Subject: Lower standard of living. Why? From: rich@cnct.com (Richard Marin) Newsgroups: alt.politics.economics Subject: Lower standard of living. Why? Date: 2 Nov 1995 02:09:45 -0500 Organization: The Connection http://www.cnct.com Message-ID: <479qrp$3q6@cnct.com> When my father first came to this country, he was an unskilled blue collar worker. He earned $110. His rent on a one bedroom apartment in a big city was $55 dollars a month. That's 1/2 of one weeks salary. A brand new 8 cylinder car cost 2,000 dollars. That means you needed to work 4.5 months in order to buy a new car. Today a blue collar worker can take home $200 dollars a week (that's assuming 5 to 6 per hour and a 40 hour work week). The rent on a one bedroom apartment in the same town is $700. That means a blue collar worker must work for three weeks in order to pay the rent, compared to only 1/2 a week in the past. Today, a blue collar worker needs to work for 90 months in order to buy a new 8 cylinder car. This is a crude example but it is telling. People today work to pay bills. Why. What has happened to our money. Why have we lost so much buying power. ---------------------------------29120547024165-- To: "jim blair" From: Jay Hanson Subject: WHAT IS THE GENUINE PROGRESS INDICATOR -- GPI? WHAT IS THE GENUINE PROGRESS INDICATOR -- GPI? The Genuine Progress Indicator (GPI) is a new measure of the economic well-being of the nation from 1950 to present. It broadens the conventional accounting framework to include the economic contributions of the family and community realms, and of the natural habitat, along with conventionally measured economic production. The GPI takes into account more than twenty aspects of our economic lives that the GDP ignores. It includes estimates of the economic contribution of numerous social and environmental factors which the GDP dismisses with an implicit and arbitrary value of zero. It also differentiates between economic transactions that add to well-being and those which diminish it. The GPI then integrates these factors into a composite measure so that the benefits of economic activity can be weighed against the costs. The GPI is intended to provide citizens and policy-makers with a more accurate barometer of the overall health of the economy, and of how our national condition is changing over time. While per capita GDP has more than doubled from 1950 to present, the GPI shows a very different picture. It increased during the 1950s and 1960s, but has declined by roughly 45% since 1970. Further, the rate of decline in per capita GPI has increased from an average of 1% in the 1970s to 2% in the 1980s to 6% so far in the 1990s. This wide and growing divergence between the GDP and GPI is a warning that the economy is stuck on a path that imposes large -- and as yet unreckoned -- costs onto the present and the future. Specifically, the GPI reveals that much of what economists now consider economic growth, as measured by GDP, is really one of three things: 1) fixing blunders and social decay from the past; 2) borrowing resources from the future; or 3) shifting functions from the community and household realm to that of the monetized economy. The GPI strongly suggests that the costs of the nation's current economic trajectory have begun to outweigh the benefits, leading to growth that is actually uneconomic. If the mood of the public is any barometer at all, then it would seem that the GPI comes much closer than the GDP to the economy that Americans actually experience in their daily lives. It begins to explain why people feel increasingly gloomy despite official claims of economic progress and growth. The GPI starts with the same personal consumption data the GDP is based on, but then makes some crucial distinctions. It adjusts for certain factors (such as income distribution), adds certain others (such as the value of household work and volunteer work), and subtracts yet others (such as the costs of crime and pollution). Because the GDP and the GPI are both measured in monetary terms, they can be compared on the same scale. 1. CRIME & FAMILY BREAKDOWN Social breakdown imposes large economic costs on individuals and society, in the form of legal fees, medical expenses, damage to property, and the like. The GDP treats such expenses as additions to well-being. By contrast, the GPI subtracts the costs arising from crime and divorce. II. HOUSEHOLD & VOLUNTEER WORK Much of the most important work in society is done in household and community settings: childcare, home repairs, volunteer work, and the like. These contributions are ignored in the GDP because no money changes hands. To correct this omission, the GPI includes, among other things, the value of household work figured at the approximate cost of hiring someone to do it. III. INCOME DISTRIBUTION A rising tide does not necessarily lift all boats -- not if the gap between the very rich and everyone else increases. Both economic theory and common sense tell us that the poor benefit more from a given increase in their income than do the rich. Accordingly, the GPI rises when the poor receive a larger percentage of national income, and falls when their share decreases. IV. RESOURCE DEPLETION If today's economic activity depletes the physical resource base available for tomorrow's, then it is not really creating wellbeing; rather, it is just borrowing it from future generations. The GDP counts such borrowing as current income. The GPI, by contrast, counts the depletion or degradation of wetlands, farmland, and non-renewable minerals (including, oil) as a current cost. V. POLLUTION The GDP often counts pollution as a double gain; once when it's created, and then again when it is cleaned up. By contrast, the GPI subtracts the costs of air and water pollution as measured by actual damage to human health and the environment. VI. LONG-TERM ENVIRONMENTAL DAMAGE Climate change and the management of nuclear wastes are two long-term costs arising from the use of fossil fuels and atomic energy. These costs do not show up in ordinary economic accounts. The same is true of the depletion of stratospheric ozone arising from the use of chlorofluorocarbons. For this reason, the GPI treats as costs the consumption of certain forms of energy and of ozone-depleting chemicals. VII. CHANGES IN LEISURE TIME As a nation increases in wealth, people should have increasing latitude to choose between more work and more free time for family or other activities. In recent years, however, the opposite has occurred. The GDP ignores this loss of free time, but the GPI treats leisure as most Americans do -- as,something of value. When leisure time increases, the GPI goes up; when Americans have less of it, the GPI goes down. VIII. DEFENSIVE EXPENDITURES The GDP counts as additions to well-being the money people spend just to prevent erosion in their quality of life or to compensate for misfortunes of various kinds. Examples are the medical and repair bills from automobile accidents, commuting costs, and household expenditures on pollution control devices such as water filters. The GPI counts such "defensive" expenditures as most Americans do: as costs rather than as benefits. IX. LIFESPAN OF CONSUMER DURABLES & PUBLIC INFRASTRUCTURE The GDP confuses the value provided by major consumer purchases (e.g., home appliances) with the amounts Americans spend to buy them. This hides the loss in well-being that results when products are made to wear out quickly. To overcome this, the GPI treats the money spent on capital items as a cost, and the value of the service they provide year after year as a benefit. This applies both to private capital items and to public infrastructure, such as highways. X. DEPENDENCE ON FOREIGN ASSETS If a nation allows its capital stock to decline, or if it finances its consumption out of borrowed capital, it is living beyond its means. The GPI counts net additions to the capital stock as contributions to well-being, and treats money borrowed from abroad as reductions. If the borrowed money is used for investment, the negative effects are canceled out. But if the borrowed money is used to finance consumption, the GPI declines. The above text is excerpted from The Genuine Progress Indicator: Summary of Data and Methodology, Redefining Progress C1995. Copies of the full reports are available for $10.00 by contacting: Redefining Progress, One Kearny Street, Fourth Floor San Francisco, CA 94108 415-781-1191 Fax: 415-781-1198. [ These are the same people who wrote the cover story "If the Economy Is Up, Why Is America Down?", in the October 1995 Atlantic Monthly. For back issues send $7 to: The Atlantic, Back Issues, 200 North 12th St., Newark, NJ. 07107 or http://www2.theAtlantic.com/atlantic/xchg/circ/back.htm ] To: "jim blair" From: Jay Hanson Subject: THE POPULATION EXPLOSION THE POPULATION EXPLOSION by Paul and Anne Ehrlich (1990) Published by Simon and Schuster Tel. 212-698-7000 OVERPOPULATION Having considered some of the ways that humanity is destroying its inheritance, we can look more closely at the concept of "overpopulation." All too often, overpopulation is thought of simply as crowding: too many people in a given area, too high a population density. For instance, the deputy editor in chief of Forbes magazine pointed out recently, in connection with a plea for more population growth in the United States: "If all the people from China and India lived in the continental U.S. (excluding Alaska), this country would still have a smaller population density than England, Holland, or Belgium." *31 The appropriate response is "So what?" Density is generally irrelevant to questions of overpopulation. For instance, if brute density were the criterion, one would have to conclude that Africa is "underpopulated," because it has only 55 people per square mile, while Europe (excluding the USSR) has 261 and Japan 857. *32 A more sophisticated measure would take into consideration the amount of Africa not covered by desert or "impenetrable" forest. *33 This more habitable portion is just a little over half the continent's area, giving an effective population density of 117 per square mile. That's still only about a fifth of that in the United Kingdom. Even by 2020, Africa's effective density is projected to grow to only about that of France today (266), and few people would consider France excessively crowded or overpopulated. When people think of crowded countries, they usually contemplate places like the Netherlands (1,031 per square mile), Taiwan (1,604), or Hong Kong (14,218). Even those don't necessarily signal overpopulation -- after all, the Dutch seem to be thriving, and doesn't Hong Kong have a booming economy and fancy hotels? In short, if density were the standard of overpopulation, few nations (and certainly not Earth itself) would be likely to be considered overpopulated in the near future. The error, we repeat, lies in trying to define overpopulation in terms of density; it has long been recognized that density per se means very little. *34 The key to understanding overpopulation is not population density but the numbers of people in an area relative to its resources and the capacity of the environment to sustain human activities; that is, to the area's carrying capacity. When is an area overpopulated? When its population can't be maintained without rapidly depleting nonrenewable resources (or converting renewable resources into nonrenewable ones) and without degrading the capacity of the environment to support the population. In short, if the long-term carrying capacity of an area is clearly being degraded by its current human occupants, that area is overpopulated. *35 By this standard, the entire planet and virtually every nation is already vastly overpopulated. Africa is overpopulated now because, among other indications, its soils and forests are rapidly being depleted -- and that implies that its carrying capacity for human beings will be lower in the future than it is now. The United States is overpopulated because it is depleting its soil and water resources and contributing mightily to the destruction of global environmental systems. Europe, Japan, the Soviet Union, and other rich nations are overpopulated because of their massive contributions to the carbon dioxide buildup in the atmosphere, among many other reasons. Almost all the rich nations are overpopulated because they are rapidly drawing down stocks of resources around the world. They don't live solely on the land in their own nations. Like the profligate son of our earlier analogy, they are spending their capital with no thought for the future. It is especially ironic that Forbes considered the Netherlands not to be overpopulated. This is such a common error that it has been known for two decades as the "Netherlands Fallacy." *36 The Netherlands can support 1,031 people per square mile only because the rest of the world does not. In 1984-86, the Netherlands imported almost 4 million tons of cereals, 130,000 tons of oils, and 480,000 tons of pulses (peas, beans, lentils). It took some of these relatively inexpensive imports and used them to boost their production of expensive exports -- 330,000 tons of milk and 1.2 million tons of meat. The-Netherlands also extracted about a half-million tons of fishes from the sea during this period, and imported more in the form of fish meal. *37 The Netherlands is also a major importer of minerals, bringing in virtually all the iron, antimony, bauxite, copper, tin, etc., that it requires. Most of its fresh water is "imported" from upstream nations via the Rhine River. The Dutch built their wealth using imported energy. Then, in the 1970s, the discovery of a large gas field in the northern part of the nation allowed the Netherlands temporarily to export as gas roughly the equivalent in energy of the petroleum it continued to import. But when the gas fields (which represent about twenty years' worth of Dutch energy consumption at current rates) are exhausted, Holland will once again depend heavily on the rest of the world for fossil fuels or uranium. *38 In short, the people of the Netherlands didn't build their prosperity on the bounty of the Netherlands, and are not living on it now. Before World War II, they drew raw materials from their colonies; today they still depend on the resources of much of the world. Saying that the Netherlands is thriving with a density of 1,031 people per square mile simply ignores that those 1,031 Dutch people far exceed the carrying capacity of that square mile. This "carrying-capacity" definition of overpopulation is the one used in this book. *39 It is important to understand that under this definition a condition of overpopulation might be corrected with no change in the number of people. For instance, the impact of today's 665 million Africans on their resources and environment theoretically might be reduced to the point where the continent would no longer be overpopulated. To see whether this would be possible, population growth would have to be stopped, appropriate assistance given to peasant farmers, and certain other important reforms instituted. Similarly, dramatic changes in American lifestyle might suffice to end overpopulation in the United States without a large population reduction. But, for now and the foreseeable future, Africa and the United States will remain overpopulated -- and will probably become even more so. To say they are not because, if people changed their ways, overpopulation might be eliminated is simply wrong -- overpopulation is defined by the animals that occupy the turf, behaving as they naturally behave, not by a hypothetical group that might be substituted for them. [p.p. 37-40] ------------------THE COMING ANARCHY-------------------------------------------- by Robert Kaplan "The cities of West Africa at night are some of the unsafest places in the world. Streets are unlit; the police often lack gasoline for their vehicles; armed burglars, carjackers, and muggers proliferate. `The government in Sierra Leone has no writ after dark,' says a foreign resident, shrugging. When I was in the capital, Freetown, last September, eight men armed with AK-47s broke into the house of an American man. They tied him up and stole everything of value. Forget Miami: direct flights between the United States and the Murtala Muhammed Airport, in neighboring Nigeria's largest city, Lagos, have been suspended by order of the U.S. Secretary of Transportation because of ineffective security at the terminal and its environs. A State Department report cited the airport for 'extortion by law-enforcement and immigration officials.' This is one of the few times that the U.S. government has embargoed a foreign airport for reasons that are linked purely to crime. In Abidjan, effectively the capital of the Cote d'Ivoire, or Ivory Coast, restaurants have stick-and-gun-wielding guards who walk you the fifteen feet or so between your car and the entrance, giving you an eerie taste of what American cities might be like in the future. An Italian ambassador was killed by gunfire when robbers invaded an Abidjan restaurant. The family of the Nigerian ambassador was tied up and robbed at gunpoint in the ambassador's residence. After university students in the Ivory Coast caught bandits who had been plaguing their dorms, they executed them by hanging tires around their necks and setting the tires on fire. In one instance Ivorian policemen stood by and watched the 'necklacings,' afraid to intervene. Each time I went to the Abidjan bus terminal, groups of young men with restless, scanning eyes surrounded my taxi, putting their hands all over the windows, demanding 'tips' for carrying my luggage even though I had only a rucksack. In cities in six West African countries I saw similar young men everywhere -- hordes of them. They were like loose molecules in a very unstable social fluid, a fluid that was clearly on the verge of igniting." A PREMONITION OF THE FUTURE "West Africa is becoming THE symbol of worldwide demographic, environmental, and societal stress, in which criminal anarchy emerges as the real `strategic' danger. Disease, overpopulation, unprovoked crime, scarcity of resources, refugee migrations, the increasing erosion of nation-states and international borders, and the empowerment of private armies, security firms, and international drug cartels are now most tellingly demonstrated through a West African prism. West Africa provides an appropriate introduction to the issues, often extremely unpleasant to discuss, that will soon confront our civilization. ..." THE COMING ANARCHY, by Robert Kaplan, in the Feb 1994 Atlantic Monthly. For back issues send $7 to: The Atlantic, Back Issues, 200 North 12th St., Newark, NJ. 07107 http://www2.theAtlantic.com/atlantic/xchg/circ/back.htm -------------------------------------------------------------------