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Comment by empiricus | Hacker News Reader

Maybe a growing pie is not perfect, but it is greatly preferable to a shrinking one. For a simple example, take a company that looses some contracts and stops growing; you get new conflicts or old ones become critical, ppl start leaving, etc. As long as the pie is growing, it can hide or solve by default many existing problems which would be very difficult or costly to fix otherwise.

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> As long as the pie is growing, it can hide or solve by default many existing problems

I think one issue with this analogy, is that companies have central points of authority but Western economies don't so much. For example GDP growth doesn't magically fix rising homelessness, and in the absence of central authority it becomes very difficult to address. People often don't like the idea that their "taxpayers money" is being spent on other people that aren't (currently) working.

>For example GDP growth doesn't magically fix rising homelessness

Nothing magically fixes homelessness, but GDP correlates well with a host of public benefits, including "poverty reduction and per capita income growth performances are correlated" [1]. All these correlations can be more accurately detailed by searching google scholar.

In the US, it seems homelessness has decreased greatly since it was first investigated in the 1860s as people moved to cities. During the GD in 1930, there were about 2M homeless against a total population of 120M people, and now it's around 500k against a population of 320M.

I'd suspect that GDP rise over those periods helped reduce homelessness quite a bit by providing more resources per capita to address it.

[1] https://www.kiwiblog.co.nz/2011/02/gdp_correlations.html

Isn't this a prime example of correlation, not causation?

Given that GDP/capita is not only correlated but causually related to many wellness factors in society, it much more likely not simply a correlation. These connections are well studied - check through google scholar is you really want to dig into it.

More GDP/capita means more resources to fight things like homelessness.

Obviously more GDP means more resources, the question is whether it solves issues like homelessness "by default" as suggested by the OP I responded to. My opinion is that it greatly depends on the dominant cultural narratives of the general public and of the ruling party.

In the UK we've seen fairly reasonable GDP growth in the last decade but have also seen a large overall increase in statutory homelessness acceptances over the same period [0]. That's just the official records: the Crisis charity estimates that the number of "hidden homeless" single adults has according to government estimates increased by a third over roughly the same period [1]. The reasons for this are generally given to be the lack of affordable housing being built, and welfare reforms such as capping the housing allowance.

The cultural narratives in play here are that a prolonged austerity was required in order to salvage the economy, and that our welfare is subject to significant levels of stress from deliberate "benefit cheats" or "welfare mummies". Both of these are contentious, as far as I've been able to gather.

[0] https://researchbriefings.parliament.uk/ResearchBriefing/Sum...

[1] https://www.london.gov.uk/sites/default/files/london_assembl...

Homelessness has been increasing rapidly in recent years across North America even while GDP growth has been adequate. You actually need to devote resources to fight homelessness.

>Homelessness has been increasing rapidly in recent years across North America even while GDP growth has been adequate

I don't think that's true. For example, in the US, dept of urban housing has this [1], which shows total number of homeless decreasing despite total underlying population increasing.

[1] https://en.wikipedia.org/wiki/Homelessness_in_the_United_Sta...

As you can see the number is going up. I would also be careful with the HUD data as it is based on a yearly count conducted of shelters in January [1]. Counting homeless people is tricky as only 10% are on the street and the methods used to estimate populations are fairly unsophisticated.

From the same surveys it's fairly clear in recent years homeless populations are rising if you look at exhibit 2.5 on page 25. [2]. Worse transitional housing is being replaced with shelter beds meaning those who are homeless are more likely to stay so.

I also should be clear looking big picture like this misses details. Things like Los Angeles's homeless population increasing by 16% [3] and a 5% rise in Seattle [4] and similarly Vancouver [5]. All of these cities have great GDP growth. Experts across the political spectrum are fairly consistent that the cause is related to affordable housing.

Now I can't make you change your mind about something you want to believe, but when you really engage with what's going on suggesting causality between GDP and homelessness is a very shallow superficial analysis. I think the data makes a pretty clear of what's going on. I'd encourage you no matter what position you choose to take to really engage with the details.

1. https://www.washingtonpost.com/business/2019/09/18/surprisin...

2. https://files.hudexchange.info/resources/documents/2018-AHAR...

3. https://www.latimes.com/local/lanow/la-me-ln-homeless-count-...

4. https://www.city-journal.org/seattle-homelessness

5. https://www.vancourier.com/news/vancouver-s-record-breaking-...

Is growing pie sustainable?

Why wouldn't it be? Humans have infinite wants and needs. These change overtime in terms of taste/perception as well. So the counter point should be made as to how this isn't the case and that a "growing pie" is actually against human nature.

It's the compound interest problem. If you keep compounding growth, like growing GDP at 1-2% a year, within some few thousand years you've grown bigger than all the resources within a sphere the same number of light years in radius. So clearly, growth is not sustainable and must eventually slow down until it approaches zero.

To be clear, we're far away from that today. But the parent is mathematically correct, the best kind of correct.

But why should growth of the growing GDP should be the target? I don't think that anyone believes that the GDP growth can increase every year. But you can reasonably assume that it can grow every year

I think his point is that, for example, a flat 2% yearly GDP growth is a yearly increase in absolute growth due to compounding, and most economists absolutely do believe that's possible somewhat indefinitely (with significant historical basis for that belief).

> If you keep compounding growth, like growing GDP at 1-2% a year, within some few thousand years you've grown bigger than all the resources within a sphere the same number of light years in radius.

Would be super interested to see your math. What are the inputs and equation that get you to these specific outputs (a few thousand years, all resources, a few thousand light years)?

If the Pharoah Tutankhamen had invested the equivalent of $1, and earned a real rate of return of 1%, today's value of that investment would be more than $350 trillion, which is a quantity larger than Credit Suisse's estimate of "global net worth".

The calculation isn't so simple -- a lot of growth is efficiency growth: getting a lot more out of the resources you're using. Switching all energy production to nuclear, for example, would lower resource usage while drastically raising GDP.

>like growing GDP at 1-2% a year, within some few thousand years you've grown bigger than all the resources

Increased GDP does not require consuming more resources. Using them more efficiently adds significantly to GDP, so this argument doesn't provide a rationale to claim infinite GDP growth is impossible.

A good example is many advanced economies have increased per capita GDP significantly while lowering per capita energy consumption at the same time (and lowering many other per capita material consumption areas).

Uh, more notable incorrect persons have noted this argument. You’re using what’s called a Malthusian argument.

Anyhow, let’s say everything you say is correct for today’s wants and needs. But if it is true that society changes and needs change etc, then your argument doesn’t hold for tomorrow.

Suppose for a moment there is only 10 years worth of X left, who is to say that one of these things doesn’t happen:

* X thing is no longer needed because Y thing is no longer in fashion

* X thing gets replaced by other comparable Z material

... and this goes on forever.

That’s the point.

A lot of people nitpicking at the argument here, about resource substitutions, efficiency improvements, etc.

So let's simplify this argument a little. It's not possible to have infinite growth in a finite universe. By definition infinity > not infinity for arbitrarily large values of not infinity.

Therefore the limit of growth as time approaches infinity is 0.

At some point you reach the physical limit of the system and exponential growth ends. This is true even for digital systems if the digital good involves some physical resource like energy, storage space, bandwidth, etc.

For example, if we keep growing energy usage at the historical rate of 3% a year, we would cook ourselves with the waste heat within 400 years. It doesn't matter where the energy comes from. Now we can get around that by moving off the earth, which buys time, but eventually, also in short order, we'd use all the available energy from our star. We could get around that through nuclear energy sources or widening the area to encompass more stars. But there is only so much matter and energy in the universe. Eventually the show stops.

I challenge you to find a theoretical counter example.

> At some point you reach the physical limit of the system and exponential growth ends. This is true even for digital systems if the digital good involves some physical resource like energy, storage space, bandwidth, etc.

At some point well before that, the sun will go red giant and swallow earth, so that's sort of beside the point. In the meantime, if we continue to fuel GDP growth via inefficient use of non-renewable natural resources, we'll have big problems far sooner than any astrophysical limit sets in.

You are assuming that increased resource consumption always is tied to increased GDP. Others have argued that once GDP hits a threshold, both incremental and total resource consumption decreases.

For example, a richer economy might replace physical goods with digital goods which have higher value and lower resource demand.

[1] Check out Andrew McAfee on More from Less

I think that's a temporary setback only. It's a one time thing to replace your resource intensive good with a more efficient one. But that doesn't give you growth forever, because any level of exponential growth with any level of resource consumption can't be reconciled with a finite universe.

Sooner or later all exponential growth must end. That includes all forms of compound growth, such as GDP increasing at any percent you want year after year.

>because any level of exponential growth with any level of resource consumption can't be reconciled with a finite universe.

I think you misread my post. Real world growth with negative or zero resource consumption can be reconciled with a finite universe.

On a mathematical level, there is no reason that GDP can not go infinite in a finite universe as GDP does not need material inputs.

Maybe I was being too generous to your post. There is no way to decouple GDP from material inputs, even if, as with digital good and services the inputs are quite small. They're still there, which means they're still finite, which means GDP is finite.

So perhaps the issue is that there are two cases being conflated.

In the practical sense, there is ample room for GDP growth on Earth in the immediate future. A huge portion of the population is underdeveloped while only a fraction of the world's natural resources have been extracted. Data also suggests GDP in developed economies can be increased while total resource consumption decreases once areas reach.

If someone is going to make a hypothetical mathematical/universal scale argument, I think it worth pointing out that GDP is accounting construct, with no inherent tie to material reality. For example two people could sell each other arbitrary services, (eg silence), and charge arbitrary sums.

> Is growing pie sustainable?

Humans are encountering the limits of connection and communication. This means that even if the pie grows in the aggregate, we're going to fracture.

Are you Mark Zuckerberg?

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