Economic Growth

[Denny Crane!]

There is a much larger question I'm seeking here but for now let me ask this. The effect of the house building industry drying up in the UK has had disastrous effects. At some point though with finite land the large amount of house building that goes on will come to an end, my question is at some point expansion within this finite space must stop. How will that effect our economic model?

[♔Jean-Luc Picard♔]

Construction will begin to move upward rather than outward. It will never really stop.

[Denny Crane!]

Construction will begin to move upward rather than outward. It will never really stop.

It will and even if as you suggest populations merely become denser at that stage it becomes hugely more costly and the environmental strain exponentially greater so consequently would slow to a crawl in comparison. The point stands. Even if it didn't consider it as a hypothetical.

[Del Valle]

Let me take a crack at this. As the housing industry drys up, more people will be forced to become educated and become professionals, resulting in an even more service-oriented economy in the UK.

[JP226]

The effect of the house building industry drying up in the UK has had disastrous effects. At some point though with finite land the large amount of house building that goes on will come to an end, my question is at some point expansion within this finite space must stop. How will that effect our economic model?

You sound like Malthus. He actually believed that with a finite amount of land and growing populations, people will produce less and less on the individual basis until the point we get to a very subsistence existence.

To answer your question directly, you'll just stop building houses, the industry will slow prices will adjust and something else will take that industry's role. In florida we are going through the same problem right now, actually to a greater degree because of things like water shortages, but wht we're seeing is that the economy is expanding and modernizing to support itself off of industires like bio tech, alot of renewable energy companies and unfortunately right now, the financial markets.

[Denny Crane!]

You sound like Malthus. He actually believed that with a finite amount of land and growing populations, people will produce less and less on the individual basis until the point we get to a very subsistence existence.

To answer your question directly, you'll just stop building houses, the industry will slow prices will adjust and something else will take that industry's role. In florida we are going through the same problem right now, actually to a greater degree because of things like water shortages, but wht we're seeing is that the economy is expanding and modernizing to support itself off of industires like bio tech, alot of renewable energy companies and unfortunately right now, the financial markets.

So growth based economies are entirely realistic and sustainable. Probably sounds dumb, I'm no malthusian and I'm very familiar with his work. Scientifically he wasn't actually flawed he just didn't factor in innovation. We are coming up against similar problems he predicted but this time with water instead of food production but of course there will be more innovation. I'm not malthusian but then I'm not exactly a malthusian critic either, concerns were valid.

[Nietzsche]

People will move?

The problem with neat economic models is that they assume a closed system of a finite number of variables. What exists is far more dynamic.

In the absence of mobility, or homes for the many, people will either move or they will become accustomed to less.

[JP226]

So growth based economies are entirely realistic and sustainable. Probably sounds dumb, I'm no malthusian and I'm very familiar with his work. Scientifically he wasn't actually flawed he just didn't factor in innovation. We are coming up against similar problems he predicted but this time with water instead of food production but of course there will be more innovation. I'm not malthusian but then I'm not exactly a malthusian critic either, concerns were valid.

The jury is still technically out on whether or not it's sustainable because we haven't really hit a roof, which may be indicative that their isn't one. We keep pushing out our production frontier so growth, relative to changes in population and technology is sustainable. Slow downs now are the result of growing faster than trend. Gradually even the trend of growth grows.

Malthus' biggest issue was he didn't know what capital was. Back then, capital for the vast majority of the population was a shovel. He ouldn't have imagined computers, planes, robots building cars, and all the communication innovation, cargo containers and gasoline engines that accompanied such innovation. Innovation of innovation. That being said, his ideas do hold water, many third world countries are in the exact position they are in for the reasons he's stated. Limited land, no capital and growing birthrates.

[Lord Consul]

Seneca, your question is based on the premise that the human race will keep on growing and expanding indefinitely, which is something I find rather improbable. Vegetative growth in many industrial countries has come to a halt, some are even shrinking. Russia, for example, loses almost 800.000 people every year. Belgium, France, Denmark and other European countries have been seeing rather low birth rates. Even NICs such as Brazil, India and China have seen their population grow slow down. My country, Brazil, which is no Finland, will start downsizing in 2020.

Post-industrial society hampers population growth due to a myriad of societal and economic factors than comes with the transition from an industrial to a services economy.

[JP226]

Seneca, your question is based on the premise that the human race will keep on growing and expanding indefinitely, which is something I find rather improbable. Vegetative growth in many industrial countries has come to a halt, some are even shrinking. Russia, for example, loses almost 800.000 people every year. Belgium, France, Denmark and other European countries have been seeing rather low birth rates. Even NICs such as Brazil, India and China have seen their population grow slow down. My country, Brazil, which is no Finland, will start downsizing in 2020.

Babies, as cold as it is, are a function of output. And as long as production keeps going up and we can feed them there will be more. Now, rates of growth may change, may minimize, but more people are definitely on the way.

[Denny Crane!]

Babies, as cold as it is, are a function of output. And as long as production keeps going up and we can feed them there will be more. Now, rates of growth may change, may minimize, but more people are definitely on the way.

the richer the country the less babies.

[JP226]

the richer the country the less babies.

proportionally. You'll still maintain positive growth rates off the very fact the the GDP needs them. Babies are inferior goods, the wealthier you are the less likely you are to have kids because of opportunity costs. However, in part, the reason the opportunity cost is higher is because there are more people. You need people, just not too many people.

[Denny Crane!]

proportionally. You'll still maintain positive growth rates off the very fact the the GDP needs them. Babies are inferior goods, the wealthier you are the less likely you are to have kids because of opportunity costs. However, in part, the reason the opportunity cost is higher is because there are more people. You need people, just not too many people.

Prosperous countries pretty much only do this with immigration AFAIK.

[JP226]

Prosperous countries pretty much only do this with immigration AFAIK.

You can have negative pop growth, it's not technically against the law but that's more a function of hitting the roof based on opportunity cost (which in and of itself is based on a number of things. As unsustainable as 10% pop growth, -10% growth is just as unlikely.

It's all based on the steady state, which I'm not going to jump into detail, but in short it's an idea that X amount of people, tech and capital makes you who you are. And those proportions are fairly constant. They do change in the big picture but they cointergrate or one change in one value changes the others.

[Bovril]

The housing problem in the UK is not due to a growing poulation, but due to changes in the demographic structure of households (i.e. more people living alone). Besides, the UK has far more than enough land to house many, many more times the amount of people that are currently living in it. Have you ever driven around the UK? The amount of waste land is huge (as in any country). Just by building on the land we and the EU pay farmers to not do anything with we could build vast housing estates. Space is really not the problem.

Anyhow, as has been hinted at here the changing age structure of the population is more of a problem. But even that is not much of a problem. The greatest proportion of non-working to working people that ever occured in the anglophone world was after WW2 when the 'baby-boomers' were born and grew up. That was also the 'golden age of capitalism'. The direst predictions for the next few decades show nothing like the same relative level of non-working people in our societies. What has changed is that wealth is far more concentrated, capital far more speculative and so on.

The demand for growth is the demand of a sick system that is destroying our planet, our societies and so on. The 'growth' myth also demonstably destroys our abilty in rich countries to maintain our birth rates (look at demographic figures across Europe). What we need is social planing, an end to almost surreal capital investiment and movement (legislated for, not begged for), and, in the final analysis, a socio-cultural devaluation of the accumulation of excess by government, religion, entertainment and so on. A system based on constantly accumulating more useless crap which only serves to make people unhappy (I refer interested readers to the research on hapiness as a function of wealth) is a system we need to work together to dismantle.

[JP226]

The demand for growth is the demand of a sick system that is destroying our planet, our societies and so on. The 'growth' myth also demonstably destroys our abilty in rich countries to maintain our birth rates (look at demographic figures across Europe). What we need is social planing, an end to almost surreal capital investiment and movement (legislated for, not begged for), and, in the final analysis, a socio-cultural devaluation of the accumulation of excess by government, religion, entertainment and so on. A system based on constantly accumulating more useless crap which only serves to make people unhappy (I refer interested readers to the research on hapiness as a function of wealth) is a system we need to work together to dismantle.

zzzzzzzzzzzzzzzzzz, this is garbage

Let me translate this, "I do not believe in technological nor the innovative spirit of the human mind." Spoken by someone in my mind that would seem to be an out of touch sociologist.

[Bovril]

zzzzzzzzzzzzzzzzzz, this is garbage

Let me translate this, "I do not believe in technological nor the innovative spirit of the human mind." Spoken by someone in my mind that would seem to be an out of touch sociologist.

Growth in no ways implies techological advance, and criticism of the ideology of growth in no way implies the criticism of technological advance. Adress the points I actualy made. Acumulation of assets that have no functionality as regards increasing human wellbeing are both socially damaging and environmentally disasterous. If you disagree, go adress the research. If you have a program which can read data from the European Social Survey, for instance, I'd advise you to go fiddle around with it and discover some interesting correlations concerning these issues.

Besides, how could asking for radical social and cultural change be translated as denying the "innovative spirit of the human mind"?

[JP226]

Growth in no ways implies techological advance, and criticism of the ideology of growth in no way implies the criticism of technological advance. Adress the points I actualy made. Acumulation of assets that have no functionality as regards increasing human wellbeing are both socially damaging and environmentally disasterous. If you disagree, go adress the research. If you have a program which can read data from the European Social Survey, for instance, I'd advise you to go fiddle around with it and discover some interesting correlations concerning these issues.

Besides, how could asking for radical social and cultural change be translated as denying the "innovative spirit of the human mind"?

... and all corporations are command economies or whatever the hell it was you said a while back.

[Admiral Piett]

I think as the economy grows, environmental concerns grow with it. Humanity's future really lays in the stars.

[Generaal Van Heutsz]

There is a much larger question I'm seeking here but for now let me ask this. The effect of the house building industry drying up in the UK has had disastrous effects. At some point though with finite land the large amount of house building that goes on will come to an end, my question is at some point expansion within this finite space must stop. How will that effect our economic model?

This guy has a very interesting and motivated view on the matter, the series is over 3 hours but well worth watching: http://www.chrismartenson.com/crashcourse