The good old days
Andre Willers
5 Aug 2013
Synopsis:
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 !
Andre
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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, doi.org/m53). 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, doi.org/m59).
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"
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Appendix B
Abstract
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.
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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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