Is Growth Good?
Gary Flomenhoft
VT Law School
June 10, 2005
Human Welfare Index and GDP
y = 17.117Ln(x) - 101.27
R2 = 0.8012
HWI vs GDP/CAP PPP
90
80
70
60
HWI
50
40
30
20
10
0
$0
$5,000
$10,000
$15,000
$20,000
GDP-CAP PPP
$25,000
$30,000
$35,000
$40,000
UN Human Development Index and GDP
HDI v GDP/CAP PPP
120
y = 14.792Ln(x) - 55.199
R2 = 0.8663
100
HDI
80
60
40
20
0
$0
$5,000
$10,000
$15,000
$20,000
GDP/CAP PPP
$25,000
$30,000
$35,000
$40,000
Life Satisfaction and Happiness vs. GDP
Put amount needed to be happy here.
GPI Factors
I. Crime & Family Breakdown
(legal fees, medical expenses, damage to property, crime and divorce.)
II. Household & Volunteer Work
III. Income Distribution
IV. Resource Depletion
(Wetlands, farmland, and nonrenewable minerals (including oil) )
V. Pollution
VI. Long-Term Environmental Damage
VII. Changes in Leisure Time
VIII. Defensive Expenditures
(Medical and repair bills from automobile accidents, commuting costs, and
household expenditures on pollution control devices such as water filters.)
IX. Lifespan of Consumer Durables & Public Infrastructure
X. Dependence on Foreign Assets
GPI by Column
Column
Column
Column
Column
Column
Column
Column
Column
Column
Column
Column
Column
Column
Column
Column
Column
Column
Column
Column
Column
Column
Column
Column
Column
Column
Column
A: Personal Consumption Expenditures
B: Income Distribution
C: Personal Consumption Adjusted for Income Inequality
D: Value of Household Labor
E: Value of Volunt eer Work
F: Servic es of Household Capital
G: Services High ways and Street
H: Cost of Crime
I: Cost of Family Breakdown
J: Loss of Leisure Time
K: Cost of Underemployment
L: Cost of Consumer Durables
M: Cost of Commuting
N: Cost of Household Pollution Abatement
O: Cost of Automobile Accidents
P: Cost of Water Pollution
Q: Cost of Air Pollution
R: Cost of Noise Pollution
S: Loss of Wetlands
T: Loss of Farmland
U: Depletion of Nonrenewable Resources
V: Long-Term Environmental Damage
W: Cost of Ozone Depletion
X: Loss of Forest Cover
Y: Net Capital Inv estment
Z: Net Foreign Lending and Borrowing
“When to Stop” Rule
Total Utility and Marginal Utility of Growth
Total
utility
Marginal
utility
Full World or Empty World?
Source:
Ecological
Economics
Principles &
Applications,
Farley and
Daly
ESA Listings and GDP
1400
$10
1200
$9
1000
$8
800
$7
600
$6
400
$5
R2 = 98.4
200
0
1973
$4
$3
1980
1990
2001
Source: The Wildlife Society Technical Review 2003-1.
If World consumption = US: Need 4 more planets
Source:
Center for
A New
American
Dream
Grow out of poverty?
Poverty rate vs. GDP per Capita (1996$)
$35,000
20%
18%
$30,000
16%
$25,000
14%
$20,000
12%
$15,000
10%
per capita GDP (1996$)
poverty rate
01
2
0
99
9
97
1
9
95
1
1
9
93
1
9
91
1
9
89
1
9
87
1
9
85
1
9
83
1
9
81
9
79
1
9
77
1
9
75
1
1
9
73
1
9
71
1
9
69
1
9
67
1
9
65
1
9
63
9
1
9
1
9
1
61
8%
59
$10,000
Real Wages and productivity 1948-2002
Hourly Real wages (2002$) and Labor Productivity
$18.00
$16.00
$14.00
$12.00
$10.00
$8.00
$6.00
$4.00
$2.00
19
47
$0.00
Fundamental
Human Needs
Being
(qualities)
Having
(things)
Doing
(actions)
Interacting
(settings)
Subsistence
physical and
mental health
food, shelter
work
feed, clothe,
rest, work
living environment,
social setting
Protection
care,
adaptability
autonomy
social security,
health systems,
work
co-operate,
plan, take care
of, help
social environment,
dwelling
Affection
respect, sense
of humour,
generosity,
sensuality
friendships,
family,
relationships
with nature
share, take care of,
make love, express
emotions
privacy,
intimate spaces
of togetherness
Understanding
critical
capacity,
curiosity, intuition
literature,
teachers, policies
educational
analyse, study,meditate
investigate,
schools, families
universities,
communities,
Participation
receptiveness,
dedication,
sense of humour
responsibilities,
duties, work,
rights
cooperate,
dissent, express
opinions
associations,
parties, churches,
neighbourhoods
Leisure
imagination,
tranquillity
spontaneity
games, parties,
peace of mind
day-dream,
remember,
relax, have fun
landscapes,
intimate spaces,
places to be alone
Creation
imagination,
boldness,
inventiveness,
curiosity
abilities, skills,
work,
techniques
invent, build,
design, work,
compose,
interpret
spaces for
expression,
workshops,
audiences
Identity
sense of
belonging, selfesteem,
consistency
language,
religions, work,
customs,
values, norms
get to know
oneself, grow,
commit oneself
places one
belongs to,
everyday
settings
Freedom
autonomy,
passion, self-esteem,
open-mindedness
equal rights
dissent, choose,
run risks, develop
awareness
anywhere