Monday, August 05, 2013

The Good Old Days .

The good old days

Andre Willers
5 Aug 2013

The year of the Good Old Days was 1978 according to GPI .
Discussion :
1.What is GPI ?
Genuine Progress Indicator .
“The GPI indicator is based on the concept of sustainable income, presented by economist John Hicks (1948). The sustainable income is the amount a person or an economy can consume during one period without decreasing his or her consumption during the next period. In the same manner, GPI depicts the state of welfare in the society by taking into account the ability to maintain welfare on at least the same level in the future.”
See the Wikipedia above for a fuller explication .
2.Best year was 1978
See Appendix A  and Appendix B
3.Inflexion point :
Note the inflexion point at population of 9.6 billion . (Appendix B) , representing a ceiling of about $7 000/capita . This seems to be the planetary carrying capacity .
 See Appendix C .
This population is estimated to happen around 2050 .
Things will get really interesting then .
Everybody , first and third world , will start feeling really ,really dissatisfied . Things go to Hell in a handbasket .
4.Breathing space :
In the meantime , we are sliding into the Singularity .
Technological change keeps on accellerating . This creates new wealth (eg fracking , clathrates , bio-engineering, etc).
We must keep on generating real sustainable wealth faster than resource exhaustion .
5.We will be deep into the Singularity before society collapses .
6.A close run race.
“The nearest run thing you ever saw in your life”  Wellington on the Battle of Waterloo .
Run faster ! Extinction is gaining !
Appendix A
PECULIAR fashion choices, an oil crisis and embarrassing hairstyles notwithstanding, the 1970s were the good old days. A new study of global wealth says prosperity peaked at the end of that decade. Economic policy-makers, take note: we have been heading downhill since 1978 (see "1978: in this year...").
Governments have tended to build economic policies around gross domestic product (GDP), the sum of all monetary transactions in an economy. GDP has risen fairly steadily – and often dramatically – since the second world war, implying the world has become more prosperous.
Critics point out, however, that GDP only tells part of the story (see graphs). Its measure of prosperity fails to account for social factors and environmental costs. Oil spills and crime, for example, increase GDP because money must be spent on clean-up and replacement of lost goods, yet few would claim that they increase the general well-being of a state.
To correct this, many economists have begun searching for more comprehensive measures of economic progress that reflect the overall state of a country. One that has been widely used is the Genuine Progress Indicator (GPI), which adjusts expenditure in 26 ways to account for social and environmental costs, such as pollution, crime and inequality, and for beneficial activities where no money changes hands, such as housework and volunteering.
Ida Kubiszewski and Robert Costanza at the Australian National University in Canberra and their colleagues gathered estimates of GPI for 17 countries – totalling more than half the world's population and GDP – and assembled them into the first-ever global picture of how GPI has changed over the years. They found that GPI per person peaked in 1978 and has been declining slowly but steadily ever since (Ecological Economics, This contrasts sharply with the steady increase in GDP per capita since then, and implies that social and environmental woes have outpaced the growth of monetary wealth.
"We're not making a social profit," says Costanza. In particular, growing inequality of incomes and environmental degradation are the biggest factors dragging GPI down.
The study confirms the hunch of many environmental economists that the costs of economic growth have outweighed its benefits for several decades. "A lot of people working in the field were pretty sure it happened, but didn't get detected in GDP," says Jacqueline McGlade of University College London, and former head of the European Environment Agency.
Not all economists agree that GPI is an accurate measure of overall welfare.Nicolas Kosoy, an ecological economist at McGill University in Montreal, Canada, argues that no single indicator can capture the complexity of the interplay between economics, environment and social development. There is also no unanimity that the world is worse off than it was. "If you start looking at the broader picture of things that contribute to quality of life, I think there's no doubt that the average person in developing countries is better off now than in the 1970s," says Marianne Fay, chief economist for the World Bank's Sustainable Development Network in Washington DC.
McGlade points out that over the past two decades, world poverty rates have fallen from 42 per cent in the mid 1990s to a projected value of 15 per cent for 2015, representing half a billion people lifted out of poverty. Other indicators also support this view. Life expectancy has risen an average of 12 years for women and 11 years for men worldwide in the past 40 years. And according to surveys that ask people to assess their well-being, life satisfaction continues to rise in a majority of countries, says Ed Diener, a happiness researcher at the University of Illinois at Urbana-Champaign (Journal of Personality and Social Psychology,
GPI and other indicators like it might not be perfect, but they can help policy-makers do a better job of balancing the costs and benefits of economic development, says McGlade. "As these accounting methods take root, governments will be able to see very quickly how their management causes problems in environmental viability," she says. The US states of Maryland and Vermont now use GPI in their economic planning, and several other states are phasing it in. As a result, environmental and social costs will start to figure more directly in government decisions. "For once," says McGlade, "I'm reasonably optimistic."
This article appeared in print under the headline "1978 was our wonder year"

Appendix B
While global Gross Domestic Product (GDP) has increased more than three-fold since 1950, economic welfare, as estimated by the Genuine Progress Indicator (GPI), has actually decreased since 1978. We synthesized estimates of GPI over the 1950–2003 time period for 17 countries for which GPI has been estimated. These 17 countries contain 53% of the global population and 59% of the global GDP. We compared GPI with Gross Domestic Product (GDP), Human Development Index (HDI), Ecological Footprint, Biocapacity, Gini coefficient, and Life Satisfaction scores. Results show a significant variation among these countries, but some major trends. We also estimated a global GPI/capita over the 1950–2003 period. Global GPI/capita peaked in 1978, about the same time that global Ecological Footprint exceeded global Biocapacity. Life Satisfaction in almost all countries has also not improved significantly since 1975. Globally, GPI/capita does not increase beyond a GDP/capita of around $7000/capita. If we distributed income more equitably around the planet, the current world GDP ($67 trillion/yr) could support 9.6 billion people at $7000/capita. While GPI is not the perfect economic welfare indicator, it is a far better approximation than GDP. Development policies need to shift to better account for real welfare and not merely GDP growth.
Appendix C

13 June 2013 – The current world population of 7.2 billion is projected to increase by 1 billion over the next 12 years and reach 9.6 billion by 2050, according to a United Nations report launched today, which points out that growth will be mainly in developing countries, with more than half in Africa.
“Although population growth has slowed for the world as a whole, this report reminds us that some developing countries, especially in Africa, are still growing rapidly,” said the Under-Secretary-General for Economic and Social Affairs, Wu Hongbo in a press release on the report.
The report, World Population Prospects: the 2012 Revision, notes that the population of developed regions will remain largely unchanged at around 1.3 billion from now until 2050. In contrast, the 49 least developed countries are projected to double in size from around 900 million people in 2013 to 1.8 billion in 2050.
Compared to previous assessments of world population trends, the new projected total population is higher, mainly due to new information obtained on fertility levels of certain countries. For example, in 15 high-fertility countries of sub-Saharan Africa, the estimated average number of children per woman has been adjusted upwards by more than 5 per cent.
“In some cases, the actual level of fertility appears to have risen in recent years; in other cases, the previous estimate was too low,” said the Director of the Population Division in the UN’s Department of Economic and Social Affairs, John Wilmoth, during a press conference in New York.
“While there has been a rapid fall in the average number of children per woman in large developing countries such as China, India, Indonesia, Iran, Brazil and South Africa […] rapid growth is expected to continue over the next few decades in countries with high levels of fertility such as Nigeria, Niger, the Democratic Republic of the Congo, Ethiopia and Uganda but also Afghanistan and Timor-Leste, where there are more than five children per woman.”
Mr. Wilmoth added that changes in fertility rates over the next few decades could have major consequence for population size, structure and distribution in the long run.
The report notes that India is expected to become the world’s largest country, passing China around 2028, when both countries will have populations of 1.45 billion. After that, India’s population will continue to grow and China’s is expected to start decreasing. Meanwhile, Nigeria’s population is expected to surpass that of the United States before 2050.
Europe’s population is projected to decline by 14 per cent, the report states, and Mr. Wilmoth warned that the continent is already facing challenges in providing care and support for a rapidly aging population.
Overall, life expectancy is projected to increase in developed and developing countries in future years. At the global level, it is projected to reach 76 years in the period 2045-2050 and 82 years in 2095-2100. By the end of the century, people in developed countries could live on average around 89 years, compared to about 81 years in developing regions.
The report’s figures are based on a comprehensive review of available demographic data from 233 countries and areas around the world, including the 2010 round of population censuses.


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