6 ms·

>you have to agree that in the face of declining populations and ageing demographics, we will have to shift to a new economic model where growth isn’t the only

by Aunche 4y ago

>you have to agree that in the face of declining populations and ageing demographics, we will have to shift to a new economic model where growth isn’t the only goal Who exactly is setting growth as the "only goal"? It's really only developing countries and the tech sector. Japan and basically are of Europe is more or less fine with their stagnant GDP.

more_corn 4y ago
An economy without growth will fall apart. Yuval Noah Harari said it very well. Lenders only lend because there’s faith that $1 loaned today becomes more than $1 paid back tomorrow. Without growth there’s no incentive to lend. Without lending we’re looking at medieval level economies. It’s not the only thing we care about, but it’s a necessity. That being said growth can come in all shapes and sizes. Elevating everyone out of poverty is growth. Reducing waste increases efficiency, that’s also growth. Growth is not a bad word. It’s absolutely required for positive outcomes. The potential for growth is infinite. What, you might ask, about when everyone is elevated out of poverty and waste is largely eliminated? Truly infinite requires growth even beyond that. We should be so lucky to face that problem. But the answer there is obvious as well. The resources available in the universe are effectively infinite.
- data_maan 4y ago
  But, sadly, we live on earth and have to make to with the very finite resources we have here.
  - JPKab 4y ago
    Economic growth can occur while simultaneously becoming more efficient with existing resources. See the massive gains in agriculture, for example. An acre of land today can produce vastly more food than an acre could 500 years ago, for example.
    - vkou 4y ago
      And what happens when an acre in year 2XYZ + 500 no longer produces more food than an acre in year 2XYZ?
    - idlehand 4y ago
      Adding more inputs to a production process generally increases output. But many parts of the world are already suffering from soil depletion because of intensive farming, and the fertilizers and fossil fuels which we use to raise yields will run out eventually. Innovation has been able to outrun resource depletion for the last 300 years of industrialism, but that is no guarantee that it will last forever. Even a lot of that growth has come at the cost of increased emissions and resource depletion rather than efficiency gains.
      - trashtester 4y ago
        > Innovation has been able to outrun resource depletion for the last 300 years of industrialism. It did over hundreds of years of EXTREMELY high growth (both in terms of number of people and wealth per person). If growth falls to a positive-but-very-low level, it will make it a lot easier for innovation to keep up. Also, keep in mind that apart from Uranium, all the atoms on Earth remain here. We don't "use up" atoms at any significant rate. Apart from the atoms themselves, the main challenge is how they're put together. To rearrange how atoms are put together (to create fertilizer, recycle waste, etc), we primarily need energy. And before energy resoures run out, we should be able to produce suffient amounts of energy using either renewables or fusion. Now fusion could cause us to face a situation where we run out of hydrogen atoms, but at the rate we currently consume energy, that would take practically forever. In any event, in about a billion years, the sun will become a red giant.
        orestarod 4y ago
        Much longer than a billion years. But it's true Earth itself will be inhabitable in 1 billion years.
    - yellowapple 4y ago
  - philwelch 4y ago
    Says who!?
- boomchinolo78 4y ago
  Yuval Noah Harari is the worst offender of the reductionist mindset. I can't even begin to understand how the WEF even listens to that uppity book peddler.
  - redmen 4y ago
    Everybody knows the best way to make a fortune is to get into book sales.
  - sloan 4y ago
    I know, right? Every time his name comes up I groan inside.
- andi999 4y ago
  While this sounds convincing, what about if there is just a little inflation and no real growth, only nominal growth due to that inflation. Wouldnt the motive of lending 1$ today for a year not be to have an amount which has the same purchase value in a year?
- trashtester 4y ago
  > Lenders only lend because there’s faith that $1 loaned today becomes more than $1 paid back tomorrow. This is false, especially for low risk lending. An at least equally important reason for lending, is to delay consumption. Lending teleoports wealth forward in time. Supply and demand of credit will depend if the wealth gets bigger or smaller as a consequence. Keep in mind that even a bank depost it "lending", and if the deposit is big, you don't have a government guarantee. Also, even with low inflation, the interest rate may very well still be lower than inflation. If you're a fan of gold, you may want to buy gold. That brings two problems: 1) Where do you store it? If you store it at home, you are inviting burglars. If you store it in a vault, the owner is likely to charge you from 0.5% to 1.0% per year as a storage fee. 2) If you buy the gold when credit is cheap, and interest rates are lower than inflation, the price is high. But if, by the time you want to sell it, the economic downturn is over, and everyone want to borrow money to invest in a business or a new house, the gold price has probably come down already. So, unless you buy the gold BEFORE the downturn, you may very well lose quite a bit from gold, compared to other assets. > Growth is not a bad word. It’s absolutely required for positive outcomes. Growth is good and it makes many things easier. But it IS possible for societies to function well with minimal or even negative growth, at least for a time. In fact, throughout most of history, the average growth per year was pretty low, and might very well be below zero over the lifetime of a given person. Part of the problem we have no, is that we come to EXPECT such growth, instead of being grateful when we have it.
  - pharmakom 4y ago
    Why would I lend at 0% when I can hold cash risk free?
    - trashtester 4y ago
      Let me first assume the strictest case, ie that you mean 0% literally, not 0% real rate (adjusted for inflation). Imagine you are a big institution that holds $10 Billion in "cash", for instance a European bank. The interest offered to them by the ECB at the moment is -0.50%. Most banks prefer to pay that premium for storing "cash" in the ECB account over extracting physical notes. (The notes may not even be available.) Whether or not private citizens are willing to lend at negative nominal interest rate, doesn't matter so much, as long as companies and institutions are willing. But in the real world, there is usually some inflation. If the inflation is 5%, cash will lose 5% if its value per year if you store it as paper. Most people will store it in a bank deposit. In today's market, far below 5%, probably closer to 0 than 5. In other words, private persons often lend money to the bank at a negative real interest rate. Whether your mean nominal or real rates, there are people or organizations out there that are willing to lend below a rate of 0% at this very moment.

by Aunche 4y ago

more_corn 4y ago

An economy without growth will fall apart. Yuval Noah Harari said it very well. Lenders only lend because there’s faith that $1 loaned today becomes more than $1 paid back tomorrow. Without growth there’s no incentive to lend. Without lending we’re looking at medieval level economies. It’s not the only thing we care about, but it’s a necessity. That being said growth can come in all shapes and sizes. Elevating everyone out of poverty is growth. Reducing waste increases efficiency, that’s also growth. Growth is not a bad word. It’s absolutely required for positive outcomes. The potential for growth is infinite. What, you might ask, about when everyone is elevated out of poverty and waste is largely eliminated? Truly infinite requires growth even beyond that. We should be so lucky to face that problem. But the answer there is obvious as well. The resources available in the universe are effectively infinite.

data_maan 4y ago
But, sadly, we live on earth and have to make to with the very finite resources we have here.
- JPKab 4y ago
  Economic growth can occur while simultaneously becoming more efficient with existing resources. See the massive gains in agriculture, for example. An acre of land today can produce vastly more food than an acre could 500 years ago, for example.
  - vkou 4y ago
    And what happens when an acre in year 2XYZ + 500 no longer produces more food than an acre in year 2XYZ?
  - idlehand 4y ago
    Adding more inputs to a production process generally increases output. But many parts of the world are already suffering from soil depletion because of intensive farming, and the fertilizers and fossil fuels which we use to raise yields will run out eventually. Innovation has been able to outrun resource depletion for the last 300 years of industrialism, but that is no guarantee that it will last forever. Even a lot of that growth has come at the cost of increased emissions and resource depletion rather than efficiency gains.
    - trashtester 4y ago
      > Innovation has been able to outrun resource depletion for the last 300 years of industrialism. It did over hundreds of years of EXTREMELY high growth (both in terms of number of people and wealth per person). If growth falls to a positive-but-very-low level, it will make it a lot easier for innovation to keep up. Also, keep in mind that apart from Uranium, all the atoms on Earth remain here. We don't "use up" atoms at any significant rate. Apart from the atoms themselves, the main challenge is how they're put together. To rearrange how atoms are put together (to create fertilizer, recycle waste, etc), we primarily need energy. And before energy resoures run out, we should be able to produce suffient amounts of energy using either renewables or fusion. Now fusion could cause us to face a situation where we run out of hydrogen atoms, but at the rate we currently consume energy, that would take practically forever. In any event, in about a billion years, the sun will become a red giant.
      - orestarod 4y ago
        Much longer than a billion years. But it's true Earth itself will be inhabitable in 1 billion years.
  - yellowapple 4y ago
- philwelch 4y ago
  Says who!?
boomchinolo78 4y ago
Yuval Noah Harari is the worst offender of the reductionist mindset. I can't even begin to understand how the WEF even listens to that uppity book peddler.
- redmen 4y ago
  Everybody knows the best way to make a fortune is to get into book sales.
- sloan 4y ago
  I know, right? Every time his name comes up I groan inside.
andi999 4y ago
While this sounds convincing, what about if there is just a little inflation and no real growth, only nominal growth due to that inflation. Wouldnt the motive of lending 1$ today for a year not be to have an amount which has the same purchase value in a year?
trashtester 4y ago
> Lenders only lend because there’s faith that $1 loaned today becomes more than $1 paid back tomorrow. This is false, especially for low risk lending. An at least equally important reason for lending, is to delay consumption. Lending teleoports wealth forward in time. Supply and demand of credit will depend if the wealth gets bigger or smaller as a consequence. Keep in mind that even a bank depost it "lending", and if the deposit is big, you don't have a government guarantee. Also, even with low inflation, the interest rate may very well still be lower than inflation. If you're a fan of gold, you may want to buy gold. That brings two problems: 1) Where do you store it? If you store it at home, you are inviting burglars. If you store it in a vault, the owner is likely to charge you from 0.5% to 1.0% per year as a storage fee. 2) If you buy the gold when credit is cheap, and interest rates are lower than inflation, the price is high. But if, by the time you want to sell it, the economic downturn is over, and everyone want to borrow money to invest in a business or a new house, the gold price has probably come down already. So, unless you buy the gold BEFORE the downturn, you may very well lose quite a bit from gold, compared to other assets. > Growth is not a bad word. It’s absolutely required for positive outcomes. Growth is good and it makes many things easier. But it IS possible for societies to function well with minimal or even negative growth, at least for a time. In fact, throughout most of history, the average growth per year was pretty low, and might very well be below zero over the lifetime of a given person. Part of the problem we have no, is that we come to EXPECT such growth, instead of being grateful when we have it.
- pharmakom 4y ago
  Why would I lend at 0% when I can hold cash risk free?
  - trashtester 4y ago
    Let me first assume the strictest case, ie that you mean 0% literally, not 0% real rate (adjusted for inflation). Imagine you are a big institution that holds $10 Billion in "cash", for instance a European bank. The interest offered to them by the ECB at the moment is -0.50%. Most banks prefer to pay that premium for storing "cash" in the ECB account over extracting physical notes. (The notes may not even be available.) Whether or not private citizens are willing to lend at negative nominal interest rate, doesn't matter so much, as long as companies and institutions are willing. But in the real world, there is usually some inflation. If the inflation is 5%, cash will lose 5% if its value per year if you store it as paper. Most people will store it in a bank deposit. In today's market, far below 5%, probably closer to 0 than 5. In other words, private persons often lend money to the bank at a negative real interest rate. Whether your mean nominal or real rates, there are people or organizations out there that are willing to lend below a rate of 0% at this very moment.