I feel like this could have been a lot better if it were more concrete.
What's wrong with wanting GDP growth?
- Consider two families A and B, each with two earners and a small child. The parents of family A both work full time, earning $125k each, and they spend $20k/yr on childcare. The parents of family B each work part time, earn $110k per year each, and together with help from one grandparent are able to care for their small child, and spend more hours together. Family A contributes more to GDP than family B, but are they better off? Or are the benefits of seeing more of their child's early years greater than the difference in income?
- At the onset of a recession, a company forecasts that its business will shrink; they will both need less labor, and need to reduce payroll. They offer to allow their employees to choose to work part time with a prorated decrease in compensation. Employee A and B are initially paid the same. A supports a family and wants to continue working at 100%. B is single, chooses to work at 60% for the next year, and spends the extra time on hobbies and spending more time with friends/family. Is B really "poorer"? Or for the right life circumstances, is working less and enjoying leisure more richer?
- A country grows its GDP over a 40 year period, but increases in the costs of housing, education, and healthcare are much sharper than wage growth. The older generation could feed and house (buy!) a family on a single income. A college student could pay for their housing and education by working part time. The younger generation can work full time at minimum wage and not afford rent on a 1BD apt, and it can take decades to pay for university. Is the country richer?
Never mind the very long term resource and physical limits on growth -- are we already at a point where striving for growth has failed to make most of us better off?
> The parents of family A both work full time, earning $125k each, and they spend $20k/yr on childcare.
> The parents of family B each work part time, earn $110k per year each
family B is better off, at least financially, because they earn more after taking away child-care costs (and also somehow they have free labour from a grandparent). Family A earns $125k-$20k=$105k for full time work, where as family B earns $110k (for part time work).
The comparison isn't really apples to apples tbh.
> What's wrong with wanting GDP growth?
nothing is wrong - the problem with framing it this way is the underlying assumption of equity of distribution of the increased wealth.
GDP measures how much work is produced, not how much benefit the people obtain from said work, nor how much residual wealth remains after consumption.
It's _often_ the case that GDP growth is associated with increasing quality of life, but there's no such guarantee from just GDP growth. Quality of life improves from political and societal improvements, which GDP growth is a necessary, but insufficient condition.
You got the numbers wrong; I said each family had two earners, and I said they made $125k each and $110k each, deliberately setting up family A to have $230k after childcare and family B to have $220k. Both are clearly comfortable, but family B is apparently working less but at a higher effective hourly rate. With $10k/yr less, less work, and more time with their young child, I think many people would still say family B is coming out ahead.
> GDP measures how much work is produced
But that's not even true. It only seeks to track exchanges where money changed hands. If a childcare center closes and the parents care for their own kids, the same work can be done, but it's not included GDP. If I grow some of my own vegetables from seed which I otherwise might have bought from the grocery store, neither my labor nor the value I derive from that produce contributes to GDP.
> nothing is wrong - the problem with framing it this way is the underlying assumption of equity of distribution of the increased wealth.
Even without concerns about the income distribution, we know that what people actually value isn't just money, but GDP sums over transactions and ignores plenty of factors that may do as much or more for utility. Any time people choose to retire when they could keep working, or pick a career other than the one that would bring them the greatest expected income, they demonstrate that non-monetary factors can easily outweigh their profit-maximizing drive. But GDP doesn't attempt to measure those other factors.
This sounds outlandish only because we've lived with this system for so long, but it would be entirely reasonable for the BLS or some other body to run monthly or quarterly surveys to get information on changes of those other factors, and though it would be imperfect, we could approach something that looked more like a utility function for real humans. How hard would it be to ask a decently large group of people regularly:
- How satisfied are you with your health? Are you inhibited in doing the things you'd like by illness, injury, disability or aging?
- How secure are you in your housing? In your access to health care? In your ability to feed yourself and your family?
- How stressed are you?
- How happy are you with your relationships with close friends or family?
- Do you feel you have the time and resources to learn and grow in the ways that are important to you?
- Do you regularly engage activities that support finding a flow state?
- Do you find beauty in your environment?
Etc etc. I won't pretend that I know all the questions to ask, or how scores for their answers should be weighted. But _something_ should try to measure, "Are we happy or satisfied in our lives?" and not just "What are we paid?". Kuznets introduced the modern form of G(D|N)P almost 90 years ago, and he recognized its shortcomings then, and I'm frankly disappointed that at some point we didn't get around to at least a serious attempt at replacing it with something better.
What's wrong with wanting GDP growth?
- Consider two families A and B, each with two earners and a small child. The parents of family A both work full time, earning $125k each, and they spend $20k/yr on childcare. The parents of family B each work part time, earn $110k per year each, and together with help from one grandparent are able to care for their small child, and spend more hours together. Family A contributes more to GDP than family B, but are they better off? Or are the benefits of seeing more of their child's early years greater than the difference in income?
- At the onset of a recession, a company forecasts that its business will shrink; they will both need less labor, and need to reduce payroll. They offer to allow their employees to choose to work part time with a prorated decrease in compensation. Employee A and B are initially paid the same. A supports a family and wants to continue working at 100%. B is single, chooses to work at 60% for the next year, and spends the extra time on hobbies and spending more time with friends/family. Is B really "poorer"? Or for the right life circumstances, is working less and enjoying leisure more richer?
- A country grows its GDP over a 40 year period, but increases in the costs of housing, education, and healthcare are much sharper than wage growth. The older generation could feed and house (buy!) a family on a single income. A college student could pay for their housing and education by working part time. The younger generation can work full time at minimum wage and not afford rent on a 1BD apt, and it can take decades to pay for university. Is the country richer?
Never mind the very long term resource and physical limits on growth -- are we already at a point where striving for growth has failed to make most of us better off?