I mentioned yesterday that the growth in global world product was the best available overall indicator of technical and economic progress. This is because it summarizes all improvements in human productivity at creating goods and services. The above data for global growth rates come from Berkeley economist Brad Delong before 1980, and from the IMF after 1980.
However, some caution should be applied - because innovations can easily take a century or two to diffuse throughout the world, GDP growth is some kind of weighted average of the last couple of centuries of inventions. Eg China is now massively deploying railroads (invented in the early nineteenth century) and freeways (invented in the mid twentieth century), and other parts of the world have still not done so.
At any rate, you can form your own opinions as to whether the graph is above is
- Accelerating upwards towards infinity at about 2045 (a la Kurzweil).
- Soon to go permanently negative (collapse)
- Having peaked in the 1950s, now going to gradually asymptote down towards zero (steady state world).
- Going to continue at the same rate forever.
For what it's worth, when I combined the two data sources and fit a trend line for the post-1900 period, it turns out there is no trend in that period:
I don't know. GDP is an odd sort of metric of "progress". It might be more accurate to say it measures the commoditization of our lives, and buy-in to the western way of life, not to mention conversion of "free" natural resources into transient economic ones.
ReplyDeleteMothering isn't calculated into GDP, while lawyering, lobbying, and drilling for oil are. That seems seriously unconnected with "progress".
Burk:
ReplyDeleteWell, certainly not spiritual or moral progress. But the main driver of economic growth is improvements in labor productivity, which is what makes it a pretty decent metric of technological progress (albeit with a smearing function over a century or so).
True, there's no LINEAR trend since 1900. But there may be be something non-linear going on - a peak around the middle part of the period, and then a decline? The next few years should be interesting.
ReplyDeleteYeah, it's definitely not just random noise - you've got the depression, big boom following wwII, slower growth in the seventies with the oil shocks, and then accelerating again in the late 1990s and 2000s with the rapid growth of BRIC countries. Doesn't lend itself to a single-factor story I don't think.
ReplyDeleteOk, so last year was the lowest rate of growth in 1000 years, maybe ever for all we know.
ReplyDeleteYou know, if I had written your post, Stuart, I think I would have mentioned that in the text somewhere! :-)
So, I guess I'm back. Fuck me. I'm addicted!
DM:
ReplyDeleteWelcome back indeed! Most glad to have you again.
(The data before 1980 is aggregated across multiple years, so we can't judge how 2009 compares to other 1 year events)
So, if this graph shows global growth rates, and we subtract out the high-growth countries like China and India, does that mean that the rest of us are having seriously negative growth? It sure looks like it.
ReplyDeleteIt also feels like it, although that might just be my meds wearing off...
Don't share this with anybody, because it's really kind of embarrassing to admit this, but I have some personal experience with living beyond my means, declaring bankruptcy, and having to live within seriously reduced means afterwards. What I see happening to the US is almost exactly the same thing. We lived beyond our means for way too long, and now the chickens, as Rev. Wright famously said, are coming home to roost. And it ain't gonna get any better any time soon (unless we're all willing - or able - to live on a dollar a day like all those hard-working Chinese).
Speaking of which, if things don't get significantly (or even moderately) better soon, there's going to be more political pressure in the US (and other previously high-wage industrialized countries) to engage in some sort of protectionism. Ane we all know how well that turned out back in the 1930s...
MisterMoose:
ReplyDeleteNo, US (and European) growth is mostly positive - around 3% annually in the US (but not during recessions obviously). The data are here.
Stuart:
ReplyDeleteThanks for the link. Now I understand why I'm feeling so much depression (as opposed to recession, when it was my neighbors who were out of work). I've been in the construction industry most of my life, most recently in residential construction, and those areas seem to be the ones with the worst negative growth.
I am concerned, however, about all those Chinese and Mexicans who make so much less than Americans, Germans, and Japanese to do the same kinds of manufacturing work (Chinese Labor Costs, Feb. 18). If those numbers don't change soon, we will be in a permanent recession. Polaris, which makes snow mobiles and jet skis in Wisconsin, is moving its operations to Mexico, 'cause the workforce in Cheeseland is so over-priced...
MisterMoose:
ReplyDeleteIf you're in construction, then you have my sympathy, big time! I think it's going to be rough in that industry for another few years yet. If you haven't already discovered it, Calculated Risk is an outstanding blog that tracks the economy with a particular focus on the housing market. He has very good balanced judgement.
Stuart,
ReplyDeleteAs I look at the IMF data, I think might want to add the last year or 6 months, as it shows a recovery to about 4% world growth. Chart 1.11 http://www.imf.org/external/pubs/ft/weo/2010/01/index.htm#ch1fig