The Implications of High Living Standards

Didn’t say I was.

That is true only in the short term if not combined with a sea change in the way that resources are used and the environment polluted. Affluence is derived from resources and pollution. An affluent couple has less children, but their family has a much greater negative impact on the world than the average larger family of a poor couple. That way leads to doom, and then most everyone will be below today’s poverty line, no longer affluent, and the problem has not been solved but rather worsened.

Being poor in money but rich in health is not a problem to me.

If today's poor are made significantly more affluent such that the global median moves to the US level, say, then we are doomed, for their gain comes at the expense of the environment, which is already in dire shape.

The long-term solution imo is to equalize the world at an average affluence level that is much less than the first world has now, or, better, to reduce the population through attrition to, say, 1 billion.

 

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No, you have stated,

I too subscribe the Economist magazine but I have yet to find what you stated here. However, the magazine does mention about the decline of Russian population. In specific, the September 30th, 2004 issue of the Economist Magazine, a writer stated this:

Perhaps, indeed. Perhpas.

As I clearly indicated, the figures are 'projected'. As much as you project that we might not exist a couple of more centuries, the UN projected the figures by supposing that we exist.

If you are using my math, you should get an increase in Chinese population between 2005 and 2050 provided that you abide by the figures presented in the source - not to mention, by the general mathematical logic, too.

I used a calculator to come up with the number; unless my calculator is broken, my calculations cannot be impotent. The figures suggested in the source do take into considerations of both population declining factors and that of increasing factors. As a result, the population in China in 2050 happens to be greater than that of 2005.

Trends are measured by hard figures. We can quantify phenomena via hard figures, and call them trends. Trends without figures/data are called myths, etc.

In economics, trends are measured within the frame of projected periods, and those periods are discursively derived yet specifically indicated. If you have traded before, you know how investers use the word trend: viz., 'short-term-trend'; 'medium-term-trend'; 'long-term-trend'; etc. They all have specific durations of time by which the value of trend is determined.

In other words, like mountain climbing, you have to occasionally descend in order to ascend. Unless you are specific about the duration of time period by which treands are measured, your argument would not withstand as it should. If a short-term-trend says downward, while a long-term-trend says upward, which trend are you to abide by?
best,

 

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I don't think he understands what we are saying........ :/

 

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Didn’t say I was.

Not in so many words:

You as a liberal here are essentially saying that you have rectified the two ideologies, I mean since you want to improve the world, and your prescription is tellingly Malthusian, I say you did imply you were at least.

That is true only in the short term if not combined with a sea change in the way that resources are used and the environment polluted. Affluence is derived from resources and pollution.

I understand this position and it has its merits, but again an increase in the international standard of living with the world going to median GDP this problem will be eliminated because like the word median implies, it’s the average. Right now the world can support an $8,500 per capita economy without many problems. We have enough land, and with increases in technology and in this century the possible exploitation of space we have far to go. Sorry but I am not so pessimistic.

An affluent couple has less children, but their family has a much greater negative impact on the world than the average larger family of a poor couple.

Politically they don’t, having millions of destitute, and desperate people creates the crap we live in today. If the capitalist world is able to co-opt these people by “delivering the goods” then we could have a much better world.

Being poor in money but rich in health is not a problem to me.

It’s the problem, which I don’t think you got…look at a country like Iran about half if not more of its population is under 20! Why? Because the population is generally healthy but economically its not. These countries are now stuck in this area of development Iran, Brazil, India, and others have growing populations and since they aren’t able to achieve first world status because of their huge populations, the population only grows further…it’s a deadly cycle. So think again…

If today's poor are made significantly more affluent such that the global median moves to the US level, say, then we are doomed, for their gain comes at the expense of the environment, which is already in dire shape.

Don’t be hyperbolic no one here is so stupid as to suggest that American levels of consumption are desiarable or even going to happen, what I suggest is that we go down to the levels of what the world as one nation can support, I suspect the reason why you and others are attacking me on this is because you believe I am saying that everyone can have American standards of living…that’s crazy, and stupid.

The long-term solution imo is to equalize the world at an average affluence level that is much less than the first world has now, or, better, to reduce the population through attrition to, say, 1 billion.

Exactly what I have been saying all along…why the debate?

 

I too subscribe the Economist magazine but I have yet to find what you stated here. However, the magazine does mention about the decline of Russian population.

I don’t have the article on me right now but it said to the effect that by 2075 Russia’s population should be half of what it is now, which is believable around 70-75 million people, let’s not draw this out to ridiculous proportions, either you believe me or you don’t it really doesn’t matter.

If you are using my math, you should get an increase in Chinese population between 2005 and 2050 provided that you abide by the figures presented in the source - not to mention, by the general mathematical logic, too.

Unfortunately I am not using your math, I am going under the presumption that eventually China’s population will peak and then decrease, that is what I meant by population decrease, and you must even admit that with those figures it is not unconceivable that China could very well go below 2005 population levels post-2050.

I used a calculator to come up with the number; unless my calculator is broken, my calculations cannot be impotent

The math was sound, the logic wasn’t.

Trends are measured by hard figures. We can quantify phenomena via hard figures, and call them trends. Trends without figures/data are called myths, etc.

Well current trends seem to suggest…read above. So again all I care about is general trends not so much gross figures.

'short-term-trend'; 'medium-term-trend'; 'long-term-trend'; etc. They all have specific durations of time by which the value of trend is determined.

They are usually described not by time but rather by factors by which a firm can change its factors of production.

If a short-term-trend says downward, while a long-term-trend says upward, which trend are you to abide by?

Basically a long term trend is one which can be reversed, a short term cannot.

 

But you also stated:

If you are consistent in your argument, people can understand you better. Now, are you using my math or not?

Gross figures and trends are not mutually exclusive. In fact, their relationship is dialectically related. According to the source I provided in the previous post, current trends are derived from hard figures/gross figures (http://www.worldbank.org/depweb/english/modules/social/pgr/index.html) - otherwise I would not have said that "the bigger picture is that the world population as a whole is indeed increasing while its rate is decreasing."

Negative, factors of productions (viz., land, labour, capital and enterprise) are esscential neccesities in production/input. While trends are general directions of economy which are described/determined in terms of time/durations (e.g., product cycle). Please see the last 3 pages of the Economist magazine - trends, as well as general directions of market, can be conjectured from those pages; and they all are classified in terms of time/duration. Not to mention, factors of productions themselves are classified in terms of time/duration in those pages.
best,

 

If you are consistent in your argument, people can understand you better. Now, are you using my math or not?

I don’t see the inconsistently, your math was coherent; the logic behind your assertion that China’s population will not decline is what I have problems with. Your base year is 2005, mine is when China reaches a peak, and then a population decrease. I never doubted your math.

Gross figures and trends are not mutually exclusive.

Obviously not, they are dependant on each other, if not the trends are dependant on the gross figures. What I am saying is that I don’t really care if China’s population is x, what I care about the rate of growth of that population.

While trends are general directions of economy which are described/determined in terms of time/durations (e.g., product cycle).

Real GDP rotates around potential sure of course, but the actual increase in a countries economy really comes with an increase in potential GDP, those figures in the last pages of the economist show the short run fluctuations around potential GDP.

they all are classified in terms of time/duration.

Oh no question, they are measuring flows in the economy but again it’s a short term trend.

Not to mention, factors of productions themselves are classified in terms of time/duration in those pages.


The only one I can think of right now is labour.

 

When I look up “Malthusian”, like on Wikipedia, I don’t see anything incompatible with liberal thought. I’m no expert on the subject though.

Maybe. Consider that people will eat the same number of calories regardless of their per-capita income, as long as it’s above some minimum. At the present caloric intake we’re wiping out species at a fast pace. With more money people will eat more meat. There are solutions but that’s where the sea change in mentality comes in. For example, everyone becoming vegetarian might work.

If my health were guaranteed then I’d need not work. I’d have all day to play and could have the highest quality life. That’s why it’s not a problem to me. In reality health is not guaranteed so people work to maintain their health. If they were overworked they would not be healthy, so they are not overworked and all is good. I don't believe that people need much money to limit their children to avoid overpopulation. The solutions given on the web site above do not require much money per capita.

I did think that’s what you were saying. I didn't equate your “rich” description with something less than an American standard of living; that’s how I got confused.

I guess no reason!

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Well.... to invest you need to save, and savings is by far not a good alternative. If you have ever studied economics, you should know that many third world countries have tried to save and it didn't work. Savings just doesn't work because the households are non-Ricardian.
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No. Saving doesn't work because it stagnates the economy. Ever heard of the "thrift paradox"? Not only that, but if you earn $100 per month, pay 60% of taxes and on top of that save, what money are you going to use to pay for education, food, shelter.......? The problem is that a greater marginal propensity to save in third world countries would only starve people.

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Only now they are starting to consume? Well, I don't think so. High living standards imply increased consumption! That is basically the definition of high living standards.

I thought it was consumption that would drive the GDP higher.....? :bugeye:
What is your definition of high standard of living?

30s and 40s of what? Of the GDP? Sounds like a slippery slope.

Well, say whatever you want. It sounds like you are not quite seeing the big picture.

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However, that does not imply that they don't consume themselves. China, all by itself, already has about 200 million people with standards of living as high as US middle class.
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You just proved what I said. Americans can't afford a lot right now, can they? Even if they keep importing for China, they won't keep up with it. Of course, that means higher consumption for the chinese. So, yes... the chinese middle class is starting to consume as much as the american one.

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Yes, China has as many middle class citizens as two thirds of the entire US population! Now that is unsustainable....
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You didn't quite prove me wrong, here....

And...
China's middle-class income:
http://www.chinanews.cn/news/2004/2005-01-20/1161.shtml

http://en.ce.cn/Life/social/200501/20/t20050120_2902843.shtml
http://en.ce.cn/Life/social/200411/06/t20041106_2205755.shtml


As I said, most chinese are poor with slave wages. However, by 2020, the middle-class (defined as above) will represent 45% of the population, which is the fact that I'm pointing out. 45% of the population is about 500 million people. To reach 250 million, we can estimate that it will take less than 10 years.

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Yep. What about a non-capitalist economy?
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Yeah, sort of. Although capitalism seem to most often create an elite which holds by far the greatest amount of money....

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Besides, the problem is excessive consumption, not just consumption.
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I know. That is one of the things I have pointed out. And I'm also pointing out that the chinese will be consuming much more, and the planet won't be able to sustain us anymore.

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Ah. So the rest of the world starve and it is the world's fault?
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Do you understand that the resources that were in those poor nations are taken by the US? How do you think the US can get the resources to produce? Magic?

If you were the CEO of a big multinational corporation, what would be your greatest concern: the well being of your employees, or decreasing costs, so that you can maximize profit?

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Nope. Technology is the primary factor in development:
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Education causes technology and it is also a result of better technology. But the point is that technology is the key. Education is only one of the factors that induce technological advancement.

Well, actually, economic growth causes inflation, structural unemployment and it harms the environment. Of course, there are good things to it, but there are also the bad things. What about all the people that got unemployed when machines started being used, in the industrial revolution?

Renewable resources would actually cause deflation and it would preserve the ambient. The only difficulty with it is that it would cause more structural unemployment. This is one of the main concerns that I have with it....

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What causes economic growth is development in technology, the Solow residual.
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Potential GDP, NOT Real GDP. If the labour force grows by itself, even though GDP goes up, GDP per capita goes down. Of course, if labour, capital and human capital all go up at the same time, and in the same measure, than we have a growth in Real GDP. But that is tricky. Technology is the most significant factor in economic growth.

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Not at all. The economy described is an economy 100% run by technological development. That is why we cannot have that economy yet. We are not ready. But we must aim to it, otherwise we are doomed to become extinct in less than 100 years.
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It is "nonsense" because it doesn't exist yet. It is the economy of "nowhere"....

...Raphael Nonsensus........

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More on that later...

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Argentina doesn't have anything to do with this. Besides, I'm not quite familiar with the reasons why Argentina feel into a recession.
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I know what happened in Argentina, even if I'm not quite familiar with the reasons. Altough I have studied it before, I have to pretty much refresh my mind on that...

Oh, really? Too bad. I didn't get that impression from you. Although it seems you have a very mainstream focused view that is hardly ever expanded.

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Ha! Exactly! What you are not taking into account is the fact that the real prices worldwide has increased thanks to globalization!
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The governments? With which money? The money IMF steal from them?

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Not only that, but if you study economics, you will know that as the quantity supplied increases, price decreases.
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You are mixing microeconomics with macroeconomics. That, my friend, is a recipe for disaster.

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Do you see scarcity in US stores? No. But go to the middle of Africa and see what you can buy there!
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Yeah. The point is that scarcity is relative to the flow of capital, which is still going mostly to the US. Unfortunately, the governments of this planet are not smart or brave enough to stop sustaining the US and start distributing capital throughout the planet.

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Lower real prices in the US are a natural result of abundance of products in the US, and a consequent scarcity throughout the world.
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I would say the stupid president is a greater factor there. Remember that he decreased taxes not long ago....

Well, the shrinking dollar is a factor, because it makes it easier to import products from Asia....... Doesn't seem like it will last forever, tough. He is messing up with the economy.....

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They weren't high paying jobs. They were much lower than today.
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Yes. That's what I said in the article. Real wages were high because costs of living were low. You cannot look at wages without looking at inflation, interest rates and costs of living.

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The "trick" was that the costs of living were lower, because standards of living were low. That's the whole point of the article.
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Yes. But I was talking about the 50s and 60s.
I'm very much aware of the whole process of globalization. I clearly pointed out the problems that were generated since the 70s, with globalization.

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Ok. Please explain what you meant by "third stage of economic development"....
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Ok. That clarifies it.

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Do you understand the problems with monopolistic competition?
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Yep.

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Nope- 200 million. They not only represent a very small percentage of the population but they are also consuming as much as the US, which is precisely one of the main points of my article.
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Source?

http://www.unchina.org/about_china/html/poverty.shtml
http://www.unsiap.or.jp/participants_work/cos03_homepages/group6/china.htm

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That is all wonderful, but again, it is leading to excessive consumption, which will lead to scarce resources, extreme debts, bankrupt banks and an obvious world-wide recession.
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Yep, sure. The question is- what do we do after it happens?

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Eh? They are explained throughout the article!!!!
The resources go to the developed countries!
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Opening up to international capital wasn't what I point out. What I pointed out is that if resources are scarce and the developed countries are consuming more than 2/3 of the world's resources, representing about 5% of the world's population, it is obvious that the rest of the world will suffer from scarcity.

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I'm sure in the 60's, the Latin American governments were "corrupt" with the "red danger"....
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Nope. Latin America was raped by the US.

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Ha! And what does the US do!?!?
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...steal...

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Not at all! Brazil, for example, has a HUGE economy! 6% of GDP growth in 2004!
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Actually, primary goods are going down:
http://www.ibge.gov.br/english/presidencia/noticias/noticia_visualiza.php?id_noticia=304&id_pagina=1


Check out our Central Bank:
http://www.bcb.gov.br/?english

http://www4.bcb.gov.br/pec/ApPron/Apres/200501PRI-Brazil-Towards Sustainable Economic Growth.pdf
$33.7 billon trade surplus.....
About 2% of external contribution to growth...
6.7% of fixed capital investment in the third quarter of 2004....
6.1% of GDP growth in the third quarter of 2004...
About 25% Debt-to-GDP ratio.......

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Not to mention slave-wages- that is, being paid just enough to survive. Something that happens throughout the world. In fact, that's why most people are still poor. Because they are exploited and receive slave-wages.
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The problem is the multinational corporations. They are the ones that do this stuff.

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1) You have a family to sustain. You have to feed yourself. So you need to work. The only work you can possibly get pays you just enough to survive. What do you do? Is that a "voluntary" action?
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Which choice? Between staying in the rural farms where they don't make much, not to mention that they don't have much political voice! So than you say that they are not slaves, that they could just stay there and not try to get a better life in the city- something that people rarely accomplish? They don't really have many options, you know? And not having opportunity is a form of slavery.

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2) Slaves were never paid. However, they were fed just enough to survive. The same principle works here. But instead of feeding them, the corporations give them just enough money to survive- to get fed.
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Sure! But do the multinationals in power want that? Ahh.... noooooo.

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Try living in a country where you can barely feed yourself. Not to mention the big corporations getting all the money from you....
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Well, the government does try to help us, from the rest that we get after we pay the IMF......

 

Is this convincing enough, Undecided?

What about....

The world hunger problem: Facts, figures and statistics
from http://library.thinkquest.org/C002291/high/present/stats.htm

• In the Asian, African and Latin American countries, well over 500 million people are living in what the World Bank has called "absolute poverty"
  
• Every year 15 million children die of hunger
  
• For the price of one missile, a school full of hungry children could eat lunch every day for 5 years
  [*]Throughout the 1990's more than 100 million children will die from illness and starvation. Those 100 million deaths could be prevented for the price of ten Stealth bombers, or what the world spends on its military in two days!
  
• The World Health Organization estimates that one-third of the world is well-fed, one-third is under-fed one-third is starving- Since you've entered this site at least 200 people have died of starvation. Over 4 million will die this year.
  
• One in twelve people worldwide is malnourished, including 160 million children under the age of 5. United Nations Food and Agriculture
  
• The Indian subcontinent has nearly half the world's hungry people. Africa and the rest of Asia together have approximately 40%, and the remaining hungry people are found in Latin America and other parts of the world. Hunger in Global Economy
  
• Nearly one in four people, 1.3 billion - a majority of humanity - live on less than $1 per day, while the world's 358 billionaires have assets exceeding the combined annual incomes of countries with 45 percent of the world's people. UNICEF
  
• 3 billion people in the world today struggle to survive on US$2/day.
  
• In 1994 the Urban Institute in Washington DC estimated that one out of 6 elderly people in the U.S. has an inadequate diet.
  
• In the U.S. hunger and race are related. In 1991 46% of African-American children were chronically hungry, and 40% of Latino children were chronically hungry compared to 16% of white children.
  
• The infant mortality rate is closely linked to inadequate nutrition among pregnant women. The U.S. ranks 23rd among industrial nations in infant mortality. African-American infants die at nearly twice the rate of white infants.
  
• One out of every eight children under the age of twelve in the U.S. goes to bed hungry every night.
  
• Half of all children under five years of age in South Asia and one third of those in sub-Saharan Africa are malnourished.
  
• In 1997 alone, the lives of at least 300,000 young children were saved by vitamin A supplementation programmes in developing countries.
  
• Malnutrition is implicated in more than half of all child deaths worldwide - a proportion unmatched by any infectious disease since the Black Death
  
• About 183 million children weigh less than they should for their age
  
• To satisfy the world's sanitation and food requirements would cost only US$13 billion- what the people of the United States and the European Union spend on perfume each year.
  
• The assets of the world's three richest men are more than the combined GNP of all the least developed countries on the planet.
  
• Every 3.6 seconds someone dies of hunger
  
• It is estimated that some 800 million people in the world suffer from hunger and malnutrition, about 100 times as many as those who actually die from it each year.

Statistics on Poverty and Inequality
By Jeff Gates
May 1999
From http://www.globalpolicy.org/socecon/inequal/gates99.htm

• The United Nations Development Program (UNDP) reported in 1998 that the world's 225 richest people now have a combined wealth of $1 trillion. That's equal to the combined annual income of the world's 2.5 billion poorests people.
  
• The wealth of the three most well-to-do individuals now exceeds the combined GDP of the 48 least developed countries.
  
• While global GNP grew 40 percent between 1970 and 1985 (suggesting widening prosperity), the number of poor grew by 17 percent.
  
• Although 200 million people saw their incomes fall between 1965 and 1980, more than 1 billion people experienced a drop from 1980 to 1993.
  
• In sub-Saharan Africa, twenty nations remain below their per capita incomes of two decades ago while among Latin American and Caribbean countries, eighteen are below their per capita incomes of ten years ago.
  
• UNDP reported in 1996 that 100 countries were worse off than 15 years ago.
  
• Three decades ago, the people in well-to-do countries were 30 times better off than those in countries where the poorest 20 percent of the world's people live. By 1998, this gap had widened to 82 times (up from 61 times since 1996).
  
• In 1998, that 20 percent of the world's people living in the highest-income countries accounted for 86 percent of total private consumption expenditures while the poorest 20 percent accounted for only 1.3 percent. That's down from 2.3 percent three decades ago.
  
• At present, 3 billion people live on less than $2 per day while 1.3 billion get by on less than $1 per day. Seventy percent of those living on less than $1 per day are women. With global population expanding 80 million per year, World Bank President James D. Wolfensohn cautions that, unless we address "the challenge of inclusion," 30 years hence we will have 5 billion people living on less than $2 per day.
  
• Two billion people worldwide now suffer from anemia, including 55 million in industrial countries. Given current trends in population growth and prosperity-hoarding, three decades from now we could have a world in which 3.7 billion people are anemic.
  
• These related phenomena led UN development experts to observe that the world is heading toward "grotesque inequalities," concluding: "Development that perpetuates today's inequalities is neither sustainable nor worth sustaining."
  
• UNDP calculates that an annual 4 percent levy on the world's 225 most well-to-do people (average 1998 wealth: $4.5 billion) would suffice to provide the following essentials for all those in developing countries: adequate food, safe water and sanitation, basic education, basic health care and reproductive health care. At present, 160 of those individuals live in OECD countries; 60 reside in the United States.
  
• As of 1995 (the latest figures available), Federal Reserve research found that the wealth of the top one percent of Americans is greater than that of the bottom 95 percent. Three years earlier, the Fed's Survey of Consumer Finance found that the top one percent had wealth greater than the bottom 90 percent.
  
• From 1983-1995 only the top five percent of households saw an increase in their net worth while only the top 20 percent experienced an increase in their income.
  
• Wealth projections through 1997 suggest that 86 percent of stock market gains between 1989 and 1997 went to the top ten percent of households while 42 percent went to the most well-to-do one percent.
  
• Stock market participation is broad but remarkably shallow. Though more American adults own stocks and stock mutual funds than at any time in history, 71 percent of households own no shares at all or hold less than $2,000, including mutual funds and popular 401(k) plans.
  
• Adjusting for inflation, the net worth of the median American household fell 10 percent between 1989 and 1997, declining from $54,600 to $49,900. The net worth of the top one percent is now 2.4 times the combined wealth of the poorest 80 percent.
  
• The modest net worth of white families is 8 times that of African-Americans and 12 times that of Hispanics. The median financial wealth of African-Americans (net worth less home equity) is $200 (one percent of the $18,000 for whites) while that of Hispanics is zero.
  
• Between 1983 and 1995, the bottom 40 percent of households lost 80 percent of their net worth. The middle fifth lost 11 percent. By 1995, 18.5 percent of households had zero or negative net worth (an average -$5,600, down from -$3,000 in 1983).
  
• By 1995, the middle quintile of income-earners had only enough savings to maintain their current standard of living for 1.2 months (i.e., if they lost their jobs). That's down from 3.6 months in 1989.
  
• Household debt as a percentage of personal income rose from 58 percent in 1973 to an estimated 85 percent in 1997.
  
• In 1997, 1.4 million Americans filed for personal bankruptcy. That works out to roughly 7,000 bankruptcies per hour, 8 hours a day, 5 days a week.
  
• Though average household income rose 10 percent between 1979 and 1994, 97 percent of that gain was claimed by the most well-to-do 20 percent.
  
• In 1998, weekly wages were 12 percent lower than in 1973 on an inflation-adjusted basis. Productivity rose 33 percent over that perioo. Had pay kept pace with productivity, the average hourly wage would now be $18.10, rather than $12.77. That translates into a difference in annual pay of $11,000 for a full-time, year-round worker.
  
• Between 1970 and 1990, the typical American worked an additional 163 hours per year. That's equivalent to adding an additional month of work per year - for the same or less pay.
  
• In 1996, the Census Bureau reported record-level inequality, with the top fifth of U.S. households claiming 48.2 percent of national income while the bottom fifth gets by on 3.6 percent.
  
• In 1973, the income of the top 20 percent of American families was 7.5 times that of the bottom 20 percent. By 1996, it was 13 times.
  
• Business Week reports that in 1999 top executives earned 419 times the average wage of a blue-collar worker, up from 326:1 in 1998. In 1980, the ratio was 42:1.
  
• In 1982, inclusion on the Forbes 400 list of richest Americans required personal wealth of $91million. The list then included 13 billionaires. By 1998, $500 million was required and the list included 189 billionaires. Note, however, that Forbes 1998 figures were based on a September 1, 1998 Dow-Jones Industrial Average of 7827. The Dow topped 10,000 in early 1999.
  
• The combined net worth of the Forbes 400 was $738 billion on September 1, 1998. That's up from $624 billion in 1997. That's an average one-year increase of $285 million per person. That works out to $780,000 per day or $32,500 per hour ($541 per second).
  
• Microsoft CEO Bill Gates has more wealth than the bottom 45 percent of American households combined.
  
• Spending on luxury goods grew by 21 percent from 1995 to 1996 while overall merchandise sales grew only 5 percent.

 

Maybe. Consider that people will eat the same number of calories regardless of their per-capita income, as long as it’s above some minimum. At the present caloric intake we’re wiping out species at a fast pace. With more money people will eat more meat. There are solutions but that’s where the sea change in mentality comes in. For example, everyone becoming vegetarian might work.

Actually I read a ethics paper on vegetarianism and that is the most UNETHICAL thing we can do, because its so good for us, and so bad for the environment (believe it or not), you see if everyone just ate greens, then the world would need even more space for agricultural cultivation, and we would see a growth in population that we never seen before. Eating meat allows us to moderate our food consumption, and population growth. Look at India…

If my health were guaranteed then I’d need not work. I’d have all day to play and could have the highest quality life.

Where does this lie come from? Yes you may be “healthy” but only because you have a job, and income. Do you think you would be healthy without food? There is no welfare system in these nations, you don’t get money u die, easy as that. Have you ever been to the third world country?

I don't believe that people need much money to limit their children to avoid overpopulation. The solutions given on the web site above do not require much money per capita.

What people need isn’t money that is true, what they need is success. They need to have a productive life, which in turn usually means higher incomes. People have to have an incentive to have fewer children, and one is to make more then what one needs to survive, not that much but more then mere consumption income, so their children can go to school and lead a better life.

 

No. Saving doesn't work because it stagnates the economy. Ever heard of the "thrift paradox"? Not only that, but if you earn $100 per month, pay 60% of taxes and on top of that save, what money are you going to use to pay for education, food, shelter.......? The problem is that a greater marginal propensity to save in third world countries would only starve people.

Then why hasn’t that happened in East Asia? They save up to 40% of their income and they are achieving amazing rates of economic growth? The reasoning is simple, if I save 30% of my income, and another 25% goes into investment, and 5% into reserves, and 40% into consumption we should have a good economy, as Asia has proven without a doubt. Third world nations imo cannot consume they don’t’ have enough of a middle class, or reserves to do so. What Third world nations have to do is save, and try to cut down on excessive consumption, which creates current account deficits, and debt. The government should not have income taxes in these nations, but rather sales taxes to try to make people save more then they consume and enforce the countries capital markets as stable.

I thought it was consumption that would drive the GDP higher.....?

Real GDP yes, but it always comes back down to potential GDP. You are getting confused here btwn short term economic growth and long term. An economy grows only as its factors of production grows, ala investment not consumption. A third world nation should depend on exports to eat up much of its production. Since tariffs are all but a dream in today’s world, third world states have to become much more forceful at the next Doha round, which I am confident with the leadership of Brazil, India, and China they will have a voice.

What is your definition of high standard of living?

Gradual increases in income, stable government, democracy, transparency, a social investment state, and neo-Keynesian economic models (i.e. Clinton).

30s and 40s of what? Of the GDP? Sounds like a slippery slope.

Re-read what I wrote it isn’t difficult to understand.

Well, say whatever you want. It sounds like you are not quite seeing the big picture.

I have to see the big picture, I am taking a course on this very subject on how markets affect society ok so don’t tell me I have no idea. The big picture is that as long as the poor have the possibility for social mobility, and increasing incomes things will get better.

You just proved what I said. Americans can't afford a lot right now, can they? Even if they keep importing for China, they won't keep up with it. Of course, that means higher consumption for the chinese. So, yes... the chinese middle class is starting to consume as much as the american one.

It is true Americans cannot keep up this pace of consumption its unnatural, and the Chinese and Japanese etc. will have to start to consume and invest less. But China does not have the economy large enough to consume as much as the US, a Chinese middle class is still poorer then a western middle class. You forget that middle class isn’t a monolithic meaning. Eventually I am sure China will begin to consume much more, when China is investing 50% of its GDP, and saving the other 30%, only 20% is left over to consume, which isn’t all that much, the United States consumes 70% of its GDP, invests 15%, and saves 15%, China’s economy would then have to be TOTALLY consumption based in order for it to be en par with American levels of consumption and we both know that’s ridiculous. So as you were saying?

You didn't quite prove me wrong, here....

That’s grand I did prove you wrong now be quiet. Stop being so superficial…please.

As I said, most chinese are poor with slave wages. However, by 2020, the middle-class (defined as above) will represent 45% of the population, which is the fact that I'm pointing out. 45% of the population is about 500 million people. To reach 250 million, we can estimate that it will take less than 10 years.

That is what I am saying as well; eventually China will get to that point what you are saying is right now. By 2025 China’s GDP per capita (real GDP) will be around $7,051, compared to a projected $52,450 for the United States. (I would surmise if the world economy doesn’t collapse). China will eventually be the world’s largest consumer of goods, and most of them will be produced in China anyways…

Yeah, sort of. Although capitalism seem to most often create an elite which holds by far the greatest amount of money....

Yes and that is the sad trade off, and it will always exist. I believe that the government has a duty to regulate that inequality with social services that benefit everyone, Canada does that well the US doesn’t and social cohesion in the United States isn’t that great.

I know. That is one of the things I have pointed out. And I'm also pointing out that the chinese will be consuming much more, and the planet won't be able to sustain us anymore.

Well I don’t remember u pointing this out before I pointed it out, but I digress. If globalization and capitalism had its way we would be getting poorer to redistribute the wealth to the rest of the world, and if borders didn’t exist then comparative advantage would be enforce, and a much more equal world. But we don’t have such luxuries. Now eventually the world economy as it is right now will not be able to sustain itself, as Marx pointed out. Realization will happen, capitalism has been too successful for its own good.

Do you understand that the resources that were in those poor nations are taken by the US? How do you think the US can get the resources to produce? Magic?

The US isn’t the only one, and in many nations the mineral and fossil fuel industries are nationalized. Again the problem mostly lies with the governments themselves, now to be sure there have been massive amounts of neo-imperialism by the United States, and Europe.

Education causes technology and it is also a result of better technology. But the point is that technology is the key. Education is only one of the factors that induce technological advancement.

It is the factor, without it there would be no economy and no technology. Which came first education or technology (and I’m not talking about stone tools)? If the third world has one obligation its to provide the best education it can, cut defence expenditures and make sure every child goes to school, and subsidize the best students in your system to get education in the West come back and build the economy.

Well, actually, economic growth causes inflation, structural unemployment and it harms the environment.

Real GDP economic growth yes, and many people think that that is economic growth imo its really not, its only a temporary rise.

Potential GDP, NOT Real GDP. If the labour force grows by itself, even though GDP goes up, GDP per capita goes down. Of course, if labour, capital and human capital all go up at the same time, and in the same measure, than we have a growth in Real GDP. But that is tricky. Technology is the most significant factor in economic growth.

Potential GDP imo is the only measure that really matters, and if Real GDP is in equilibrium with that measure then we have a good economy. Governments have been very short-sighted in the 3rd world, they focus on short run, real GDP fluctuations, what the East Asian nations did wisely was to focus on their potential GDP, and let that push up real GDP. Latin America is a good example of government mismanagement of national resources, instead of borrowing money, and going into deficit to increase investments they did it to increase consumption which by definition only exists when u consume, sure that will increase real GDP temporarily, and employment, but it will also inflation and in Latin America it was wild. The problem in Latin America is lack of investment, and too much consumption imo.

I know what happened in Argentina, even if I'm not quite familiar with the reasons. Altough I have studied it before, I have to pretty much refresh my mind on that...

Well go refresh, because it has EVERYTHING to do with this conversation, read my rant above this response you’d see why.

The governments? With which money? The money IMF steal from them?

Well good news:

http://www.abc.net.au/news/newsitems/200502/s1297034.htm
I hate the IMF just as much as the next guy with their market fundamentalist attitude, and hopefully new banks will replace it, like many regional banks.

You are mixing microeconomics with macroeconomics. That, my friend, is a recipe for disaster.

Well in macro the only reason why firms increase production is due to an increase in AD, and then that is offset by an increase in wages which brings back the economy to potential GDP, what decreases prices is increases in productivity, lower wages, and technology ala lower input prices, because as we know from micro as firms increase production they do so with diminishing returns.

Yeah. The point is that scarcity is relative to the flow of capital, which is still going mostly to the US. Unfortunately, the governments of this planet are not smart or brave enough to stop sustaining the US and start distributing capital throughout the planet.

Because they cannot this isn’t really a choice for governments, if they stop supporting the US economy there wouldn’t be an international economy as we know it. China’s economy would have billions of investment being idle, and revolutions and international disruptions could happen. Eventually if the Chinese and the gang keep on supporting the US until China and the BRIC countries trade more btwn themselves then with the US then maybe things will change, the rise of the 3rd world is happening.

Well, the shrinking dollar is a factor, because it makes it easier to import products from Asia....... Doesn't seem like it will last forever, tough. He is messing up with the economy.....

No in theory its supposed to make it harder to import products from outside the US, it’s a supposed to be a boost to domestic industry like what happened in Argentina after she got rid of her ridiculous peg.

Yes. That's what I said in the article. Real wages were high because costs of living were low. You cannot look at wages without looking at inflation, interest rates and costs of living.

Which have been low since the 70’s, inflation is not even close to being high, there is something more then mere inflation here I think it’s a actual decrease in wages over the years.


Yes. But I was talking about the 50s and 60s.
I'm very much aware of the whole process of globalization. I clearly pointed out the problems that were generated since the 70s, with globalization.

The 50’s and 60’s created the 70’s.

Source?

http://www.voanews.com/english/Archive/a-2004-03-26-6-China.cfm

Since China started opening its economy to the rest of the world a quarter century ago, about 400 million people have been lifted out of poverty.
Yep, sure. The question is- what do we do after it happens?

Try to get the Asians to spend their asses off.

Opening up to international capital wasn't what I point out. What I pointed out is that if resources are scarce and the developed countries are consuming more than 2/3 of the world's resources, representing about 5% of the world's population, it is obvious that the rest of the world will suffer from scarcity.

Well to be fair according to my calculations this is the consumption of world GDP btwn the 1st and rest world. The trend is that the BRIC countries with a few others are increasing their consumption of world GDP for instance take China:

Consumption of world GDP:
1975: 3.2
1980: 3.6
1985: 5.2
2000: 10.3
2004: 13.1
2025: 26.2

Resources are leaving the developed world in the 3rd world, for many reason but the trend is obvious.


Nope. Latin America was raped by the US.

Parts of it of course, but where I am from not really. Argentina and Uruguay didn’t have much to rape from. It was the policies of the governments that really didn’t help, and also neither did the green revolution. Remember that Argentina and Uruguay are the closest thing Latin America has to a first world country.

Actually, primary goods are going down:
http://www.ibge.gov.br/english/presidencia/noticias/noticia_visualiza.php?id_noticia=304&id_pagina=1

Yes which only proves that the increase in trade figures is due to an increase in prices.

$33.7 billon trade surplus.....
About 2% of external contribution to growth...
6.7% of fixed capital investment in the third quarter of 2004....
6.1% of GDP growth in the third quarter of 2004...
About 25% Debt-to-GDP ratio.......

Which is good news, I am not saying anything bad Brazil is becoming a much more sound economy which is good for Uruguay of course. But it still is saddled with a government fiscal deficit and high debt load, Brazil needs a sustained trade boom for more then 10 years to really get somewhere. I am happy about the growing relationship btwn China and Brazil which may well be a boon for both economies. The bad news for Brazil is that Brazilian industry will probably suffer.

The problem is the multinational corporations. They are the ones that do this stuff.

Because they can.

They don't really have many options, you know? And not having opportunity is a form of slavery.

But its better then what they had before, eventually things should get better companies know that increased productivity means treating your employees well.

Sure! But do the multinationals in power want that? Ahh.... noooooo.

But some members of the US congress do, and that’s where things get interesting.

Well, the government does try to help us, from the rest that we get after we pay the IMF......

To be fair to the IMF the countries became dependant on loans.