. its also important to note this is just 1 study. just 1 region. 1 particular type of trap. there is still lots to know / find out, but I think its wrong to be jumping to huge conclusions just yet.

njarboe 9y ago
True, for some farming elements are removed from the plot of land faster than natural replenishment. These will have to be added back by humans in some way. The main constituents of food, on the other hand, come from the atmosphere. Hydrogen, Carbon, Oxygen, and Nitrogen (with the right plants/bacteria). Soil is a mixture of organic matter, minerals, gases, liquids, and organisms that together support life [1]. This soil is needed for efficient agriculture and certain farming practices increase the amount of soil and other decrease it. Once it is gone, farming stops. [1] https://en.wikipedia.org/wiki/Soil https://en.wikipedia.org/wiki/Soil
schiffern 9y ago
> If I eat a banana that has potassium in it, it lends to the fact that it took potassium out of the soil. This is true. However the little-known fact is that healthy soil contains all the "machines" required to break down the abundant insoluble potassium (along with every other necessary element) present in rock particles into plant-soluble fertilizer. This "insoluble pool" contains enough nutrients for literally thousands of years of plant growth, if only the soil life is present to unlock it. The problem is that tillage kills this soil life, and that dead land now requires the constant import of external fertilizer to grow food. Pesticide and fertilizer application also kills these organisms, which out-compete pest species (as mentioned here: https://news.ycombinator.com/item?id=15515209 https://news.ycombinator.com/item?id=15515209). Spraying becomes a vicious cycle for the farmer, and a lucrative cycle for their chemical supplier. In other words, functional soil isn't just an inert "tank" for holding nutrients. It's a two-dimensional factory for converting in-situ rock and air and rain into biomass. This is all explained much better by soil microbiologist Elaine Ingham. https://www.youtube.com/watch?v=x2H60ritjag https://www.youtube.com/watch?v=x2H60ritjag > luckily engineers and farmers are looking at these things more closely now. I would add biologists (including soil scientists, botanists, mycologists, entomologists, ecologists, etc) and indigenous experts to that list.

cromulent 9y ago

Bhutan have Gross National Happiness (GNH) as their measure. https://en.wikipedia.org/wiki/Gross_National_Happiness https://en.wikipedia.org/wiki/Gross_National_Happiness