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Economics and the End of Growth - Mar 29

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Money talks: the impact of economic framing on how we act and feel

Bec Sanderson, Common Cause
We’re ‘consumers’ or ‘taxpayers’ and we care about things like ‘pay-off’, ‘return on investment’ and ‘growth’: that’s the bottom line. Right?

Well, I’d put my money on it.

But, actually, when did that happen? When did we start to pepper our meetings, our work, and even dinner conversations with such words and phrases? Sometimes, our use of economic framing has an obvious trigger; take ‘credit crunch’. In one of the recent economic crises, journalists repeatedly used it (with a straight face), and then before you knew it, the 2008 edition of the Oxford English Dictionary carried a new definition of the word ‘crunch’, as meaning “a severe shortage of money or credit”. It was always pretty difficult to pass that particular term casually into everyday conversation, but now we officially associate crunch with economic recession, as well as biscuits.

Economic frames easily creep into everyday language via news media, or advertising, or political rhetoric, but we have little awareness of the effect that might have on the way that we think and behave. Psychological research is finally shedding light on this...
(19 February 2013)


We’re Hooked on ‘Growth,’ But It Doesn’t Have to Be This Way

Imara Jones, Colorlines
As the New York Stock Exchange reached an all-time high this week, you’d think that the good times were back. But that would be incorrect. What happens on Wall Street has very little to do with what’s going on in the real economy. Corporate profits have never been higher, but—excluding the highest earners—real wages are at a 40 year low. With this fundamental disconnect—and political gridlock in Washington—it’s unlikely that our economy will return to health anytime soon.

The good news is that in thousands of communities across America, people are working together to bring about what may be the beginning of a new national economic contract. Where Washington and Wall Street are falling down citizens are banding together, not just to ameliorate the suffering caused by national stagnation, but to launch innovative economic initiatives that might create a brighter, fairer future for everyone.

These localized efforts, which fall broadly under the banner of “post-growth economics,” are beginning to stitch themselves together into a national force that holds the promise of stronger neighborhoods and greater individual well being...
(8 March 2013)


Is GDP the right way to measure progress? One economist says no

Drew Nelles , Globe and Mail
While the euro-zone crisis reheated and both Canada and Britain attacked debt in their budgets this week, the global economy remains sluggish, income inequality is soaring and the climate crisis continues unabated.

There’s a solution to all three of these problems, economist Dan O’Neill believes: the creation of a “steady-state economy,” in which material and energy use are kept within ecological limits, the population remains stable, wealth is distributed more fairly...

What specific proposals do steady-state economists advocate?

One example is changing the way we measure progress. At the moment, our main economic indicator is GDP – gross domestic product. This is simply a measure of money changing hands in the economy. If I go out and buy a beer a pub in Edinburgh, this contributes to GDP. If I buy a bicycle, it also contributes to GDP. If the government invests in education, this contributes to GDP...
(22 March 2013)


The Slippery Grip of Growth

Golem XIV, Golem XIV Author of the Debt Generaion
1) Whither Growth

Never has a society spoken so much about growth, yet achieved so little.

Time and time again predictions of recovery and a return to normal levels of economic growth have proven premature. The phrase “triple dip recession” has now entered the lexicon in the UK as GDP figures look like turning south again. One wonders how long it will be before quadruple, quintuple and sextuple dips take their place as common phrases to describe the UK’s mire.

With each announcement of GDP slippage, the news is delivered as somewhat of a surprise to politicians, economists and the commentariat in general. We’ve never had a high regard for journalists and politicians but economists on the other hand are deemed to be infinitely more sober and trustworthy. After all, they are the subject matter experts, armed to their teeth with teams of highly qualified forecasters and the very latest in advanced statistical models. Far too advanced for us mere mortals to understand, you hear! Yet it is the economists who are the people who keep getting it wrong. Not all economists are cut from the same cloth, but the strand of economic dogma that graces our most prestigious institutions and has the ear of policy makers and the media is varyingly referred to here as the “mainstream” (other terms are available, including Neoclassical, traditional, orthodox, central tradition, and in its most ardent form: Chicago School).

It goes without saying that statistical projections of the future have margins of error. Therefore, the failure of standard macro economic forecasts to predict our repeated slumps is often attributed to these statistical errors (maybe with a few post-hoc rationalisations thrown in for good measure, such as that pesky weather we keep having). But the very premise of statistical error is that on balance, errors are neutral. Therefore our real performance should turn out to occur higher than predictions as often as it turns out lower. Yet that’s not the way things have turned out, with many forecasts turning out to be over optimistic [1].

Chicago (school), we have a problem!

A recent chart from the IMF shows how there has been a general slowing of developed country (G7) growth since the 1990s. There is still some residual growth, but the trend in growth rate is clearly downwards. At the current trajectory the G7 economies risk being in constant decline from about 2015:..
(19 March 2013)


Should socialists support degrowth?

Don Fitz, Climate & Capitalism
The question is not should we advocate reducing production within capitalist society but rather: How do we best relate to those struggles that are already occurring? Activists across the globe are challenging economic expansion which threatens the survival of humanity. It has never been more urgent to provide a vision of a new society that can pull these efforts together.

Climate change is justifiably the focus of concern in the early 21st century. The Earth is approaching the level of 450 parts per million (ppm) of atmospheric carbon, a level which must be averted if humans are to avoid a cataclysmic turning point when climate change will loop into itself and increase even without additional industrial activity...

1. Does lowering production mean a worse quality of life?

Most economic writers, even socialist ones, still seem to believe that there is a strong connection between production and consumption. Enormous changes during the twentieth century profoundly weakened the bond between them...
(25 March 2013)

La décroissance illustrée par Colcanopa - Desazkundea/flickr

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