World Economic Equilibrium: Worth looking at again?

[asterism]

The way you get "economic equilibrium" on the planet is to make everyone as rich as we are.

well that is impossible because there simply are not enough resources for even half the present population to share our living standards.

So exactly how do you plan to redefine our wealth?

It's a race toward the bottom Toro, not toward the top. Every previous model since the industrial revolution began had the advantage of exploiting massive virgin resources. That won't happen again.

It's a race to the top.

If it were a race to the bottom, incomes would continuously be falling. But globally, incomes have been rising pretty consistently, current recession notwithstanding.

Thomas Malthus said that we didn't have enough resources, and he said that 200 years ago, just before mankind was about to embark on the greatest period of wealth creation the planet has ever seen.

Keyes was a Malthusian and I've been taught even by Keynesian economists that Keynes was wrong about Malthus' view on full employment.

Economic: Keynes On Malthus And Ricardo Theories

 

[Toro]

well that is impossible because there simply are not enough resources for even half the present population to share our living standards.

So exactly how do you plan to redefine our wealth?

It's a race toward the bottom Toro, not toward the top. Every previous model since the industrial revolution began had the advantage of exploiting massive virgin resources. That won't happen again.

It's a race to the top.

If it were a race to the bottom, incomes would continuously be falling. But globally, incomes have been rising pretty consistently, current recession notwithstanding.

Thomas Malthus said that we didn't have enough resources, and he said that 200 years ago, just before mankind was about to embark on the greatest period of wealth creation the planet has ever seen.

Keyes was a Malthusian and I've been taught even by Keynesian economists that Keynes was wrong about Malthus' view on full employment.

Economic: Keynes On Malthus And Ricardo Theories

Keynes was right about some things, wrong about others.

 

[rdean]

​

Bush created jobs faster then they moved to China, until Democrats controlled Congress in 2007.

Of course you have no link to "facts" you apparently just "made up". Why do you guys do that? When you make up pure bullshit, you take away the jobs of the Republican leadership. You're supposed to wait for the lies, not make them up yourself.

Bush ended with a 0.28% rate of job growth. Under Republicans, more than 2.4 million jobs were moved to China from 2001 to 2008 using tax break and subsidies. The Republicans working with the Chamber of Commerce and China gave seminars across the nation teaching companies how to outsource to China.

The Chamber of Commerce received millions from China. The Chamber of Commerce gave 75 million to the GOP just before the election and 180 million during the last year. Gee, I wonder where that money came from?

Well, the Republican controlled Supreme Court made sure those organizations don't have to tell.

It's not really very hard connecting the dots.

 

[Toro]

​

Bush created jobs faster then they moved to China, until Democrats controlled Congress in 2007.

Of course you have no link to "facts" you apparently just "made up". Why do you guys do that? When you make up pure bullshit, you take away the jobs of the Republican leadership. You're supposed to wait for the lies, not make them up yourself.

Bush ended with a 0.28% rate of job growth. Under Republicans, more than 2.4 million jobs were moved to China from 2001 to 2008 using tax break and subsidies. The Republicans working with the Chamber of Commerce and China gave seminars across the nation teaching companies how to outsource to China.

The Chamber of Commerce received millions from China. The Chamber of Commerce gave 75 million to the GOP just before the election and 180 million during the last year. Gee, I wonder where that money came from?

Well, the Republican controlled Supreme Court made sure those organizations don't have to tell.

It's not really very hard connecting the dots.

Job growth under Bush was the weakest of any post-war recovery. Even from 2003-06, job growth was relatively anemic. In the 96 months was President, 40 months saw declines in nonfarm payrolls.

I don't necessarily blame Bush for that, but partisans are willing to believe whatever confirms their biases, even if it isn't true.

 

[loosecannon]

Global Economic Equilibrium is just another way of saying Maintaining The Status Quo.

actually it is the exact opposite of that.

 

[loosecannon]

The way you get "economic equilibrium" on the planet is to make everyone as rich as we are.

well that is impossible because there simply are not enough resources for even half the present population to share our living standards.

So exactly how do you plan to redefine our wealth?

It's a race toward the bottom Toro, not toward the top. Every previous model since the industrial revolution began had the advantage of exploiting massive virgin resources. That won't happen again.

It's a race to the top.

If it were a race to the bottom, incomes would continuously be falling. But globally, incomes have been rising pretty consistently, current recession notwithstanding.

Thomas Malthus said that we didn't have enough resources, and he said that 200 years ago, just before mankind was about to embark on the greatest period of wealth creation the planet has ever seen.

You are speaking of something other than globalization and the equilibrium the OP is discussing.

The OP was tackling the trend toward global wage parity.

The CIA world factbook lists global GDP/capita at $10,400, down 2% since last year.
https://www.cia.gov/library/publications/the-world-factbook/geos/xx.html


It lists US GDP/capita at $46,000 https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html

So for wealthy nations the race toward world wage parity is indeed a race toward the bottom.

 

[Toro]

well that is impossible because there simply are not enough resources for even half the present population to share our living standards.

So exactly how do you plan to redefine our wealth?

It's a race toward the bottom Toro, not toward the top. Every previous model since the industrial revolution began had the advantage of exploiting massive virgin resources. That won't happen again.

It's a race to the top.

If it were a race to the bottom, incomes would continuously be falling. But globally, incomes have been rising pretty consistently, current recession notwithstanding.

Thomas Malthus said that we didn't have enough resources, and he said that 200 years ago, just before mankind was about to embark on the greatest period of wealth creation the planet has ever seen.

You are speaking of something other than globalization and the equilibrium the OP is discussing.

The OP was tackling the trend toward global wage parity.

The CIA world factbook lists global GDP/capita at $10,400, down 2% since last year.
https://www.cia.gov/library/publications/the-world-factbook/geos/xx.html


It lists US GDP/capita at $46,000 https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html

So for wealthy nations the race toward world wage parity is indeed a race toward the bottom.

It is only a race towards wage parity if there is a race towards productivity parity. We are still a long ways away from that.

Overall Productivity ppp by country. Definition, graph and map.

 

[loosecannon]

It is only a race towards wage parity if there is a race towards productivity parity. We are still a long ways away from that.

Overall Productivity ppp by country. Definition, graph and map.

That is nice and all except for two facts:

>according to the CIA world fact book last year was the first year since the GD that global GDP/capita actually declined

>resource scarcity prohibits global productivity from continuing to expand as it has in the past. Whatever productivity advantages occur in the future will necessarily apply to a proportionally smaller % of the world's workforce. Making that whole effect net neutral or perhaps net negative in regards to GDP/capita.

IOW a global race toward the bottom may in fact already be occuring.

And since the fortunes of the developed and developing nations have reversed course we are quite clearly as a nation involved in a race toward the bottom.

Denial is useless.

 

[Toro]

It is only a race towards wage parity if there is a race towards productivity parity. We are still a long ways away from that.

Overall Productivity ppp by country. Definition, graph and map.

That is nice and all except for two facts:

>according to the CIA world fact book last year was the first year since the GD that global GDP/capita actually declined

>resource scarcity prohibits global productivity from continuing to expand as it has in the past. Whatever productivity advantages occur in the future will necessarily apply to a proportionally smaller % of the world's workforce. Making that whole effect net neutral or perhaps net negative in regards to GDP/capita.

IOW a global race toward the bottom may in fact already be occuring.

And since the fortunes of the developed and developing nations have reversed course we are quite clearly as a nation involved in a race toward the bottom.

Denial is useless.

On any given year, economic statistics can go up and down. Instead, look at the long-term trend.

Resource scarcity drives technological change, and economic growth is a function of technological change. High resource prices creates incentives to find new inputs and lower costs. This is how it has been in the past and there is no reason to think it will be different in the future.

Only if you think we've hit the limits of human ingenuity would one conclude that economic growth is going to stall indefinitely.

 

[loosecannon]

It is only a race towards wage parity if there is a race towards productivity parity. We are still a long ways away from that.

Overall Productivity ppp by country. Definition, graph and map.

That is nice and all except for two facts:

>according to the CIA world fact book last year was the first year since the GD that global GDP/capita actually declined

>resource scarcity prohibits global productivity from continuing to expand as it has in the past. Whatever productivity advantages occur in the future will necessarily apply to a proportionally smaller % of the world's workforce. Making that whole effect net neutral or perhaps net negative in regards to GDP/capita.

IOW a global race toward the bottom may in fact already be occuring.

And since the fortunes of the developed and developing nations have reversed course we are quite clearly as a nation involved in a race toward the bottom.

Denial is useless.

On any given year, economic statistics can go up and down. Instead, look at the long-term trend.

Resource scarcity drives technological change, and economic growth is a function of technological change. High resource prices creates incentives to find new inputs and lower costs. This is how it has been in the past and there is no reason to think it will be different in the future.

Only if you think we've hit the limits of human ingenuity would one conclude that economic growth is going to stall indefinitely.

Actually the consumption of resources, esp energy resources, has had as much or more to do with human technological advancement as has our ingenuity.

The evidence is that our use of resources has only increased as our technology advanced.....until last year when the long term trend reversed.

Reread the history of the industrial and technological revolutions. It was all about resource exploitation.

We might continue to find new resources to exploit as quickly as we expand our rate of consumption, but basic math prohibits this from lasting forever. And barring an advent I think we have already turned a corner.

But even that notwithstanding globalization mechanization and the race toward global wage parity still demand that for us, in the US, the race is toward the bottom. The days of upward mobility amongst the developed nations are almost certainly over. Unless of course some new advent changes everything.


.................

 

[Ragnar]

It is only a race towards wage parity if there is a race towards productivity parity. We are still a long ways away from that.

Overall Productivity ppp by country. Definition, graph and map.

That is nice and all except for two facts:

>according to the CIA world fact book last year was the first year since the GD that global GDP/capita actually declined

>resource scarcity prohibits global productivity from continuing to expand as it has in the past. Whatever productivity advantages occur in the future will necessarily apply to a proportionally smaller % of the world's workforce. Making that whole effect net neutral or perhaps net negative in regards to GDP/capita.

IOW a global race toward the bottom may in fact already be occuring.

And since the fortunes of the developed and developing nations have reversed course we are quite clearly as a nation involved in a race toward the bottom.

Denial is useless.

On any given year, economic statistics can go up and down. Instead, look at the long-term trend.

Resource scarcity drives technological change, and economic growth is a function of technological change. High resource prices creates incentives to find new inputs and lower costs. This is how it has been in the past and there is no reason to think it will be different in the future.

Only if you think we've hit the limits of human ingenuity would one conclude that economic growth is going to stall indefinitely.

Well said, which is why (again) "the greatest resource on the planet is the human mind". Put another way, there are no limits so long as people retain their political and economic freedom to innovate, create and own the products that they produce. Free markets and free minds bring productivity and profit. The Statist and collectivist mindset creates shortages or a static model of limited resources that they then seek to control and distribute for want of political power with an altruistic excuse.

Don't divide the pie in the name of equality, grow the pie by maximising individual freedom and private property.

 

[boedicca]

It is only a race towards wage parity if there is a race towards productivity parity. We are still a long ways away from that.

Overall Productivity ppp by country. Definition, graph and map.

That is nice and all except for two facts:

>according to the CIA world fact book last year was the first year since the GD that global GDP/capita actually declined

>resource scarcity prohibits global productivity from continuing to expand as it has in the past. Whatever productivity advantages occur in the future will necessarily apply to a proportionally smaller % of the world's workforce. Making that whole effect net neutral or perhaps net negative in regards to GDP/capita.

IOW a global race toward the bottom may in fact already be occuring.

And since the fortunes of the developed and developing nations have reversed course we are quite clearly as a nation involved in a race toward the bottom.

Denial is useless.

On any given year, economic statistics can go up and down. Instead, look at the long-term trend.

Resource scarcity drives technological change, and economic growth is a function of technological change. High resource prices creates incentives to find new inputs and lower costs. This is how it has been in the past and there is no reason to think it will be different in the future.

Only if you think we've hit the limits of human ingenuity would one conclude that economic growth is going to stall indefinitely.

Well, in LC's case, his limit of ingenuity was reached at about the age of three.

 

[Toro]

Actually the consumption of resources, esp energy resources, has had as much or more to do with human technological advancement as has our ingenuity.

The evidence is that our use of resources has only increased as our technology advanced.....until last year when the long term trend reversed.

Reread the history of the industrial and technological revolutions. It was all about resource exploitation.

We might continue to find new resources to exploit as quickly as we expand our rate of consumption, but basic math prohibits this from lasting forever. And barring an advent I think we have already turned a corner.

But even that notwithstanding globalization mechanization and the race toward global wage parity still demand that for us, in the US, the race is toward the bottom. The days of upward mobility amongst the developed nations are almost certainly over. Unless of course some new advent changes everything.


.................

Energy per unit of GDP has actually been declining pretty consistently for the past several decades as economic growth becomes less dependent on energy consumption as we have become more efficient regarding energy consumption, at least in the developed world. In the developing world, energy intensity has actually risen as they have industrialized. But overall, energy intensity has been declining.

I do agree that there are intermediate constraints, particularly in oil. But technology has a funny way of asserting itself. Five, six years ago, we were talking about natural gas being permanently above $7-$8 if not higher due to physical constraints. Now, we are swimming in gas as fracking in shale deposits has become technologically feasible. There is plenty of oil in the world. By some estimates, there are 4 trillion barrels of oil in the world. The problem is that most of it cannot be exploited cheaply given current technology constraints. I would not be surprised if we went back and re-tested the highs in oil, maybe even hitting $200 a barrel. But an old saying in commodities markets is "Nothing cures high prices like high prices."

 

[loosecannon]

Actually the consumption of resources, esp energy resources, has had as much or more to do with human technological advancement as has our ingenuity.

The evidence is that our use of resources has only increased as our technology advanced.....until last year when the long term trend reversed.

Reread the history of the industrial and technological revolutions. It was all about resource exploitation.

We might continue to find new resources to exploit as quickly as we expand our rate of consumption, but basic math prohibits this from lasting forever. And barring an advent I think we have already turned a corner.

But even that notwithstanding globalization mechanization and the race toward global wage parity still demand that for us, in the US, the race is toward the bottom. The days of upward mobility amongst the developed nations are almost certainly over. Unless of course some new advent changes everything.


.................

Energy per unit of GDP has actually been declining pretty consistently for the past several decades as economic growth becomes less dependent on energy consumption as we have become more efficient regarding energy consumption, at least in the developed world. In the developing world, energy intensity has actually risen as they have industrialized. But overall, energy intensity has been declining.

I do agree that there are intermediate constraints, particularly in oil. But technology has a funny way of asserting itself. Five, six years ago, we were talking about natural gas being permanently above $7-$8 if not higher due to physical constraints. Now, we are swimming in gas as fracking in shale deposits has become technologically feasible. There is plenty of oil in the world. By some estimates, there are 4 trillion barrels of oil in the world. The problem is that most of it cannot be exploited cheaply given current technology constraints. I would not be surprised if we went back and re-tested the highs in oil, maybe even hitting $200 a barrel. But an old saying in commodities markets is "Nothing cures high prices like high prices."

yeah, we might maintain our streak. And we might not. Banking on a never ending stream of increasingly vast resources to extract is a losing proposition long term. You might win for 200 or 400 years, but the odds are against it and ultimately you always lose.

That's a fact, Jack.

 

[loosecannon]

Well, in LC's case, his limit of ingenuity was reached at about the age of three.

I was a certifiable genius at age 3.

 

[william the wie]

Everyone that has made a twenty year bet on Malthus being right has lost. On the other hand there is increasing evidence that we have hit the downslope for the technological product life cycle as a whole. Ever cheaper computer chips are forcing prices down and productivity up, along with Toro's point of the internet being an engine of deflation computing is creatively destroying GDP worldwide. But are people eating less or dying earlier? Generally not. Black swan advances in medicine are bankrupting European style welfare states with the PIIGS being the canary in the mine.

Overleverage in expectation of product driven inflation and rapidly increasing productivity is causing a lot of economic distress. With helicopter Ben and other politicians trying to prevent adaptation this distress is being amplified. To take but one example with bio-tech and nanotechnology taking off no one is looking at the possibility of vaccines or preventatives for everything. The amount of GDP generated by the current beads and rattles crowd is staggering and that is likely to vanish in the coming decades and medicare/medicaid payouts will drop by 90-99%. Our entire thinking about economics is likely to change drastically.

So yeah, it looks like the economic world is going to hell in a handbasket but world life expectancy keeps going up which means the wrong things are being measured.

 

[asterism]

Everyone that has made a twenty year bet on Malthus being right has lost. On the other hand there is increasing evidence that we have hit the downslope for the technological product life cycle as a whole. Ever cheaper computer chips are forcing prices down and productivity up, along with Toro's point of the internet being an engine of deflation computing is creatively destroying GDP worldwide. But are people eating less or dying earlier? Generally not. Black swan advances in medicine are bankrupting European style welfare states with the PIIGS being the canary in the mine.

Overleverage in expectation of product driven inflation and rapidly increasing productivity is causing a lot of economic distress. With helicopter Ben and other politicians trying to prevent adaptation this distress is being amplified. To take but one example with bio-tech and nanotechnology taking off no one is looking at the possibility of vaccines or preventatives for everything. The amount of GDP generated by the current beads and rattles crowd is staggering and that is likely to vanish in the coming decades and medicare/medicaid payouts will drop by 90-99%. Our entire thinking about economics is likely to change drastically.

So yeah, it looks like the economic world is going to hell in a handbasket but world life expectancy keeps going up which means the wrong things are being measured.

Truly a valid measure, basic needs. The only reason poverty has increased is because the statistic used is arbitrary. Notice how reports and studies don't concentrate on domestic starvation anymore, it's "food security" and it counts everyone who has ever been concerned about proper nutrition x times per week or year. That's not the same as starving, not by a long shot. An obesity problem exists among the poor and we're told it's because it's expensive to eat healthy. A meal at McDonald's (about $25 for my family) is a lot more expensive than 2 pounds of ground beef ($3), a bag of potatoes ($3), a can of corn ($1) and a gallon of milk ($4).

On a global scale the same is true and technology is making that happen. The average PPP might be around $10,000 but it's overall less expensive to survive. That's an amazing statistic isn't it? That the U.S. PPP is nearly four times the world average, but so many people at that level are presented as needing assistance.

 

[editec]

Didthe world ever have "economic equalibrium"?

I'm not even I know what that is.

As to the long range view of what the world economy will look like?

Well, it's a cinche that we do not currently have the resources to give six billion people the quality of life of the industrialized nations.

And while I have no doubt that efficiencies and techological breakthroughs will somewhat offset the effects of a rising demand for goods, I do not believe that those can offset the environmental stress that would come from giving every person on earth that qality of life.

Something's gotta give.

Right now, be most obvious thing that's "giving" is the quality of life of the working classes in the first world.

Those seem to be declining, in large part because industry has moved to the third world.

So the loss of jobs in the First World means better times for people in formerly non-industrialized world.

But it's not a one-for-one tradeoff, is it?

Take Mexico, for example.

First world industries moved there which was a good outcome for SOME Mexican workers.

But along with that trade policy was the fact that now Mexicans can more easily buy agricultural products grown by agri-corporporations in America.

So working Mexicans can eat more cheaply, but small Mexican farmers got SCREWED.

I doubt these sorts of mixed blessings are going to go any anytime soon.

The transition from a first world, second world, third world, economic paradigm, to a ONE WORLD ECONOMY is going to give us winners -- the third world workers who are put to work; and secondly, those with capitalist who will enjoy increased profit margins by hiring them, and to some extent all who buy their marginally cheper goods.

The losers will be the formerly well paid first world working classes who lose their jobs due to the FREE TRADE policies of the first world and those poetneial third workd capitalists who are going to lose their place to international finance and better funded foreign industrialists.

Very few economic changes do not create winners and losers, folks.

 

[loosecannon]

Didthe world ever have "economic equalibrium"?

I'm not even I know what that is.

As to the long range view of what the world economy will look like?

Well, it's a cinche that we do not currently have the resources to give six billion people the quality of life of the industrialized nations.

And while I have no doubt that efficiencies and techological breakthroughs will somewhat offset the effects of a rising demand for goods, I do not believe that those can offset the environmental stress that would come from giving every person on earth that qality of life.

Something's gotta give.

Right now, be most obvious thing that's "giving" is the quality of life of the working classes in the first world.

Those seem to be declining, in large part because industry has moved to the third world.

So the loss of jobs in the First World means better times for people in formerly non-industrialized world.

But it's not a one-for-one tradeoff, is it?

Take Mexico, for example.

First world industries moved there which was a good outcome for SOME Mexican workers.

But along with that trade policy was the fact that now Mexicans can more easily buy agricultural products grown by agri-corporporations in America.

So working Mexicans can eat more cheaply, but small Mexican farmers got SCREWED.

I doubt these sorts of mixed blessings are going to go any anytime soon.

The transition from a first world, second world, third world, economic paradigm, to a ONE WORLD ECONOMY is going to give us winners -- the third world workers who are put to work; and secondly, those with capitalist who will enjoy increased profit margins by hiring them, and to some extent all who buy their marginally cheper goods.

The losers will be the formerly well paid first world working classes who lose their jobs due to the FREE TRADE policies of the first world and those poetneial third workd capitalists who are going to lose their place to international finance and better funded foreign industrialists.

Very few economic changes do not create winners and losers, folks.

that's pretty much how I see it too, and it seems really obvious.

 

[asterism]

Didthe world ever have "economic equalibrium"?

I'm not even I know what that is.

As to the long range view of what the world economy will look like?

Well, it's a cinche that we do not currently have the resources to give six billion people the quality of life of the industrialized nations.

And while I have no doubt that efficiencies and techological breakthroughs will somewhat offset the effects of a rising demand for goods, I do not believe that those can offset the environmental stress that would come from giving every person on earth that qality of life.

Something's gotta give.

Right now, be most obvious thing that's "giving" is the quality of life of the working classes in the first world.

Those seem to be declining, in large part because industry has moved to the third world.

So the loss of jobs in the First World means better times for people in formerly non-industrialized world.

But it's not a one-for-one tradeoff, is it?

Take Mexico, for example.

First world industries moved there which was a good outcome for SOME Mexican workers.

But along with that trade policy was the fact that now Mexicans can more easily buy agricultural products grown by agri-corporporations in America.

So working Mexicans can eat more cheaply, but small Mexican farmers got SCREWED.

I doubt these sorts of mixed blessings are going to go any anytime soon.

The transition from a first world, second world, third world, economic paradigm, to a ONE WORLD ECONOMY is going to give us winners -- the third world workers who are put to work; and secondly, those with capitalist who will enjoy increased profit margins by hiring them, and to some extent all who buy their marginally cheper goods.

The losers will be the formerly well paid first world working classes who lose their jobs due to the FREE TRADE policies of the first world and those poetneial third workd capitalists who are going to lose their place to international finance and better funded foreign industrialists.

Very few economic changes do not create winners and losers, folks.

Assuming you are correct, how will protectionist policies do anything but slow it down while holding the third world in their state of poverty? Is some temporary comfort of the first world working class worth that? They are relatively affluent compared to even third world middle class. Is propping them up worth keeping so many others in poverty?