Wildwell wrote:Think about what makes money: Sports, acting, inventions, music, art, writing, lawyers, and consultants - all relatively low energy activities.
Then read the entire thread.
rather than re-reading the entire thread, i think it's time to go back to the basics here.
what is GDP?
Gross Domestic
Productnot money,
product, which includes goods and services.
specifically, the sum of all goods and services (both final and internediate) produced within a particular economy, usually within a given year.
GDP is one way of measuring economic output. there are others.
GDP is usually measured in one of the following units:
1. local currency (real or nominal)
2. US dollars (real or nominal)
3. purchasing power parity (usually expressed as PPP US$)
but economic output is not money. money is merely an arbitrary measurement of that output.
some things are produced in an economy and they are not measured within GDP. why? for the convenience of econometricians and their statistical models based on data series.
so, to your example (from another thread):
Wildwell wrote:An easy example, If all the women in the world decided to charge $10,000 for sex each time overnight, banks could lend men money on the basis there is a supply of women AND charge interest increasing the money supply and debt for no additional energy requirement compared to the previous night, just a change in arrangement.
in this example, the "output" that has always existed in the economy suddenly appears in the GDP statistics, where before, as far as GDP is concerned, this never existed.
transferring some good or service from being non-monetized to monetized does not actually add to GDP, because GDP is supposed to be the sum of all goods and services produced already. all it does is make it "visible" to the statisticians who feed the GDP number crunchers their raw data. so you could interpret this as just making the model more accurate since no actual change in GDP has occurred.
the same goes for the "black market" economy of undeclared trading.
so back to the original arguments:
does economic growth require growth in energy input?
YES. in the long term. because economic growth means more goods and services are being produced.
can't produce them without more energy.
even in the medium term if you make everything in the economy more energy efficient (highly unlikely) you will get to a point in the long run where your efficiency gains are swallowed up and overtaken by your growth. logical?
efficiency gains cannot go on forever, neither can econimic growth in a finite planet.
does GDP have a linear relationship with energy demand?
i would say probably yes.
over the long run (30 years plus).
but you see the way the econometricians measure GDP has changed significantly over the last 50 years and what gets included and what doesn't is an arbitrary choice for their convenience.
so you get all sorts of distortions and cannot take every bit of detail as gospel. the GDP figures are based on a statistical "model" of the real economy. and it is measured in money.
when MonteQuest and Aaron talk about economic growth, i interpret it to mean actual increase in output produced. not changes in the methods of measurement.
Energy will decline due to depleting fossil fuels and GDP will hit record highs! We will have warp drive, nanobots, zero point energy and space mirrors within 10 years!!! But we don’t even need all of those technologies! We just need really smart people to think. As we have read, thoughts will run the economy. Really smart people will come up with technology that will never need to be built! We don’t need to build it, because we can have less energy with increasing GDP!
