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Growth in GDP and the exponential calculation

...on serious topics that don't fit anywhere else at present.
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Lifelinking
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Growth in GDP and the exponential calculation

#1 Post by Lifelinking » December 28th, 2013, 6:21 pm

I stumbled across a video featuring the late Professor Albert A. Bartlett



What a smashing communicator he was. Anyhoo.

Bartlett famously applied his arithmetic to things such as population growth and energy use, but I got to thinking about the way we use growth in GDP as both a measure of how well we are doing and as a target for us to try and achieve. (of course GDP is intimately related to things such as population size and energy use)

Applying Bartlett's equation to a country that managed to consistently maintain a growth rate in GDP of say 2% a year, then in a period of 70 years the GDP of our imagined country would have doubled, twice.

If a country manages to sustain growth as high as 7% per year, then of course the time it takes for the GDP to double would reduce to 10 years.

I would like to ask the good folk here a couple of questions. Firstly, do you think that continuing to use increasing GDP as a measure of success or failure is sensible? Secondly, is economic growth of the kind we have come to expect or aspire to, sustainable?
"Who thinks the law has anything to do with justice? It's what we have because we can't have justice."
William McIlvanney

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Lifelinking
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Re: Growth in GDP and the exponential calculation

#2 Post by Lifelinking » December 28th, 2013, 6:29 pm

Thank ye oh great spirit of embedding clips.... :notworthy:
"Who thinks the law has anything to do with justice? It's what we have because we can't have justice."
William McIlvanney

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Dave B
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Re: Growth in GDP and the exponential calculation

#3 Post by Dave B » December 28th, 2013, 6:42 pm

Seems to remember this was something from ancient China - only rice. A contract about repayment or tax or something that the payer too late realised because he did not understand the maths.

My father, a blacksmith, had something similar about a horse shoe. The smith told the customer that he would do the job for a penny for the first inch of the length of iron needed for the shoe, tuppence for the next inch, four pence for the next and so on. Then double the cost of the last inch for the first hole, double again for the second . . .

I works out to be a bloody expensive shoe!
"Look forward; yesterday was a lesson, if you did not learn from it you wasted it."
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Alan H
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Re: Growth in GDP and the exponential calculation

#4 Post by Alan H » December 28th, 2013, 6:51 pm

Lifelinking wrote:Thank ye oh great spirit of embedding clips.... :notworthy:
:-)
Alan Henness

There are three fundamental questions for anyone advocating Brexit:

1. What, precisely, are the significant and tangible benefits of leaving the EU?
2. What damage to the UK and its citizens is an acceptable price to pay for those benefits?
3. Which ruling of the ECJ is most persuasive of the need to leave its jurisdiction?

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Alan H
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Re: Growth in GDP and the exponential calculation

#5 Post by Alan H » December 28th, 2013, 7:15 pm

Sobering...but something we all - society, politicians and economists - need to get to grips with and do something about.
Alan Henness

There are three fundamental questions for anyone advocating Brexit:

1. What, precisely, are the significant and tangible benefits of leaving the EU?
2. What damage to the UK and its citizens is an acceptable price to pay for those benefits?
3. Which ruling of the ECJ is most persuasive of the need to leave its jurisdiction?

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Alan H
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Re: Growth in GDP and the exponential calculation

#6 Post by Alan H » December 28th, 2013, 11:39 pm

The talk LL gave is in eight parts - this is it all in one:

Alan Henness

There are three fundamental questions for anyone advocating Brexit:

1. What, precisely, are the significant and tangible benefits of leaving the EU?
2. What damage to the UK and its citizens is an acceptable price to pay for those benefits?
3. Which ruling of the ECJ is most persuasive of the need to leave its jurisdiction?

Nick
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Re: Growth in GDP and the exponential calculation

#7 Post by Nick » December 29th, 2013, 12:09 pm

Dave B wrote:Seems to remember this was something from ancient China - only rice. A contract about repayment or tax or something that the payer too late realised because he did not understand the maths.
The story I remember concerned the inventor of chess and a delighted emperor...

Nick
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Re: Growth in GDP and the exponential calculation

#8 Post by Nick » December 29th, 2013, 12:37 pm

Bartlett famously applied his arithmetic to things such as population growth and energy use,
...even though, as he acknowledged, energy use has peaked, and the Malthusian trap has yet to occur, and recedes further each year.
but I got to thinking about the way we use growth in GDP as both a measure of how well we are doing and as a target for us to try and achieve. (of course GDP is intimately related to things such as population size and energy use)
GDP per head would go some way to allowing for that.
Applying Bartlett's equation to a country that managed to consistently maintain a growth rate in GDP of say 2% a year, then in a period of 70 years the GDP of our imagined country would have doubled, twice.
Which is what we have seen in the developed West.
If a country manages to sustain growth as high as 7% per year, then of course the time it takes for the GDP to double would reduce to 10 years.
This, and more, is what we have seen in the developing world after the abandonment of socialism.
I would like to ask the good folk here a couple of questions. Firstly, do you think that continuing to use increasing GDP as a measure of success or failure is sensible?
Succinctly, an increase in the level of GDP is very important indeed, but cannot be the only determinant of such a concept as "economic success".
Secondly, is economic growth of the kind we have come to expect or aspire to, sustainable?
Indeed it is. Not least because a large amount of the growth we enjoy comes from using assets more efficiently, not just using more assets. If the level of technology hadn't changed over the period since 1939, BT would, apparently, need to employ every single school-leaver, just to operate the phone system.

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Alan H
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Re: Growth in GDP and the exponential calculation

#9 Post by Alan H » December 29th, 2013, 12:56 pm

Nick wrote:
Bartlett famously applied his arithmetic to things such as population growth and energy use,
...even though, as he acknowledged, energy use has peaked, and the Malthusian trap has yet to occur, and recedes further each year.
Yes, he deals with that.
Applying Bartlett's equation to a country that managed to consistently maintain a growth rate in GDP of say 2% a year, then in a period of 70 years the GDP of our imagined country would have doubled, twice.
Which is what we shave seen in the developed West.
Yes indeed. That's a good bit of the problem, isn't it?
If a country manages to sustain growth as high as 7% per year, then of course the time it takes for the GDP to double would reduce to 10 years.
This, and more, is what we have seen in the developing world after the abandonment of socialism.
You do realise the implications of that continued doubling, don't you?
I would like to ask the good folk here a couple of questions. Firstly, do you think that continuing to use increasing GDP as a measure of success or failure is sensible?
Succinctly, an increase in the level of GDP is very important indeed, but cannot be the only determinant of such a concept as "economic success".
Therein lies the problem.
Secondly, is economic growth of the kind we have come to expect or aspire to, sustainable?
Indeed it is. Not least because a large amount of the growth we enjoy comes from using assets more efficiently, not just using more assets. If the level of technology hadn't changed over the period since 1939, BT would, apparently, need to employ every single school-leaver, just to operate the phone system.
This is all about resources and the inevitable consequences of using them at the same rates as we have been. It is not sustainable.
Alan Henness

There are three fundamental questions for anyone advocating Brexit:

1. What, precisely, are the significant and tangible benefits of leaving the EU?
2. What damage to the UK and its citizens is an acceptable price to pay for those benefits?
3. Which ruling of the ECJ is most persuasive of the need to leave its jurisdiction?

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Lifelinking
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Re: Growth in GDP and the exponential calculation

#10 Post by Lifelinking » December 29th, 2013, 10:42 pm

Echoing what Alan says in his response above, I reckon Bartlett was very simply yet elegantly pointing out that we are living in a fools paradise.
"Who thinks the law has anything to do with justice? It's what we have because we can't have justice."
William McIlvanney

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Alan H
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Re: Growth in GDP and the exponential calculation

#11 Post by Alan H » May 28th, 2014, 11:18 pm

In yesterday's Guardian by George Monbiot: It's simple. If we can't change our economic system, our number's up

Or the fully referenced version on his website: The Impossibility of Growth
Alan Henness

There are three fundamental questions for anyone advocating Brexit:

1. What, precisely, are the significant and tangible benefits of leaving the EU?
2. What damage to the UK and its citizens is an acceptable price to pay for those benefits?
3. Which ruling of the ECJ is most persuasive of the need to leave its jurisdiction?

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Alan H
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Re: Growth in GDP and the exponential calculation

#12 Post by Alan H » May 28th, 2014, 11:21 pm

Alan H wrote:In yesterday's Guardian by George Monbiot: It's simple. If we can't change our economic system, our number's up

Or the fully referenced version on his website: The Impossibility of Growth
As the philosopher Michael Rowan points out, the inevitabilities of compound growth mean that if last year’s predicted global growth rate for 2014 (3.1%) is sustained, even if we were miraculously to reduce the consumption of raw materials by 90% we delay the inevitable by just 75 years(15). Efficiency solves nothing while growth continues.
Alan Henness

There are three fundamental questions for anyone advocating Brexit:

1. What, precisely, are the significant and tangible benefits of leaving the EU?
2. What damage to the UK and its citizens is an acceptable price to pay for those benefits?
3. Which ruling of the ECJ is most persuasive of the need to leave its jurisdiction?

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Dave B
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Re: Growth in GDP and the exponential calculation

#13 Post by Dave B » May 29th, 2014, 10:00 am

Yup, resources are not infinite - the lemmings find that out regularly. In the end growth is always limited and it will be catastrophically if we are not careful.

I often wonder if what we do as individuals makes a lot of difference: I subscribe to the, "If it's yellow let it mellow, if it's brown flush it down," school of loo use (but then, I live alone), recycle whatever I can, don't use the car if I can avoid it, go for ebooks rather than paper ones, put my dressing gown on if cold just before bedtime (rather than turn the heater on flat out) etc. etc. but happily consume electronics and other toys by the van load (do I need two tablets (one very cheapo but still a lump of consumed resources that will take energy to recover a percentage of), a Kindle and another (again cheapo) ereader?) OK, some get passed on to others (with the request to dispose of them kindly) but . . .

On the recycling front, an article claimed that pulverised electronics have a better gold yield than some ore beds. Hopefully the pulverisation takes less energy and causes less pollution than the extraction from Mother Earth! I would guess that the extraction and purification processes are much the same - lots of nasty chemicals.
"Look forward; yesterday was a lesson, if you did not learn from it you wasted it."
Me, 2015

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Alan H
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Re: Growth in GDP and the exponential calculation

#14 Post by Alan H » May 29th, 2014, 10:06 am

I suspect, Dave, that your sacrifices have extended the time before meltdown by something less that a pico second...
Alan Henness

There are three fundamental questions for anyone advocating Brexit:

1. What, precisely, are the significant and tangible benefits of leaving the EU?
2. What damage to the UK and its citizens is an acceptable price to pay for those benefits?
3. Which ruling of the ECJ is most persuasive of the need to leave its jurisdiction?

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Dave B
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Re: Growth in GDP and the exponential calculation

#15 Post by Dave B » May 29th, 2014, 10:36 am

Alan H wrote:I suspect, Dave, that your sacrifices have extended the time before meltdown by something less that a pico second...
And six billion pico seconds are . . .

Shit!
"Look forward; yesterday was a lesson, if you did not learn from it you wasted it."
Me, 2015

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