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What Daly is saying really is more that growth as currently measured (i.e. GDP growth) isn't a good metric and is one that can't go on forever. He's not (in his

What Daly is saying really is more that growth as currently measured (i.e. GDP growth) isn't a good metric and is one that can't go on forever. He's not (in his own word) agains't growth of wealth, but he's rather asking whether GDP growth is the metric to optimize for. Saying we're bound by the laws of thermodynamics is a bit silly in my opinion. It's almost like saying we shouldn't invest in solar panels as the sun will eventually explode and won't shine anymore. A lot of GDP growth in developed nations comes from increase in efficiency, not increase in resource usage. Higher agricultural yields from better crops, self-driving cars, more efficient computers; they're all things that have the potential to drive much higher growth than their resource usage. Which I guess in ecological economics would be differentiated as "developments" rather than "growth". Now I do agree that higher growth doesn't automatically means higher standards of living. Things like automation, while highly efficient, result in most of the gains going to capital owners. How society should deal with this is another interesting question.

bnralt 4y ago
I don't know, I read the interview and it honestly wasn't clear what he was saying. He never mentions any particular policy that should be enacted (other than tariffs against other countries that don't follow our lead), and the interviewer doesn't seem interested, opting instead to ask questions about cosmology. It's a bizarre interview. His issue seems to be mostly with overconsumption of resources. But instead of creating a sustainable economy that can achieve growth through other areas (increased efficiency, increased use of renewable resources), he instead comes out against any growth and advocates a steady-state economy. But again, no specifics, just vague generalities and digressions into cosmology (arguing that economics should take into account religious questions). I was honestly shocked by the low quality of the interview. If this was presented as an exchange between teenagers on Reddit, I would have believed it.
- throw_nbvc1234 4y ago
  This kind of topic is where podcasts shine, especially if the host is literate on the topic being discussed. Or even the raw transcript of this interview versus the content that ended up being published. I would be curious how population and demographic changes play into his model of a steady state economy.
- strongpigeon 4y ago
  I do share your gripes with the interviewer. However, I think that Daly’s questions regarding the ultimate end (meaning purpose) of economic growth are worth pondering. Basically what are we trying to achieve through economic growth? Growth for the purpose of growth is kind of meaningless. But if growth is for improving welfare, why isn’t that the focus, rather than GDP numbers? (And if it isn’t for welfare, what is it for?) That being said, the interviewer then asking “what’s the meaning of life” was really pointless and unnecessarily edgy. I also agree that not trying to come up with any policy proposal is kind of intellectually lazy and has some strong “I’m just the idea guy” vibes.
  - bnralt 4y ago
    I definitely agree that it's worth thinking about things like scarcity, our ultimate goals, what kind of societies we're creating, etc., and that an over focus on GDP growth or personal wealth is a problem. I've often talked about how much of our GDP is wasted on things that have a net negative value for society (but a positive value for GDP). The issues I have with Daly's approach, though, is in placing the blame on growth and acting as if a steady-state economy is the answer. Even if we froze the economy today, we'd still be emitting too much CO2 and we'd still be wasting tons of time and resources on things that have a net negative value on society. Being simply opposed to growth doesn't solve the real issues. It just unnecessarily alienates people who would otherwise be willing to address the actual problems, and also places you in opposition to good forms of growth that don't cause these problems (and may help solve them). And while I think it's important to think about the big questions, I don't think it should the focus of economists. The role of economists isn't to decide what our values and goals are, it's to give us an insight into how we can best pursue them after we decide those values and goals ourselves.
  - deleted 4y ago
    [deleted]
- kareemsabri 4y ago
  He's saying that growth (GDP) is an absolute measure that is only a sum without any costs. As one economist I can't recall put it "the hero of GDP is a cancer patient going through a costly divorce". GDP measures economic activity, with no consideration of the benefit obtained from that activity. The interview was pretty bad, I agree. It's not clear what a "steady state economy" would look like, or what measures are held steady.
  - dorgo 4y ago
    Is cancer treatment not a benefit? And I guess some people regard a divorce (even a costly one) as a benefit, or they wouldn't do it. Economic activity is an indication for benefit for people. I see no need to make a distinction between economic activity and a benefit obtained from that activity.
    - kareemsabri 4y ago
      This is a reductive definition of benefit. A rise in cancer treatments is probably not a good thing, all else equal.
- arisAlexis 4y ago
  It's a red flag when there are adjectives such as pioneering in the title
danielmarkbruce 4y ago
I'm not sure increases in efficiency result in increased GDP. To make that as clear as possible - imagine someone created low priced robots tomorrow that could make all your food, entertain you, build you a house etc etc for the one time fee of $100. They were incredibly efficient, consuming $10 worth of energy every year. GDP would fall off a cliff.
- asimpletune 4y ago
  Idk, it seems like one of those things that is hard to predict. Would gdp actually fall off a cliff? There would be a lot of steps that would have to happen along the way. Plus the premise isn’t really rooted in any kind of reality, so it may be a flawed argument to begin with. Just my $0.02
  - danielmarkbruce 4y ago
    Yes, it's hard to predict. Efficiency may or may not add to GDP. Which does point to how stupid it is.
- epistasis 4y ago
  And what would people now do with all their free time? They'd start to build other stuff. GDP would probably go through the roof, because if you measure the value of all that stuff in "old dollars" it would be incredible. And now in "new dollars" it's a tiny amount, but it also frees up human labor to do all sorts of new stuff, and these "new dollars" are so much more valuable. Money is a tricky social constructed phenomenon. When there's such a shocking big change to technology as you propose, there has to be something to account for the difference in what it can purchase.
  - danielmarkbruce 4y ago
    All this other stuff is, by current calculations, sub optimal. So all this other stuff would likely add to less than current GDP. And since current GDP has been replaced by 10's of dollars, total GDP would likely be much lower. But, if your point is that it's not clear then yes, but that's my point.
WalterBright 4y ago
> Things like automation, while highly efficient, result in most of the gains going to capital owners. More goes to society. You don't see it because it is spread thinly. Think of how nice it is to have a microwave, for example. The value of my time saved is far more valuable to me than what I paid for the microwave. Everything you and I buy we buy because the value of what we are buying is worth more to us than the money we give up to pay for it. > How society should deal with this is another interesting question. As I showed, society is getting the long end of the stick already.
- tomc1985 4y ago
  > More goes to society. You don't see it because it is spread thinly. Think of how nice it is to have a microwave, for example. The value of my time saved is far more valuable to me than what I paid for the microwave. This was the promise. But all we really have today is cost disease. For every microwave the US also has infrastructural costs that are 10x+ that of other countries and a culture that is being increasingly incentivized to hand over their wealth for short-term, materialistic gains, and goods/services that aren't worth the price being charged. To say nothing of the fact that in most cases, said microwaves leaves you with lower-quality results concomitant with the time you saved. Which really feels like all of life; we are being sold a bill of plenty that is only paper-thin
  - WalterBright 4y ago
    Do you own a microwave? I bet you do. I bet if it broke you'd buy another one, because you'll find it worth the money. Ditto for your other appliances, like your dishwasher, stove, oven, vacuum cleaner, toilet, shower, phone, etc. Don't forget the computer you bought to access HackerNews with!
    - tomc1985 4y ago
      My point is that those things are a red herring. The people peddling this shit peddle a narrative of increased efficiency, better life, and so on, focusing us on these little incremental improvements, while they pillage other parts of the world to bring you these things. And you very clearly overestimate the need for a microwave. A gas oven, range, or BBQ produces considerably better results for many things for only a 2x or 3x investment of time and effort. I have several friends that have opted not to own a microwave. Hell, large parts of the world don't have a microwave and they're fine. There's a good chance they are even building our microwaves for us. You know, I would rather we focus our efforts on lifting them up so that they can have their own microwaves and other nice things before I stand in line to buy yet another microwave, because it was made so poorly by microwave makers that cheap out on microwave building.
ETH_start 4y ago
>>Things like automation, while highly efficient, result in most of the gains going to capital owners. That is not true. When you exclude housing, capital's share of national income has slightly decreased over the last century (see Figure 3): https://www.brookings.edu/wp-content/uploads/2016/07/2015a_rognlie.pdf https://www.brookings.edu/wp-content/uploads/2016/07/2015a_r... Non-housing capital grows primarily through greater automation.
mola 4y ago
How are self driving cars growth drivers? What do they enable?
fnordpiglet 4y ago
I think betting on efficiency is essentially the same fallacy that he identifies in the article - that the future will solve the problems we create today. There’s also the mental exercise one can take of can we make GDP -> inf in a constrained system. Of course not. There are limits. Economics assumes no limits on growth. That’s absurd on the surface. Just like I can’t super saturate sugar into a water solution beyond a certain point, I can’t materially transform the material provided by the earth into useful economic production irrespective of the earths limits. That seems pretty much vacuously true. Hence his point.

bnralt 4y ago

I don't know, I read the interview and it honestly wasn't clear what he was saying. He never mentions any particular policy that should be enacted (other than tariffs against other countries that don't follow our lead), and the interviewer doesn't seem interested, opting instead to ask questions about cosmology. It's a bizarre interview. His issue seems to be mostly with overconsumption of resources. But instead of creating a sustainable economy that can achieve growth through other areas (increased efficiency, increased use of renewable resources), he instead comes out against any growth and advocates a steady-state economy. But again, no specifics, just vague generalities and digressions into cosmology (arguing that economics should take into account religious questions). I was honestly shocked by the low quality of the interview. If this was presented as an exchange between teenagers on Reddit, I would have believed it.

throw_nbvc1234 4y ago
This kind of topic is where podcasts shine, especially if the host is literate on the topic being discussed. Or even the raw transcript of this interview versus the content that ended up being published. I would be curious how population and demographic changes play into his model of a steady state economy.
strongpigeon 4y ago
I do share your gripes with the interviewer. However, I think that Daly’s questions regarding the ultimate end (meaning purpose) of economic growth are worth pondering. Basically what are we trying to achieve through economic growth? Growth for the purpose of growth is kind of meaningless. But if growth is for improving welfare, why isn’t that the focus, rather than GDP numbers? (And if it isn’t for welfare, what is it for?) That being said, the interviewer then asking “what’s the meaning of life” was really pointless and unnecessarily edgy. I also agree that not trying to come up with any policy proposal is kind of intellectually lazy and has some strong “I’m just the idea guy” vibes.
- bnralt 4y ago
  I definitely agree that it's worth thinking about things like scarcity, our ultimate goals, what kind of societies we're creating, etc., and that an over focus on GDP growth or personal wealth is a problem. I've often talked about how much of our GDP is wasted on things that have a net negative value for society (but a positive value for GDP). The issues I have with Daly's approach, though, is in placing the blame on growth and acting as if a steady-state economy is the answer. Even if we froze the economy today, we'd still be emitting too much CO2 and we'd still be wasting tons of time and resources on things that have a net negative value on society. Being simply opposed to growth doesn't solve the real issues. It just unnecessarily alienates people who would otherwise be willing to address the actual problems, and also places you in opposition to good forms of growth that don't cause these problems (and may help solve them). And while I think it's important to think about the big questions, I don't think it should the focus of economists. The role of economists isn't to decide what our values and goals are, it's to give us an insight into how we can best pursue them after we decide those values and goals ourselves.
- deleted 4y ago
  [deleted]
kareemsabri 4y ago
He's saying that growth (GDP) is an absolute measure that is only a sum without any costs. As one economist I can't recall put it "the hero of GDP is a cancer patient going through a costly divorce". GDP measures economic activity, with no consideration of the benefit obtained from that activity. The interview was pretty bad, I agree. It's not clear what a "steady state economy" would look like, or what measures are held steady.
- dorgo 4y ago
  Is cancer treatment not a benefit? And I guess some people regard a divorce (even a costly one) as a benefit, or they wouldn't do it. Economic activity is an indication for benefit for people. I see no need to make a distinction between economic activity and a benefit obtained from that activity.
  - kareemsabri 4y ago
    This is a reductive definition of benefit. A rise in cancer treatments is probably not a good thing, all else equal.
arisAlexis 4y ago
It's a red flag when there are adjectives such as pioneering in the title

danielmarkbruce 4y ago

I'm not sure increases in efficiency result in increased GDP. To make that as clear as possible - imagine someone created low priced robots tomorrow that could make all your food, entertain you, build you a house etc etc for the one time fee of $100. They were incredibly efficient, consuming $10 worth of energy every year. GDP would fall off a cliff.

asimpletune 4y ago
Idk, it seems like one of those things that is hard to predict. Would gdp actually fall off a cliff? There would be a lot of steps that would have to happen along the way. Plus the premise isn’t really rooted in any kind of reality, so it may be a flawed argument to begin with. Just my $0.02
- danielmarkbruce 4y ago
  Yes, it's hard to predict. Efficiency may or may not add to GDP. Which does point to how stupid it is.
epistasis 4y ago
And what would people now do with all their free time? They'd start to build other stuff. GDP would probably go through the roof, because if you measure the value of all that stuff in "old dollars" it would be incredible. And now in "new dollars" it's a tiny amount, but it also frees up human labor to do all sorts of new stuff, and these "new dollars" are so much more valuable. Money is a tricky social constructed phenomenon. When there's such a shocking big change to technology as you propose, there has to be something to account for the difference in what it can purchase.
- danielmarkbruce 4y ago
  All this other stuff is, by current calculations, sub optimal. So all this other stuff would likely add to less than current GDP. And since current GDP has been replaced by 10's of dollars, total GDP would likely be much lower. But, if your point is that it's not clear then yes, but that's my point.

WalterBright 4y ago

> Things like automation, while highly efficient, result in most of the gains going to capital owners. More goes to society. You don't see it because it is spread thinly. Think of how nice it is to have a microwave, for example. The value of my time saved is far more valuable to me than what I paid for the microwave. Everything you and I buy we buy because the value of what we are buying is worth more to us than the money we give up to pay for it. > How society should deal with this is another interesting question. As I showed, society is getting the long end of the stick already.

tomc1985 4y ago
> More goes to society. You don't see it because it is spread thinly. Think of how nice it is to have a microwave, for example. The value of my time saved is far more valuable to me than what I paid for the microwave. This was the promise. But all we really have today is cost disease. For every microwave the US also has infrastructural costs that are 10x+ that of other countries and a culture that is being increasingly incentivized to hand over their wealth for short-term, materialistic gains, and goods/services that aren't worth the price being charged. To say nothing of the fact that in most cases, said microwaves leaves you with lower-quality results concomitant with the time you saved. Which really feels like all of life; we are being sold a bill of plenty that is only paper-thin
- WalterBright 4y ago
  Do you own a microwave? I bet you do. I bet if it broke you'd buy another one, because you'll find it worth the money. Ditto for your other appliances, like your dishwasher, stove, oven, vacuum cleaner, toilet, shower, phone, etc. Don't forget the computer you bought to access HackerNews with!
  - tomc1985 4y ago
    My point is that those things are a red herring. The people peddling this shit peddle a narrative of increased efficiency, better life, and so on, focusing us on these little incremental improvements, while they pillage other parts of the world to bring you these things. And you very clearly overestimate the need for a microwave. A gas oven, range, or BBQ produces considerably better results for many things for only a 2x or 3x investment of time and effort. I have several friends that have opted not to own a microwave. Hell, large parts of the world don't have a microwave and they're fine. There's a good chance they are even building our microwaves for us. You know, I would rather we focus our efforts on lifting them up so that they can have their own microwaves and other nice things before I stand in line to buy yet another microwave, because it was made so poorly by microwave makers that cheap out on microwave building.

ETH_start 4y ago

>>Things like automation, while highly efficient, result in most of the gains going to capital owners. That is not true. When you exclude housing, capital's share of national income has slightly decreased over the last century (see Figure 3): https://www.brookings.edu/wp-content/uploads/2016/07/2015a_rognlie.pdf https://www.brookings.edu/wp-content/uploads/2016/07/2015a_r... Non-housing capital grows primarily through greater automation.

mola 4y ago

How are self driving cars growth drivers? What do they enable?

fnordpiglet 4y ago

I think betting on efficiency is essentially the same fallacy that he identifies in the article - that the future will solve the problems we create today. There’s also the mental exercise one can take of can we make GDP -> inf in a constrained system. Of course not. There are limits. Economics assumes no limits on growth. That’s absurd on the surface. Just like I can’t super saturate sugar into a water solution beyond a certain point, I can’t materially transform the material provided by the earth into useful economic production irrespective of the earths limits. That seems pretty much vacuously true. Hence his point.