2016-08-27 exponential GDP growth, information, core

Thesis: perpetual growth of GDP (in any form it is measured now) has no grounds for being possible in the new economy. Principally for an unpublished and inherent reason of information moving to be free and unlimited/infinite. This moves an increasing part of the economy to outside current orthodox measures. And this movement leaves high and dry and exposed the standard and declared reason that resources are finite – which self-evidently means economic activity cannot grow indefinitely.

 

The purpose of measuring economic activity is confidence (and to a lesser degree management and directing).

Confidence is the base of monetary activity, specifically the decoupled types – in reverse order in history and in reverse order of being decoupled: financialisation, credit, fractional reserve, fiat.

It is measured for consumers of the metrics to build trust for the basis of confidence in the future. The current instance and phenotype is creditworthiness (progress etc). The previous incarnation before credit and after GDP inception 1930s was visibility of the cogs within the economic machine. Pre-GDP relied on more on experience, which amounts to sentiment derived from aggregating selected P&Ls in the market.

 

The GDP replacement has 3 components: finite material, infinite material, social.

Finite measure is of finite resource, focussed on extractive materials and externalised costs. GPI includes the costs and negatives that give GDP a truer  (holistic and planetary) measure for guiding the beneficiary of economic activity.

The infinite is the rest of the monetised activity. Currently this is principally information. Others are cradle to cradle materials on green power. (The destination of this transition (away from resources) can only and mainly be information).

The social component is not yet quantified, but will be around the reciprocal and ‘core’ economy.

 

The finite and negative component of economic growth must transition away from planetary resources (and include externalised costs).

Reasons given for GDP to continue to grow (still exponentially) are from feeding the old 2IR to obtain reserve & lubrication for the investment in the new infinite resource, and operation of the required transition. The higher the % economic growth then:

(because it is the current measure of confidence, then the future core measures must be defined, visible and tangible to jump ship to the new.)

1) the more agile the economic ship is to change ground faster to green & IT

2) the faster it will transition into the infinite resource of information.

This reasoning is Ok in the sense of the validity of permitting growth being proportional to the certainty of direction, and of the effectiveness of the levers that steer the change ;

Problem: Future economic activity that is based on information (i.e. its activity and presence) will be decoupled from people (society), who are the original raison d’etre of that platform of confidence. The decoupling is (described by Paul Mason’s diagnosis of) information moving to being free, and work being automated away from labour. At best, this continued GDP is valid only in the short term, and it itself is a finite lever and opportunity, so it is urgent to spend it to maximum steerage of the economic ship.

Therefore the material content of (the current) GDP is destined to become a negative % towards zero.

 

This destination economy will have the old-economy finite resource measured for the specific purpose of managing decline of resource consumption and externalised costs.

This destination economy will have the new metrics of social activity, specifically for reciprocity and other purposes that build social engagement.