Can Economic Growth Go Down to Near Zero?

[Blake]

I mean looking at the bigger picture.

A thread running through society which says "You wont be happy if your hair doesn't meet standards XYZ" with XYZ changing according to the society and prevailing fashions (depending on the society, like obviously in Muslim countries the prevailing style never goes out of fashion).

But the basic thing is, it's rubbish.

[Geronimo]

Originally posted by Blake
I mean looking at the bigger picture.

A thread running through society which says "You wont be happy if your hair doesn't meet standards XYZ" with XYZ changing according to the society and prevailing fashions (depending on the society, like obviously in Muslim countries the prevailing style never goes out of fashion).

But the basic thing is, it's rubbish.

I think the thread is more like "If your hair doesn't meet standards XYZ clearly you have odd or bad taste and we don't want to associate with you".

[Krill]

Happiness is overrated. Anger at the Establishment

[Kidlicious]

Originally posted by Ben Kenobi
Ask a woman about hairstylists...

Yes, people have the option of cutting their own hair. Why don't they do it? Why do people prefer to pay others 20 dollars for a haircut?

The fact is that a lot of people pay people to cut/style their hair, and it's not counted as economic growth, but when they go to SuperCuts it is. Do you see my point now?

The value of the wood is associated with the demand. So long as there is a demand for certain services, then yes they have a value associated with them, no different from primary goods.

I know what you are saying and that it should make common sense, but economics doesn't work that way. Goods have values because they have a demand associated with them, not because they have a mythical "intrinsic value".

I'm not arguing with you about the value of the service. I'm arguing about counting it as economic growth. It costs money to hire a hit man. Do you want to count that?

There are many services provided that would certainly exist in a competitive environment, and specialisation will continue to take place, just as it always has. The division between services and primary goods is an unnecessary distinction. Do you know how many people have to work to bring in a board foot of lumber?

I'm telling you that a lot of the people that you count as necessary to bring lumber to market are only necessary to the company making the profit, not actually necessary in an economic sense.

[Vanguard]

Originally posted by Ben Kenobi
Umm, the US GDP did drop 30 percent overall from about 820 billion to about 600 billion, from the height of the boom in 1929, to the depth of the depression in 1933.

So in 4 years you have a 30 percent total decline. The worst year was between 1931-1932, which dropped 12.8 percent in one year, after a decline of 6.5 percent the year previous.

So if we split the year most favourably to you, that would produce a 23 percent decline from may to october of 1931, and a 0.5 percent negative from November of 1931 to April of 1932. Then in the second half of the year in question, from november of 1930 to April of 1931 you have, at most an 11 percent decline. So if we add the two together you end up with a decline of 17 percent.

So even if we assume the most favourable possible conditions, we only get a maximum of 17 percent in the year from november of 1930 to october of 1931.

You know, I don't really care if US GDP decreased by 20% in some arbitrary 12 month period during the Depression. It was just an example.

Regardless, the question is, I think, numerically meaningless. The very rapid decrease in the amount of money in the US economy at this time makes estimating GDP impossible for monthly periods.

The Industrial Production index did fall by 20% between 1931 and 1932. This seems as good an indicator to me of general economic conditions as any other available statistic.

Interesting. In terms of GDP, the worst was over by April of 1932, when Hoover still had 8 months to go in his term. Didn't know that. Did we need Roosevelt at all?

Lol. In terms of GDP, the worst of the decline was over by then. But that still left us with 30% less GDP than we started with.

Which means that 30% of the US population could have been starving to death. (Note that this is just a crude example---- please don't quote Depression hunger statistics at me.).

If you fall off a 50 foot cliff, is the worst over once you hit the ground? Depressions do have bad effects other than decreasing the GDP number.

Not that I'm a Hoover basher or anything. I think he gets a bit of bum rap. And, yeah, Roosevelt certainly had no coherent economic ideas.

But so what? Nobody had a clue. Keynes was about twice as smart as anybody else and he was a complete idiot.

[Vanguard]

The fact is that a lot of people pay people to cut/style their hair, and it's not counted as economic growth, but when they go to SuperCuts it is. Do you see my point now?

Yes, this is really the basic question of the monetization of services. Perhaps it might clarify things to ask:

Why does paying a barber $20 to cut your hair count as $20 in economic growth when cutting your own hair counts as $0 in economic growth? Shouldn't cutting your own hair count as $15 dollars worth of economic growth?

[Blake]

Originally posted by Vanguard


Yes, this is really the basic question of the monetization of services. Perhaps it might clarify things to ask:

Why does paying a barber $20 to cut you hair count as $20 in economic growth when cutting your own hair counts as $0 in economic growth? Shouldn't cutting your own hair count as $15 dollars worth of economic growth?

Because of the religion of economy, praise money! The ritual of exchanging holy dollars gives divine value to the sacred transactions. Hallelujah!

[Geronimo]

Originally posted by Vanguard


Yes, this is really the basic question of the monetization of services. Perhaps it might clarify things to ask:

Why does paying a barber $20 to cut you hair count as $20 in economic growth when cutting your own hair counts as $0 in economic growth? Shouldn't cutting your own hair count as $15 dollars worth of economic growth?

hrmm... so if everybody were somehow totally self sufficient there would be zero productivity by most economic measures whereas if everybody did nothing for themselves and everything they did was for the consumption of others there would appear to be much more productivity. I wonder how much this distorts the picture of increased productivity offered by most economic metrics?