Productivity Growth in a Post-Growth Society

In Robert Solow‘s (in)famous growth model, perhaps the most important part was what is now called the “Solow residual” or “Total Factor Productivity” (TFP)–the part of economic growth that cannot be explained by changes in the input of the factors “capital” and “labour”, which is, in effect, the result of technological progress. In other words, TFP is a reflection of us learning how to produce more with the same amount of input. A recurrent theme in this blog is that quantitative GDP growth is highly problematic, mainly due to the related pressures on natural ecosystems. However, even if we decide to stop growing–or, better, to stop focusing on growth–, it is not obvious that we can actually achieve it. And TFP is one of the reasons why this isn’t as simple as many in the degrowth movement seem to believe. Continue reading

A plea to our leaders

One of the (implicit) messages of my blog is that to achieve sustainability, we have first to figure out what we want as a society. The open letter below is a call for just that.

Halt and Reflect

Whether you are a national leader, a journalist, an engaged religious person, or a school headmaster – this letter is directed to all of you who have a special voice in your community.

As global citizens and scholars, we urge the world’s societal leaders, at all scales, to instigate discussions on the simple question: “What is it that we value?”

We are a group of scholars with formal academic training. Many (though not all) of us would consider themselves “next generation scientists” – that is, many of us will be senior academics in the not too distant future. A minority of us already work in senior academic positions.

Traditionally, many people chose science as a career path because they were interested in how the world works. Many insights have now been obtained on this. Young people still enter scholarly training because they want to understand the world – but increasingly…

View original post 670 more words

A Basic Income Research Programme

It is a great vision, particularly popular among the political Left: that the citizen could enjoy the freedom of doing with his life whatever she wants. Work, make arts or devote oneself to family or the community. Of course, basic income would not bring with itself the total freedom, but it would make the unconstrained choice of one’s way of living much easier. So far the assumptions, at least. It would be interesting to know, however, whether and–if yes–how this idea can become reality. For so far the vision of basic income is not much more than that–a vision. A beautiful one, but largely lacking an empirical and scientific basis. Continue reading

The Case for A-Growth, Not De-Growth

It is always a very nice feeling when you find thoughts similar to yours in an influential publication. Once upon a time, some 1 1/2 years ago, I published here a text entitled Stop Debating Growth and Focus on What Is Important (yeah, I admit that titles are not quite a strength of mine). Today I read a paper by Jeroen van den Bergh, published two years ago in the Ecological Economics journal, entitled Environment versus growth — A criticism of “degrowth” and a plea for “a-growth”. To my pleasure, his credo is very similar to what I wanted to emphasize in the Stop Debating text. Continue reading

Economic Possibilities for Keynes’s Grandchildren

83 years ago John Maynard Keynes, the great economist of the first half of the 20th century, wrote a short essay entitled Economic Possibilities of Our Grandchildren. Even though the word and the very discipline of futurology had not been invented yet at that time, this is exactly what Keynes engaged in. He wrote down in the essay what he thought the world would look like around 100 years later. Although there are still some 15 years left, I guess it is fair enough to assume that no great, revolutionary changes in societal or economic affairs will take place until 2030. Let us therefore take a look at Keynes’s vision, for we can learn a lot from it about our own time.

Continue reading

Entitlements: Why Income-Based Measures of Poverty Are Not Enough

In this blog, I repeatedly criticized the use of income-based indicators of well-being in rich countries. Probably the most important reason why their use is inappropriate is the so-called Easterlin paradox, viz. the fact that people seem not to become happier as they become richer in absolute terms (above a certain threshold level). In measuring the well-being of poor people or societies, income seems to be of much more merit. However, here also there are reasons to be sceptical. One of the main problems has been identified by Amartya Sen, who stressed that income (or, more generally, command over commodities) alone does not generate well-being if the individual in question lacks entitlements. Continue reading