Help me understand economic growth

[mikegg]

Seems to me you should define rich, because the term is a moving target and most people 100 years ago would consider nearly every American alive today as "rich." The point is, the total amount of wealth is growing and has been since we started trading with each other.

Worrying about "running out of wealth" is like worrying about the sun running out of hydrogen... pointless. There is no reason whatsoever to believe that (unless of a global economic catastrophe unlike any other in history) wealth will stop growing, much less get smaller.

Why is it pointless? Isn't wealth the amount of resources you have? Land, fresh water, animals, trees, quality air, etc. If those supplies are diminishing, what makes you think wealth is increasing?

 

[DucatiMonster696]

wealth is not finite.

Inflation disagrees with that assessment.

Wealth can be both finite and infinite in nature depending on the decisions made by individuals and nations. Even during periods of economic hardship those who with insights and knowledge to be able to navigate the perilous waters of the marketplace can continually grow their wealth while others people or nations are quickly butting up against the reality of the finite nature of their own mismanaged wealth.

 

[DucatiMonster696]

Why is it pointless? Isn't wealth the amount of resources you have? Land, fresh water, animals, trees, quality air, etc. If those supplies are diminishing, what makes you think wealth is increasing?

Wealth could also be attached to the standard of living you are experiencing. Furthermore the goal of any free market it to push efficiency for the uses of resources used in the production of goods and services so that improvements and refinements in technology allow others to better make more efficient uses of the resources in society even when demand increases.

For example we've heard many times over predictions about "peak" oil and almost every time those predictions have been completely off due to improvements in technology (especially in vehicle technology) which have had the effect of steadily reducing our demand for the consumption of this resource. Today's cars are significantly more fuel efficient then cars say 20 to 30 years ago due to technological breakthroughs.

 

[OverVolt]

For all the OP bashing he asked a good question and sparked a good discussion. Dunno WTF peoples problems are these days with trying to intelligence dominate others.

Back when being smart wasn't about dominating other people, it was good to be smart and have complex discussions, ask questions, openly discuss things you didn't understand, and learn that way. Now its the opposite, IMO. I try to make everything as stupid as possible to avoid conflict because I don't know whose ass-backward worldview im going to rub against.

 

[mikegg]

What is the total amount of wealth in the United States 100 years ago. What is it today? That that look finite to you?

We transferred our natural resources and technology into the wealth we have today. The reason why we're not growing anymore is because we stopped using our natural resources to export like before.

If we discovered a cave with 1 trillion tons of oil, then you can say that we've created wealth - until we use it all.

GDP growth, to me, is really just a trade off with the natural resource deposits that we still currently have.

To expect GDP growth to sustain year in and year out is unreasonable.

 

[Throckmorton]

Seems to me you should define rich, because the term is a moving target and most people 100 years ago would consider nearly every American alive today as "rich." The point is, the total amount of wealth is growing and has been since we started trading with each other.

Worrying about "running out of wealth" is like worrying about the sun running out of hydrogen... pointless. There is no reason whatsoever to believe that (unless of a global economic catastrophe unlike any other in history) wealth will stop growing, much less get smaller.

What a ridiculous statement. I don't think anyone 100 years ago would consider someone working 60 hours a week, living in squalor, unable to afford healthy food, no health insurance, and no savings to be "rich".

 

[cwjerome]

Wait a minute, so you're saying that we can just magically create GDP by exchanging goods? Let's get this right. Wealth = standard of living. Standard of living = amount of resources you have. The more wealth you have, the higher standard of living you get.

Because we don't live in a planet with infinite amount of trees, fresh water, livestock, no matter how many times you trade, those resources NEVER increase. So if the resources never increase, tell me how your GDP can increase magically through trade? The only way they increase is if we find another habitable planet or we magically convert elements and atoms into anything we want.

Yea, I get that artificial inflation, debt, credit stuff. But at its core, economics is all about how much resources you have. This is why wealth is always static. If one person gets richer, then another must be poorer - unless we find new resources.

As long as we have our intelligence, creativity, and ambition, we can continue to create wealth. Those are not finite. And you are more right than you think... we are continually find new ways to arrange atoms into things that create higher standards of living. This is why genetically modified seed, laser leveling, slow drip systems, fertilizer, and machinery enable one farmer to grow 10x as much food for 5x less water as a farmer 100 years ago. Because of technology, we can do more with less and find newer methods and materials.

GDP has gone up for nearly all nations over the last 25 years, and 50 years, and 100 years. World GDP has increased 1000% in the last 1000 years. Globalization is raising living standards dramatically across the globe. These are obvious, elementary, common sense FACTS... wealth is created and keeps going up. The cruel, suicidal beliefs you're trying to promote simply carry no substance in this light.

 

[cwjerome]

Why is it pointless? Isn't wealth the amount of resources you have? Land, fresh water, animals, trees, quality air, etc. If those supplies are diminishing, what makes you think wealth is increasing?

No, resources include much more than simple natural things from the environment.

 

[cwjerome]

We transferred our natural resources and technology into the wealth we have today. The reason why we're not growing anymore is because we stopped using our natural resources to export like before.

If we discovered a cave with 1 trillion tons of oil, then you can say that we've created wealth - until we use it all.

GDP growth, to me, is really just a trade off with the natural resource deposits that we still currently have.

To expect GDP growth to sustain year in and year out is unreasonable.

You have a very primitive view of what wealth is and a very 20th century view of export theory. And yes, GDP growth HAS sustained over the years in this country since the beginning and in the world since humans have been alive. No idea why you think this 10,000 year trend will suddenly stop.

 

[cwjerome]

What a ridiculous statement. I don't think anyone 100 years ago would consider someone working 60 hours a week, living in squalor, unable to afford healthy food, no health insurance, and no savings to be "rich".

What you just described is the average condition of an American 100 years ago, whereas today, it the exception.

Nearly every American today has enough to eat, has access to central heating/cooling, indoor plumbing, conveniences like radios, phones, and TVs, etc. Those are luxuries average people 100 years ago would have liked to have.

 

[Throckmorton]

What you just described is the average condition of an American 100 years ago, whereas today, it the exception.

Nearly every American today has enough to eat, has access to central heating/cooling, indoor plumbing, conveniences like radios, phones, and TVs, etc. Those are luxuries average people 100 years ago would have liked to have.

100 years ago 1/3 of Americans were farmers. Those people had better food, didn't work many hours per week, and had a very high standard of living

http://www.agclassroom.org/gan/timeline/farmers_land.htm

 

[Paul98]

The materials don't come from no where, the middle product doesn't come from no where, the end product doesn't come from no where.