” in the past, no country was rich. There’s lots of uncertainty involved in historical GDP data — plenty we don’t actually know about populations, prices, and what people consumed in those eras. But even allowing for quite a bit of uncertainty, it’s definitely true that the average citizen of a developed country, or a middle-income country, is far more materially wealthy than their ancestors were 200 years ago”
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“whatever today’s rich countries did to get rich, they weren’t doing it in 1820. Imperialism is very old — the Romans, the Persians, the Mongols, and many other empires all pillaged and plundered plenty of wealth. But despite all of that plunder, no country in the world was getting particularly rich, by modern standards, until the latter half of the 20th century.
Think about all the imperial plunder that was happening in 1820. The U.S. had 1.7 million slaves and was in the process of taking land from Native Americans. Latin American countries had slavery, as well as other slavery-like labor systems for their indigenous peoples. European empires were already exploiting overseas colonies. But despite all this plunder and extraction of resources and labor, Americans and Europeans were extremely poor by modern standards.
With no antibiotics, vaccines, or water treatment, even rich people suffered constantly from all sorts of horrible diseases. They didn’t have cars or trains or airplanes to take them around. Their food was meager and far less varied than ours today. Their living space was much smaller, with little privacy or personal space. Their clothes were shabby and fell apart quickly. They had no TVs or computers or refrigerators or washing machines or dishwashers or toasters or microwaves. At night their houses were dark, and without air conditioning they had trouble escaping the summer heat. They had to carry water from place to place, and even rich people pooped in outhouses or chamberpots. Everyone had bedbugs. Most water supplies were carried from place to place by hand.
They were plundering as hard as they could, but it wasn’t making them rich.
Nor were colonized and exploited nations and peoples rich before the European empires arrived. Yes, Africa, Latin America, and parts of Asia were harshly exploited by European empires for their natural resources. But although Africa, Latin America, and Asia were closer to Europe in terms of living standards back then, they were all very, very poor by modern standards.
This should be the first very strong clue that modern rich nations’ wealth didn’t come primarily from plunder, but from something else — something that nations started doing over the last century and a half. In fact, we know what that something is — it’s industrial production, coupled with modern science.”
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“there are two more sophisticated cases you can make for the “imperial plunder” theory of national wealth. The first is that continuing plunder is responsible for income differences between countries. The second is that plunder was necessary to initiate the process that eventually led to industrial production and modern science. The first of these arguments is wrong; the second can’t easily be disproven, but there’s major reason for doubt.”
https://www.noahpinion.blog/p/nations-dont-get-rich-by-plundering
“The US economy shrank in the first half of the year, but in the third quarter, it started growing again — which some economists say is an optimistic sign that the country isn’t in a recession now. But underlying factors show the economy is clearly slowing down, they say.
The country’s GDP grew at a 2.6 percent annual rate in the third quarter, according to Commerce Department data released on Thursday. The growth was mainly driven by trade: American companies exported more goods and services, and imports dropped. Meanwhile, key components of the report — consumer spending and residential investment — reflected weaker economic conditions.
Although the two consecutive quarters of negative GDP earlier in the year met a common but unofficial definition of a recession, many economists said at the time that the labor market was still strong and the country wasn’t yet in an economic downturn. Economists and forecasters have warned about a potential recession in the next year, however, as the Federal Reserve continues to raise interest rates to bring inflation under control.”
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“The labor market is still strong now. Employers have been adding hundreds of thousands of jobs to the economy each month and the unemployment rate stands at 3.5 percent, a half-century low. But economists say the data in the GDP report reflects an economy that is already cooling, and more pain is likely ahead.”
“GDP measures the monetary value of goods and services produced in a country. It contemplates things like consumption, government spending, business investments, and net exports. But there’s also a lot it leaves out, such as unpaid work, sales of used goods, and, perhaps most important, general well-being. Generally, countries with stronger and growing economies have higher standards of living. But GDP is only a decent-ish indicator of how things are going for people.”
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“There’s a British economist, Kate Raworth, who once said in a book called Doughnut Economics that there’s one graph in economics that no economist ever wants you to talk to them about. And that is the graph of exponential GDP growth. A mainstream economist would probably consider a growth rate of about 3 percent GDP every year as a healthy, robust economy. At 3 percent, the economy would have to double in output roughly every 25, 26, 27 years or so. If I showed a 5-year-old this kind of graph, they would know that that’s patently insane. This is, however, precisely the reigning economic doctrine in every country in the world with the possible exception of Cuba and Bhutan.
It is destructive because it will plunder the world, it will destroy our ecosystem, because it works people to death, because it destroys economies, because it commodifies everything.
Let me give you an analogy. Say we’re passengers on a train racing toward a cliff, and the only metric that matters in that train is its increase in speed. Whether that train has an unfair distribution of income matters not at all, what we’re destroying on the journey does not matter, whether the train is comfortable does not matter. And, in fact, not even the destination of the train matters.”
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“The vast majority of people would agree we should care about the greatest well-being of the greatest number within the biophysical limits of the planet, for the most part. The problem is that we are currently operating in a system called capitalism, which requires growth. We are at this tragic moment in history in which we can say both that if we continue to grow, we will kill ourselves, and if we stop growing, we will suffer greatly within capitalism.
Capitalism requires growth. The economy doesn’t require growth, development doesn’t require growth, and welfare doesn’t require wealth. Since we are living in a global capitalist economy, when capitalism doesn’t grow, you and I know exactly what to call that: a depression, a recession, a crisis.
But the opposite is also true. If we continue to grow exponentially, that is a massive crisis. It is the reason why we are unable to address climate change successfully, why we don’t know how to address rampant inequality.”
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“If you are starving, and you’re on 200 calories a day, and I as a doctor set you on 400 calories, and then on 800, and then on 1,600, you will get well. But if I say I have the key to your health and well-being, I will continue to double your calorie intake, what will you look like pretty soon? You will get very sick, and you will die. Absolutely no question. The exact same thing is true for the economy at large.
Was it good and necessary at some point? Probably yes. Although there are lots of caveats there, too. Is that still necessary? Absolutely not. Certainly not in developed countries like the US or Germany or France or Denmark.”
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“I have done interviews with corporate CEOs who very frankly admit that the business model they’re currently operating under is not sustainable, that it will hurt the world and the planet in ways that are irreversible. But they don’t know how to change it. They say, “If I stop giving return on investment to my stockholders, they will fire me, that’s the end of that.””
“The Congressional Budget Office (CBO), the legislature’s nonpartisan number-crunching agency, says the bipartisan infrastructure bill would add about $256 billion to the deficit over 10 years. The real figure is likely to be higher, because the package contains a few gimmicky elements that are designed to trick the CBO’s forecasting metrics.
The biggest of those gimmicks is the promise that Congress will reallocate more than $200 billion of COVID relief funds to cover infrastructure costs. It remains unclear exactly what unused COVID funds will be redirected, and the bill only rescinds $50 billion in actual budget authority from previously passed COVID relief bills, according to an analysis by the Committee for a Responsible Federal Budget (CRFB).
Other proposals to save and redirect federal dollars to pay for the infrastructure bill are also unlikely to materialize. Take the $49 billion lawmakers plan to “save” by further delaying an already-delayed Trump administration regulation altering how prescription drug discounts are applied by health insurers. “Because the Congressional Budget Office projected that the so-called rebate rule would increase federal spending in Medicare and Medicaid by about $177 billion over a decade, due to a rise in Medicare premiums (and therefore, taxpayer-funded subsidies for Medicare premiums), lawmakers get to count a further delay in the rule (beyond the Biden administration’s one-year delay) as ‘savings’ for the federal government,” explains the National Taxpayers Union.”
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“When you filter out the gimmicks designed to game the CBO score of the infrastructure bill, the CRFB says the package will probably add $340 billion to the deficit over 10 years.”
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“But as the CBO’s report makes clear, actually paying for the infrastructure makes those benefits bigger than they otherwise would be. A fully offset infrastructure package would boost GDP by an estimated 0.11 percent over the next 30 years while a deficit-financed package would barely break even. That’s because, as the CRFB notes, running higher deficits to pay for infrastructure spending will reduce private investment over the long term and, thus, lower future economic growth as well.”