Are we in a Golden Age?

It is easy to become absorbed in particular problems and in the disaster stories that dominate the daily media. Climate change, natural disasters, wars in Africa and Asia, Financial Crises, riots and food price rises: you would be forgiven for thinking the world is going to the dogs. Is it really, however, or is that just the gloom you get from staring at the problems and not smelling the roses?

The major indicators of how we as humans are doing are smelling exceptionally rosy. We are living in a golden age of progress and opportunity for humanity. Let’s list some of the big changes in recent times:

  1. Life expectancy is going up by a lot. Whereas the average Australian would not have expected to see 50 in 1885, the average Australian now can expect to live beyond 80. The same trend goes for both developed and developing countries. For the world as a whole, the World Bank reports that life expectation has thus crept up from about 52 in 1960 to 69 in 2009. And the increase is greatest in poorer countries, so there is even increased equity in terms of life expectancy by country.
  2. There are more of us every year, but the numbers are stabilising. According to this source, we used to be with no more than 50 million some 3000 years ago, reached 1,5 billion in 1900, now count close to 7 billion, and can expect to be with close to 10 billion in 2050 after which a reduction is expected. Whilst the increased numbers, who can all expect to live longer than our ancestors ever could, is itself a sign of success, the expected peaking, due to reduced fertility levels virtually everywhere in the world, is also very good news because it means the old nightmare-scenario of a Malthusian melt-down is now highly unlikely.
  3. We are less and less violent. Trends in murders and homicide are at incredibly low levels from an historical point of view: whereas our hunter-gatherer ancestors were believed to kill off about 1 in a 100 every year, modern Western society sees one homicide per 10,000 as very violent, corresponding to exceptionally violent countries like the US. More normal levels are in the order of 2 per 100,000. Globally, the trends have even been going down in the last 10 years. Trends in armed conflict also speak of exceptionally peaceful times. The Upsalla Conflict Data Program thus collects statistics on how many combatants die in total in organised conflicts around the world. The basic facts are that the period just after WWII was easily 5 times as violent as the 1980s per capita, whilst the 2000s are easily twice less violent again than the 1980s. The trend for the last 10 years too has also been clearly downward in per capita terms.
  4. Less of us are poor and more have access to basic facilities (clean water, sanitation, literacy, etc.). Global output growth in 2011 is in the 2-3% range, the vast bulk of which in poorer countries. Great news for inequality reduction hence.
  5. We are getting happier as the poor amongst us are getting richer. As one can see from the World Value Survey, the relation between income and happiness is very robust by country and we furthermore know that countries who escape dire poverty also increase their happiness. So the world as a whole is almost certainly getting happier. Even within countries that are in an economic downturn like the US, the average life satisfaction is about as high as it was before the downturn.
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Richard Tsukamasa Green
Richard Tsukamasa Green(@richard-green)
10 years ago

On one level I do like the disatisfaction with whatever a status quo is, as long as it is used as impetus to continual improvement. Then again the disatisfaction can be used for reaction or destructive utopianism.

What’s strange though is I’ve found when making pretty much the same case to people is that they tend to be most resistant to point 3, which is also the strongest. It bears remembering that were we to have a conflict on the relative scale of the An Shi rebellion of the 8th century today – a conflict that a miniscule proportion of the population has heard of – we’d be looking at a death toll up to 1 billion people. Human violence is so staggering low today, but it is harder to get people to recognise this than lower hunger, unhappiness etc.

Also, the past quarter century has coincided with my period of existence and from an admittedly subjective perspective, has been a golden age.

Mike Pepperday
Mike Pepperday
10 years ago

I agree with much of your post Paul, but rather than saying we are living in a golden age, I would say we have been living in a golden age. I reckon the baby-boomers of the industrial world had it, and continue to have it, as good as the humans will ever have it. From now on it’s downhill.

You support your contentions variously with Australian statistics or world statistics, which confuses things. The world, seen in average or aggregate terms, may continue to get better – at least for a while. As you say, greater equality. That is global equality. For a while, as we hasten to turn the whole planet into Easter Island.

But the industrialised world is different. There, there is increasing inequality accompanied by pervasive social decline. The 1960s was the golden age. Since then the “developed” countries have been marking time. Their wealth stopped increasing a generation ago. There is now little potential for improvement and much potential for trouble: unemployment, depression, dysfunctional families, addiction, suicide, crime, political extremism, terrorism. Controls become ever-tighter; mistrust ever greater.

What is there to look forward to? A better shopping experience? More exciting fashions? More features on our mobile phones? Modern societies live from year to year with no plan except to react to the next problem. People no longer assume that children will live a better life than their parents. Despite an unprecedented range of entertainments, modern society is predictable and dull. Where is ambition, adventure and excitement? In commerce? In an occupation? There can be dignity in making a living but that which distinguishes the human animal – wonder, exaltation, glory – has nothing to do with providing food and shelter.

No wonder birth rates are low: with nothing to live for we have lost the will to live. Humans are not content just to be born, to exist, and to die. We differ from other social animals in that we seek some purpose to life other than status advancement and procreation. Yet that is all the sterile, fearful, anxious, modern world offers.

Paul Frijters
Paul Frijters
10 years ago

richard,

I had to look up the An-Shi rebellion to remind me of what it was!

I agree with your contention about the resistance to point 3. I attribute that resistance ton the urban romanticism regarding the peaceful nature of previous times and cultures. That peaceful nature is used to argue we should return to some other aspect of simpler societies. You for instance see that romanticism prop up in various political philosophies that want to start from some pristine state in which peaceful rational individual get together to create the perfect society. If you start from the historical reality that life without the coercive social structures we have now is far worse than life with it, then of course the pristine-state philosophies lose much of their appeal. Hence the resistance to the stylised fact.

Mike,

agreed that there is increasing relative poverty in richer societies, but I disagree with most of the rest of your list. “unemployment, depression, dysfunctional families, addiction, suicide, crime, political extremism, terrorism.”
If I go back 40 years, I would expect more terrorism, more extremism, more crime, dunno about suicides, more addiction, about as many dysfunctional families, maybe less depression, and just as many people without gainful employment. Maybe Richard will do the honours and look up the numbers :-)

conrad
conrad
10 years ago

Mike,

I disagree that the 60s were the golden age. For whom? White heterosexual males? Perhaps an alternative way of looking at it is that the extent things will get better has slowed, so if people are concerned about things getting better rather than absolute values of goodness, then now might be a worse time than then – but not in terms of absolute values.

Note that I do think that in terms of how people feel, actual perceptions of whether things will get better does make a big difference and I’m pretty sure there is data to show that in terms of human happiness. This is why everyone is always happy to get a pay rise, but if you are paid relatively well but then take a pay cut, you will often be unhappy. Hope obviously means something to many.

David Walker
David Walker(@d-w-griffiths)
10 years ago

Paul, what’s interesting to me is how few people seem to believe this to be true. They particularly talk about terrorism, which is a relatively minor threat in the long sweep of history.

I would add a point six to your list: The nuclear threat is receding. Even people in their mid-forties seemingly have to be reminded that 30 years ago there was serious concern that some sort of nuclear launch (possibly accidental) would lead to the rapid death of much of the world’s population. Nuclear terrorism seemed a relatively smaller but nevertheless serious potential threat in the post-Soviet age; you could imagine it killing a million people, say. But that has not so far appeared.

I would also add a point seven: knowledge which used to be scarce and difficult to access is now almost freely available. Forget broadband: a $200 computer and a $10-a-month narrowband Internet account will give anyone in a developed nation access to Google and Wikipedia, and hence to more knowledge about most things than you could ever absorb. For most of human history, this was an impossible dream.

It’s an age of miracles, and I puzzle as to why so few people see it that way.

Paul Frijters
Paul Frijters
10 years ago

Conrad,

hope certainly means something. I have a paper with Xin Meng coming out soon that makes the point that Chinese political stability is in large part due to great optimism keeping the poor happy. Optimism is quite high in Australia though, don’t you think? It still is a ‘no worries’ country I find.

David,

agreed. The list can be extended quite a bit.

Patrick
Patrick
10 years ago

It’s an age of miracles

That is an excellent summary. One might add as a coda: ‘and sin’.

I am personally convinced that no 1 is massively underestimated – after all it is backward-looking and can’t take into account future advances.

conrad
conrad
10 years ago

“Optimism is quite high in Australia though, don’t you think?”

Yes — although it’s very hard to see why people wouldn’t be optimistic, at least compared to the rest of the world, and I can’t think of any time in my life when any sensible person would have thought:”Australia is going to get worse from now and for the forseeable furture”. As a comparison for a worst case scenario, even if we all lost 30% of our income, we’d still be better off than Kiwis, and I don’t think I’d have too much trouble living a happy life and getting anything I wanted in NZ (although I doubt many people think like this — I realize most people would be horrified to lose 30% of their income). Your paper on China sounds interesting — I guess the baseline for optimism for most Chinese is going from essentially the most difficult life you can have to something slightly less difficult (or possibly something less difficult for your children), which really shows how relative it all is. I’ll make sure I have a look at the paper — there is a lot of stuff in psychology in this area (not that I know much of it — it’s not my area), and looking at the different approaches should be interesting.

Steve Dunera
Steve Dunera
10 years ago

There was a time in the 1980s when Lee Kuan Yew was saying that Australia was the poor white trash of Asia and when the treasurer was making statements about being a Banana Republic.

It was relative deceline that was being predicted but it was still a big deal at the time.

The comparison with NZ is interesting. In the 1950s and 1960s NZ had a higher standard of living than AU or the EU. Today it’s different. If you’d told people in NZ that their relative wealth would only be 2/3 or 3/4 of AU in 2010 it would have been interesting to see what they would have thought.

The point of the post that our living standards are remarkable is true. The point David Walker makes about nuclear war is very true as well.

What about the spread of Democracy and markets as well? Surely for the world that is really something. The Arab Spring is the latest great news in that respect.

Don Arthur
Don Arthur(@don-arthur)
10 years ago

Optimism is quite high in Australia though, don’t you think?

Here’s some of the results from the 2009 Scanlon Foundation social cohesion survey:

When asked to consider their future prospects, 82% (85% in 2007) expected that their lives would be the same or improved in three or four years, 12% (11%) that their lives would be a little worse or much worse. But when asked about the future of today’s children, only 54% (52%) of respondents expected that the children’s lives would remain the same as their own or would be improved – a substantial minority of 42% (43%) thought that their children’s lives would be worse. When asked for their reasons, there was a broad range of response. The most common references were to cost of living and housing (27%), low moral standards and materialistic lifestyle (23%), environmental problems – pollution and climate change (22%), crime and drugs (22%), government issues (13%), the prospect of unemployment and poor working conditions (11%) (Figure 10.1). As in 2007, there were very few references to the traditional fear of war or to terrorism.

Mike Pepperday
Mike Pepperday
10 years ago

Conrad: “So if people are concerned about things getting better rather than absolute values of goodness, then now might be a worse time than then – but not in terms of absolute values.”

No doubt many statistics would show some absolutes have improved. But are they the important things? Have house prices improved? Land prices? Access to the beach? Traffic? Ease of getting a job? Ease of starting a business?

Take the absolute of terrorism. I think you could actually make a case that it is much worse but is it germane? The fact is people are concerned. Perhaps their concern is the result of 1984-style government incitement rather than a real threat but the concern is there. We now think it normal that security cameras are everywhere and that security guards haunt buildings. Where are we headed with this? In 1990, flying over the Greenland glaciers, I asked and was invited to go forward to the cockpit of plane. That’s only 21 years ago and already almost unimaginable.

Terrorism is the big-time. The everyday level corresponds. A couple of years ago a police car pulled me over in the middle of nowhere in country NSW and told me (somewhat apologetically, I’ll grant) that I had been noticed cruising past a certain primary school. He’d chased me down maybe thirty km. I had indeed been looking at the bush school of my childhood. Is it any wonder that there are zero male kindergarten teachers and only a few male primary teachers? Socially, we – the industrialised world – haven’t a clue what we are doing or where we are going.

Yes, we live the age of miracles and when the opportunity offers I do just as Paul did in the post – point out how everything is better, particularly war. Like you, David, I once puzzled why people don’t see it. But in my comment above, I offer some explanations. Do they not make sense to you?

The cliche has it that the journey, not the arrival, is what counts. It’s true. I once took it into my head to learn to fly a sailplane. The club members had stories of the old days when they put gliders together out of string and cloth and glue. I became aware that the club had almost no young members. Were the old geezers’ yarns that boring? Not really. But they were irrelevant for to fly nowadays you plonk down the money for a sleek piece of plastic and carbon fibre (impossible as DIY) and then you get yourself towed aloft as often as possible to practice, practice, practice. Was it the expense? Again, not really. The problem was that there was no project. The old guys had dreamt of decent aircraft but the dream was realised. So they might as well shut the shop. I understand a similar problem applies to dinghy sailing. There remains only cut-and-dried, rule-bound competition – which appeals to a few – with no challenge of the new, no room to invent, no project.

Inventive youths in garages dreamt about fast computers and an internet. Their dream has been realised. At the end of WW2 everyone in the West could dream of a better society. But the dream has been realised. For all its recent geeky wonders, our society stopped becoming better a generation ago. Like a modern glider there were details to refine but there was nothing left of the social dream.

Of course, China does not have the problem. Optimism keeps them happy? That’s one way of putting it. They have a dream. They are going somewhere. Our societies have no dream. By taking the low hanging fruit (in terms of resources and ecology) perhaps a billion people have reached human potentials for health, comfort, security and liberty, and now they just react to problems, struggling to stay there.

JC
JC
10 years ago

It is easy to become absorbed in particular problems and in the disaster stories that dominate the daily media. Climate change, natural disasters, wars in Africa and Asia, Financial Crises, riots and food price rises: you would be forgiven for thinking the world is going to the dogs. Is it really, however, or is that just the gloom you get from staring at the problems and not smelling the roses?

http://www.bloomberg.com/markets/rates-bonds/government-bonds/us/

Paul

Take a look at the US yield curve and the Fed just flattened it. They will be moving it from a slight positive slope to a flat one, which is a tightening of monetary policy, but they think it’s a loosening! I think we’ll be seeing each other on the other side of this golden age somehow.

JC
JC
10 years ago

Oh I forgot to mention Short term Treasury bills are negative, which means people are paying the Fed to park money in T-Bills. Yes really.

Patrick
Patrick
10 years ago

I think the only thing Mike lacks is imagination. The Mike Ps of your fathers generation didn’t imagine fast internet or computers.
Children today can build robots and software, there is always something else.

Paul Frijters
Paul Frijters
10 years ago

JC,

in an era where billions in the world are getting a better life you want me to worry about a yield curve in America, a place with high happiness, high life expectancy and where the worst things that has happened to them recently is that they have not become even richer but have remained as rich a couple of years in a row?
I would say it is the mark of a golden age that we worry about such trivialities. The Eastern European collapse, the Asian financial crisis: now there were recessions that had really big impacts on the countries involved. And even those couldnt halt the general improvements in the world.

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10 years ago

in an era where billions in the world are getting a better life you want me to worry about a yield curve in America

If the USA tanks, what do you think happens to the golden age?

Happytalk
Happytalk
10 years ago

The post is out of date since it does not recognise the full-speed scuttling that has been in place since the last year of the Bush administration, when Henry Paulson took over the job of treasurer. You can date the problems much earlier of course. But here we saw an acceleration of dysfunction under Paulson. We are in a great deal of trouble, since any recovery from the US will bring with it energy-stress. Our own prosperity is a delusion, since it is all about selling off the farm, and going deeper into debt. The gaining of debt and loss of ownership is ignored by economists, because its not present in their productivity figures, which are dysfunctional in other ways also.

Happytalk
Happytalk
10 years ago

“…..they have not become even richer but have remained as rich a couple of years in a row?”

Here you rely only on GDP. And worse still on official “real GDP” figures that are ruined by the Americans false inflation metrics. The reality is that American living standards have collapsed. Others have said that living standards have collapsed to 1989 levels, and that this is made worse by incomes being more unequal then before. If the figures are nonsense then one has to ignore them. I cannot vouch for anyone elses estimates but one can say with full confidence that the official figures are nonsense.

David Walker
David Walker
10 years ago

Happytalk, one of the notable events of the 2000s was that Austrlians’ outward foreign investment pretty much caught up with inward foreign investment. We bought a lot of other people’s “farms”. This has been pretty well documented by economists like John Edwards, who now sits on the RBA board. Another example of people assuming the worst.

Paul Frijters
Paul Frijters
10 years ago

JC, ., and happytalk,

is your prediction that the USA is really going to implode such that any of the metrics 1-5 are in danger in that place? It is not just GDP that is looking healthy for the US. Their happiness levels are fine, their health is not as good as ours but still much better than that of developing countries, etc.

The demise of the US is vastly exaggerated. Much of its economy is doing great. And the rest of the world is already more tied in terms of trade to the fast growing economies of Asia than to the US, which is exactly why US GDP can flatline whilst world output is merrily improving. I am afraid you guys have been conned into believing some doomsday stories.

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.
10 years ago

Please do not ever put me in the same category as “happytalk”, aka Graeme Bird.

Their happiness levels are fine

What about the happiness levels of the unemployed. May I remind you where US U6 lays at?

http://portalseven.com/employment/unemployment_rate_u6.jsp

Patrick
Patrick
10 years ago

PF@20 are you sure? what parts of their economy are doing fine? As suggested it is not the parts that a great proportion of the country historically depended on. You don’t have to be too pessimistic to note that the ‘west’ is enduring a massive structural shift that may well see continuing improvement on a number if not all the metrics you cite but at the same time a large loss of ‘satisfaction’ and ‘happiness’ as millions find themselves without an industry let alone a job.

I agree that this is no reason not to rejoice in the broader rise in global living standards – I was particularly amused to note the unions lining up to criticise developing world job creation by Bluescope recently – but it doesn’t mean that there are not urgent social and economic issues to attend to here.

On the whole western policymakers would surely do much more good to attend to those issues than anything else.

conrad
conrad
10 years ago

dotty,

even if the US entirely tanks, it’s not the end of the world. Sure, it’ll cause problems for a few years, but you’re talking about a place that never mangaged to export more than Germany for the last decade or two, and their main export (i.e., military equipment) is becoming worth less given people are fighting less (especially in terms of “high-tech” fighting). In addition, if a few million more Americans are unemployed but hundreds of millions of others come out of poverty, then surely in a hundred years time, people will look back and think they were still good times to live in.

Happytalk
Happytalk
10 years ago

“Happytalk, one of the notable events of the 2000s was that Austrlians’ outward foreign investment pretty much caught up with inward foreign investment. We bought a lot of other people’s “farms”. This has been pretty well documented by economists like John Edwards, who now sits on the RBA board. Another example of people assuming the worst.”

We have to recognize BOTH direct investment and debt. Not just one. Not just the other. We are selling off the farm. There is no getting away from that fact. There are very good reasons why we are doing so, to do with the financial imbalances inherent in our policy settings. Two years ago our banks were borrowing from overseas banks, more than they were lending to overseas banks, by a whopping 9% of GDP. We ought not delude ourselves as to our policy failure.

Paul Frijters
Paul Frijters
10 years ago

Patrick,

see here for a breakdown by rough sectors that tells you 2010 was a normal growth year in the US: http://www.bea.gov/newsreleases/industry/gdpindustry/gdpindnewsrelease.htm

Corporate profits have hit record levels in 2010. Apple recorded top profits. Military exports are up, estimated to hit 46 billion this year.

As noted earlier, there is no noticeable drop in satisfaction in the US or other Western countries that I am aware of. Part of that is the optimism Conrad and Don note when it comes to people’s own lives. Indeed, happiness researchers speak of a puzzle of increases satisfaction in Western countries.

The one clear dip in the aggregate statistics that I know of is mental health problems. They have increased in the last 30 years in the West and we don’t really know why. Lots of stories, little evidence.

Happytalk
Happytalk
10 years ago

“is your prediction that the USA is really going to implode such that any of the metrics 1-5 are in danger in that place? It is not just GDP that is looking healthy for the US. ”

Look what did I tell you? If the figures are no good you must ignore them. Or else its just global warming all over again. Here we know for a fact that the US understates its inflation rate. Therefore it overstates its GDP. Ergo if GDP has been stagnant for two years, by their own admission, its been falling in reality.

So the US is already collapsing even by the wrong standard of GDP. And there is no way the US can get off the floor with current policy. How could it? Economics isn’t magic. They need investment resources. Not just loanable funds, but real resources. But if you steal these investment resources in endless banker bailouts, and that which you don’t steal for the bankers, you piddle away to public servants at the rate of 200 billion odd per month, then there is no basis for the US economy to stop its current collapse.

On top of that a recovery would clearly spark energy stress. So they are in a lot of trouble, unless they can close down government departments by the bakers dozen, and institute some sort of partial jubilee, and otherwise get the parasitical bankers off their backs.

Happytalk
Happytalk
10 years ago

“Corporate profits have hit record levels in 2010.”

Thats not a good sign thats a bad sign. Inflationary monetary policy and deficit spending lead to economic degradation AND HIGH PROFITS. They lead to both at the same time.

Paul Frijters
Paul Frijters
10 years ago

Don,

the optimism figures you quote are interesting. I am not surprised about the distinction people make between their own life and that of their children: there is a similar puzzle when you compare what people say when they look forward to when they look back. You almost invariably find people think things were better off in the past, but that they for themselves think things will be about as good in the future, if not better. It almost appears that if people can gratuitously complain, they will, but nevertheless have reasonably rational and optimistic expectations about their own future well-being.

Paul Frijters
Paul Frijters
10 years ago

oh, and according to research by Tony Beatton, Australian kids are exceptionally happy. No sign of pessimism amongst them at all!

conrad
conrad
10 years ago

“The one clear dip in the aggregate statistics that I know of is mental health problems. They have increased in the last 30 years in the West and we don’t really know why.”

I think there are at least three obvious factors. One is simply reporting. Who would have admitted to having a mental health problem 30 years ago? It’s still a problem in many groups. A second is that we have vastly more people identifying them these days, and people know much more about them — so once upon a time you could just wander round with, say, PTSD or social anxiety, and have a bad life, but now someone might actually notice. A third is that aging populations mean that there are simply more neurological problems that go unidentified that cause mental health issues.

A good way to actually test whether we are getting greater numbers of mental health problems or whether a lot of it is simply reporting is to try and look at indicators for common ailments. If you look at suicide as a marker of severe depression, for example, you don’t see great increases (sorry, I can’t find the stats quickly that go further back). Of course one could argue that we have better treatments now too, and this is a potential confound.

Despite this, I don’t believe mental health problems are on the increase as the statistics suggest. Perhaps they are increasing, but I don’t think it’s by huge amounts — to me this is mainly a reporting bias and identification issue. Given this, I wouldnt buy it as something that is getting worse.

.
.
10 years ago

Conrad,

I’m aware of the trade figures. They’re particularly illuminating, aren’t they?

The problem is that Chinese and Indian demand is derived from US demand. Copper for example is driven by US housing. The US is still the biggest industrial power and driver of silver prices.

Other problems could be more banking bust ups as monetary policy has painted itself into a corner. All they can do now is QE, sterilisation and LLR stuff.

Now Paul I’m not saying what you are stating is untrue. I think we have a different veil of ignorance.

Can ban Graeme for his unhinged, protectionist, invective laden ramblings?

Paul Frijters
Paul Frijters
10 years ago

conrad,

yes, your story is certainly one of the main ones.

What speaks against your story are things like the real and undoubted increase in obesity. The central explanation for that increase is that many of the obese feel depressed, out of control, and useless. They eat too much and exercise too little because they lack the self-esteem to successfully fight the food temptations. It is hard to escape the conclusion that this is indeed a form of mental health problem that is on the increase.

Happytalk
Happytalk
10 years ago

Part of the problem with economists claiming things are so rosy, is that they don’t analyse what GDP is. Per capita GDP can never be a good indication of well-being. GDP = C+ (net)I + G + X-M

So what do we have here? We pay for G. G is a cost. Its not something that we are better off for when there is more of it.

Supposing our measure of well-being was instead GDP-2G/number of taxpayers. We would do this to reflect that we have to pay for GDP. Well no one measure is perfect of course. But we then see the mystery of why it was possible for a fellow to keep a wife and raise four kids from an entry-level job back in 1966. And why he probably couldn’t imagine doing so today. So economists everywhere are engaged in this happytalk that things are just marvelous. But they are not analyzing their statistics with great depth.

Probably its the economists that are doing better than ever. Maybe thats the real story here.

Happytalk
Happytalk
10 years ago

“I am afraid you guys have been conned into believing some doomsday stories.”

No I’m afraid its you that has things totally wrong. Your subsequent comments show that you don’t understand some very basic things. Supposing GDP is stagnant like during the Australian stimulus. Then supposing profits increase and government spending increases. Where does that leave the rest of us? It leaves the taxpayer, impoverished to some extent. You say the Americans are experiencing such high profits, as if thats a good thing. Its a sign of grave trouble. Successful capitalism ought to be akin to a conspiracy to reduce profits. High profits and high unemployment together are not a sign of well-being. Yet thats what you have been implying.

.
.
10 years ago

Successful capitalism ought to be akin to a conspiracy to reduce profits.

Don’t go too far. You still need massive profits as a signal for innovation.

Happytalk
Happytalk
10 years ago

No thats wrong. Successful capitalism is where profits economy-wide are going to be pretty low. Innovation and technology have no bearing on profits on the economy-wide level.

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10 years ago

Innovation and technology have no bearing on profits on the economy-wide level.

I’m pretty sure that profit levels have risen over time as economies have developed.

I’m also certain that the profit motive is a big driver of innovation.

conrad
conrad
10 years ago

Paul,

I think there are increases in particular groups for obvious reasons (e.g., soldiers). However, at least for your obesity story:
(a) obesity may simply be a modern day outcome of some problem, and 30 years ago people may have had the same problem but with different symptoms. If this isn’t the case, then we are forced to conclude that countries that don’t suffer obesity (which is most countries, including many rich ones) have different levels of this sort of mental health problem which is stopping their citizens becoming obese. So I don’t think that obesity shows that mental health problems are on the rise in the causal direction from mental health->obesity. In the opposite direciton, I’d bet there is an effect — both because it must be depressing to be obese and because it is associated with strokes and so on that might go unnnoticed leading to an increase in neurologically caused mental health problems.
(b) most people become obese over long periods of time (generally many years) — so it isn’t that most people are simply eating too much — it’s actually very small amounts too much over great amounts of time. So I’m not sure that this is an issue to do with impulsivity control or other such things.
(c) There are poorly understand long term predictors of obesity. Obese children, for example, a more likely to be obese adults (god help the next generation…). Some of this might be social learning, but there are also long term physiological changes that I believe are not well understood. So the increase in obesity might, for example, be at least in part due to the way chilren have brought up and really nothing to do with different mental states.

.
.
10 years ago

Conrad,

Are you talking about epigenetics?

Happytalk
Happytalk
10 years ago

Well of course the profit motive is important. But profit levels don’t go up as the economy progresses. They go up because of lack of savings, high monetary inflation, less retained earnings, and deficit spending. In other words they are almost always a sign of ill-health. You could look at profits as financial triage. Since profits are needed for the mere survival of the economy, when policy is really really bad, the profits will be there for mere survival.

Drops in business revenues, that we don’t know about, since economists refuse to compile them, will lead to sudden drops in the profit level. This is no healthy thing. I’m just listing it as an exception to the general rule that excessive profits economy-wide are almost always a sign of ill-health.

Actually in the undeveloped economy the entirety of income is basically profits. That is to say in a primitive low-population setup almost everyone is working for a straight profit.

Paul Frijters
Paul Frijters
10 years ago

conrad,

yes, obesity is not itself an easy issue to understand. The kid story can be somewhat discounted though because the huge increase is most pronounced in older cohorts who will not have been obese as kids themselves.

conrad
conrad
10 years ago

dotty,

no, I’m just talking about what’s been suggested from excersize physiology. If you want an equivalent example as obesity, then heart disease is one. Many people know they have it, know it’s bad, know how to get rid of it (just go on a low fat diet for a year or two and excersize every day), but don’t do anything about it. I don’t think this is because they have mental health issues.

Happytalk
Happytalk
10 years ago

A low fat diet isn’t going to help with heart disease. A low-fat diet will make you sick. And fat as well. Heart disease and obesity may be connected with impaired thyroid function. Which can be caused by a number of things, by far the worst of which is where the water is poisoned with fluoride.

People who have been getting thyroid treatment for more than two years, don’t tend to get heart disease.

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10 years ago

Okay conrad I just find epigenetics very interesting as it relates to fitness and diet etc, particularly the effects of post WWI and post colonisation poverty on GDP growth potential, human capital, etc.

JC
JC
10 years ago

Paul.

U6 unemployment in the US is close to 20%. In the black male population it’s probably up there at 25 to 30%. I’d take a rough guess that people in Europe and the US are stressed out at the moment. This sort of thing doesn’t make for a lot of happy campers I reckon even if they are miles wealthier than people in fast emerging nations.

Do I believe in doomsday predictions? Not really. However I do take data facts seriously and in my opinion having 6 month T-bills in the US at negative interest rates doesn’t portend to a continuing golden age, or at least it may suggest a interruption.

As for your belief that global GDP growth can motor along with the US and Europe basically stagnant or retreating…. I think the EMC and the West are pretty much joined at the hip as we saw in 08.

It would be interesting to get data if there is correlation between GDP growth and all the things which make people satisfied.

Happytalk
Happytalk
10 years ago

Of course I’ve been entirely one-sided and unfair here. When we look at the rise of China and India we would have to say its a golden age. Just think of the concentration-camp-like status that the Chinese had back in the 70i’s. And the grinding poverty of India as opposed to a growing middle-class now. But I am concerned about the Happy-talk we have to do with our own country and with the US. Where policy has gone off the rails for obvious reasons in the US and for more subtle reasons here.

The West is in trouble energy-wise. China has locked in a lot of its future energy base thanks to our sell-off here, and because it has embraced nuclear energy. But the US and Europe are in grave trouble. One thing we had to look forward to with recessions in the past is that they always brought on cheap energy. Now look at the US. In trouble and yet with high energy costs. “Peak Oil” may be a limited model, only relating to a sub-sector of the oil market, rather than the totality of the energy market. But in the current restricted environment it has some predictive power.

KB Keynes
KB Keynes
10 years ago

U6 unemployment is 16.2% . Yes it is closer to 20% than 10% however I doubt whether many would think 16.2% is close to 20% perse’.

u6 unemployment is little different to other measures of unemployment.

Unemployment stopped rising because of the stimulus but because the net public stimulus was relatively small that is all it did.

They needed a Stimulus more like we successfully had.

Happytalk
Happytalk
10 years ago

Homer you can show that stimulus can increase GDP in the medium term. I’m quite happy with that claim. You are not going to be able to show that stimulus can increase employment on any time-frame. Try it sometime. It won’t wash empirically like the GDP claim arguably will.

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10 years ago

u6 unemployment is little different to other measures of unemployment.

Stop lying.

KB Keynes
KB Keynes
10 years ago

You are the one that is lying. Put the measures on a graph.

They all move the same way. It is not behaving at all different to any other measure.

They all move up together and fall together.

imagine that