painter yesterday, radiohead a few days ago. today ill go for something entirely different.
a few weeks ago somebody asked me to explain to the idea of a steady-state economy to them, i keep forgetting to do that. since he regularly reads here, hell probably in luck. and itll save us all a really longwinded 30 minute soliloquy, which is really ace. those are rarely ever any good. especially mine. tend to end in disgust with shaking of the head and waving of the arms.
you should also be aware that, since this is the economic system that I favor, were going to have some bias. ill make it a point to talk about criticisms, because there certainly are several.
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here goes nothing. im going to take this picture out as far as it goes-ill be making quite a few general statements about the world at large as it is today, and probably state some basic economic assumptions that may insult your intelligence. might put some pictures in. hey, thatll be nice of me.
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before i go any further i want to mention that developed/westernized countries are of course those with high gdp's, low inflation/good money supply, generally around 5% or lower unemployment, and those with high human development indicators. basically your G20 nations.
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the economic doctrine adhered to today by the vast majority of developed/westernized countries is usually referred to as mainstream economics, though you probably never hear that term. terms like 'socialism' and 'libertarianism' (right/left, republican, democrat) are at the core political descriptors used by politicians and certainly politicized economists (cough, paul krugman). most economists steer clear of partisan bickering and call it like it is. (myself not really being one of them, guilty...)
Let me define mainstream economics. essentially, its is a 50/50 split between your keynesian economics and the neoclassical style of economics. most countries practice a keynesian macroeconomic policy and neoclassical microeconomic policy.
macroeconomics deals with the economy on the whole, thats your big picture stuff, regulating the money supply (the fed setting interest rates), and most public sector/government polices. Basically it deals with questions of growth, ie. if growth is lacking, how do we create it, etc.
Microeconomics deals with the behavior of the individual in response to scarce resources, we kind of think about this within the supply/demand framework. Its essentially an individual's behavior to changes in the economy they are a part of.
basically.
Heres the key takeaway from all that-the vast majority of western/developed countries (particularly those ones that are stable), well they all utilize the same economic system. whether they be the so called socialized EU, the more command-like Asian countries, or us who, well... our system is incredibly convoluted and so diverse that nobody can agree on what hat it actually wears. <-this is basically a good thing. But the basic assumption of all these countries is that a 5% annual growth is what is sustainable and desirable.
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So lets put this in the context of 2008. Real steep recession, hasnt bottomed out yet, who knows when it will, or even if it will. you have to take action as a government to address the problem. hypothetically, if youre Japan you might cut interest rates, to promote consumer spending. if youre the usa you may invest in infrastructure, to temporarily replace private investment in capital. if youre the EU you may go about a program of job creation. Again this is hypothetical, in reality the response by countries was to utilize some degree of these three approaches, and more. No matter which approach taken the long run goal remained the same for each country. A return to a 5% level of growth in the economy. It may appear that countries are headed in opposite directions (socialism, liberalism, etc), but thats not really the case.
This may explain it better-Youre in columbia, trying to get to clemson.
--You can take I26-I385-I85. this has the highest speed, but longer mileage. so theres a tradeoff there. you may feel like youre getting there faster, but you really arent.
--You can take I26-Pelzer cutoff-I85, this has both high speed, but includes a short cut which saves distance, but forces a lower speed. Probably gets you to clemson faster than just taking interstates.
--You can go through Newberry-Greenwood-Anderson-Clemson, taking US76 and other back routes. This might take longer, but save a load on gas cause youre steady at 55mph the whole way.
Either way you go, youre still getting to clemson, and probably within a 30minute time frame. many of the routes even follow the same roads. the path you take is not really that different from another. anyway you go will have associated costs/benefits. but more importantly, you left from columbia and ended in clemson.
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pretend now that that the routes weve discussed are the ways to achieve 5% growth. heres the thing though, you really havent asked yourself a pretty central question. Do i really need to have 5%growth/be in clemson.
-heres where im abandoning this analogy, of course we have to be in clemson, were students,etc etc.
but we dont need 5% growth. In fact, we dont really need growth at all.
theres actually a really strong case to be made that, well, we dont need growth. ok yeah, in a way thats malthusian, but let me explain.
i gotta take a break though. pt 2 tomorrow.
in the meantime, ill do you another solid and elevate the bowerbirds, though im sure i have already.