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I don't know, I read the interview and it honestly wasn't clear what he was saying. He never mentions any particular policy that should be enacted (other than tariffs against other countries that don't follow our lead), and the interviewer doesn't seem interested, opting instead to ask questions about cosmology. It's a bizarre interview. His issue seems to be mostly with overconsumption of resources. But instead of creating a sustainable economy that can achieve growth through other areas (increased efficiency, increased use of renewable resources), he instead comes out against any growth and advocates a steady-state economy. But again, no specifics, just vague generalities and digressions into cosmology (arguing that economics should take into account religious questions).

I was honestly shocked by the low quality of the interview. If this was presented as an exchange between teenagers on Reddit, I would have believed it.

This kind of topic is where podcasts shine, especially if the host is literate on the topic being discussed. Or even the raw transcript of this interview versus the content that ended up being published.

I would be curious how population and demographic changes play into his model of a steady state economy.

I do share your gripes with the interviewer. However, I think that Daly’s questions regarding the ultimate end (meaning purpose) of economic growth are worth pondering. Basically what are we trying to achieve through economic growth? Growth for the purpose of growth is kind of meaningless. But if growth is for improving welfare, why isn’t that the focus, rather than GDP numbers? (And if it isn’t for welfare, what is it for?)

That being said, the interviewer then asking “what’s the meaning of life” was really pointless and unnecessarily edgy. I also agree that not trying to come up with any policy proposal is kind of intellectually lazy and has some strong “I’m just the idea guy” vibes.

I definitely agree that it's worth thinking about things like scarcity, our ultimate goals, what kind of societies we're creating, etc., and that an over focus on GDP growth or personal wealth is a problem. I've often talked about how much of our GDP is wasted on things that have a net negative value for society (but a positive value for GDP).

The issues I have with Daly's approach, though, is in placing the blame on growth and acting as if a steady-state economy is the answer. Even if we froze the economy today, we'd still be emitting too much CO2 and we'd still be wasting tons of time and resources on things that have a net negative value on society. Being simply opposed to growth doesn't solve the real issues. It just unnecessarily alienates people who would otherwise be willing to address the actual problems, and also places you in opposition to good forms of growth that don't cause these problems (and may help solve them).

And while I think it's important to think about the big questions, I don't think it should the focus of economists. The role of economists isn't to decide what our values and goals are, it's to give us an insight into how we can best pursue them after we decide those values and goals ourselves.

He's saying that growth (GDP) is an absolute measure that is only a sum without any costs. As one economist I can't recall put it "the hero of GDP is a cancer patient going through a costly divorce". GDP measures economic activity, with no consideration of the benefit obtained from that activity.

The interview was pretty bad, I agree. It's not clear what a "steady state economy" would look like, or what measures are held steady.

Is cancer treatment not a benefit? And I guess some people regard a divorce (even a costly one) as a benefit, or they wouldn't do it.

Economic activity is an indication for benefit for people. I see no need to make a distinction between economic activity and a benefit obtained from that activity.

This is a reductive definition of benefit.

A rise in cancer treatments is probably not a good thing, all else equal.

It's a red flag when there are adjectives such as pioneering in the title

I'm not sure increases in efficiency result in increased GDP.

To make that as clear as possible - imagine someone created low priced robots tomorrow that could make all your food, entertain you, build you a house etc etc for the one time fee of $100. They were incredibly efficient, consuming $10 worth of energy every year.

GDP would fall off a cliff.

Idk, it seems like one of those things that is hard to predict. Would gdp actually fall off a cliff? There would be a lot of steps that would have to happen along the way. Plus the premise isn’t really rooted in any kind of reality, so it may be a flawed argument to begin with. Just my $0.02

Yes, it's hard to predict. Efficiency may or may not add to GDP. Which does point to how stupid it is.

And what would people now do with all their free time?

They'd start to build other stuff. GDP would probably go through the roof, because if you measure the value of all that stuff in "old dollars" it would be incredible. And now in "new dollars" it's a tiny amount, but it also frees up human labor to do all sorts of new stuff, and these "new dollars" are so much more valuable.

Money is a tricky social constructed phenomenon. When there's such a shocking big change to technology as you propose, there has to be something to account for the difference in what it can purchase.

All this other stuff is, by current calculations, sub optimal. So all this other stuff would likely add to less than current GDP. And since current GDP has been replaced by 10's of dollars, total GDP would likely be much lower.

But, if your point is that it's not clear then yes, but that's my point.

But what is a dollar worth now? A dollar can buy an incredible amount of stuff compared to just before the invention of the technology.

GDP accounts for the change in the value of a dollar. So your setup is obscuring what it would mean for GDP.

People aren't buying much of anything in my scenario. The robot does everything you need. No transactions required. GDP only counts transactions.

Maybe consider this, sort of the opposite of my fantasy robot - GDP may well rise if the air got so polluted we had to buy fresh oxygen. An entire industry would exist, transactions would occur. Drugs might exist to cure sickness from the dirty air. Or consider cigarettes - a nice addition to GDP numbers.

If you are saying there are weaknesses to measuring GDP, sure, it's kind of a crappy measure. A terrible one. But still a useful one. All models are wrong, etc etc etc. I certainly don't fetishize GDP or assume that people only spend money on positive things for themselves or others.

But in your second scenario, the pollution of the air would have been a big drop in GDP, a ton of negative externalities that were not counted. And improving the air would be of value.

The most convincing flaw about GDP and trade, to me, is about real labor, productive value to society, that has or has not been captured by GDP. For example, child care. Child care by a stay at home parent is not captured by GDP, but child care that is paid for is a massive expense, one that many families can not afford at all. So that is uncompensated labor that should probably be included as part of our GDP. Child care is being produced, but not in exchange with others.

But if we invented magic robots that did everything an individual needed, I don't think that would reduce trade much. We would still be interacting with each other, buying each others' art, trading living locations, etc.

How would the air pollution cause a drop in GDP?? GDP measures all end user sales of goods & services. It isn't some general idea of good and bad. Fresh air currently adds zero to GDP, there is no market. Dirty air would create a market.

Agreed, except in the current economy they would always go with the highest pricing they can get away with. Capitalism promised “efficiency” with regard to use of resources by always throwing a market mechanism at a problem and assuming the best. In reality, companies realized they could profit a lot more if rules were written in their favour and buying lobbyists/politicians was a bargain. So what “the markets” found was a way to maximise externalities to keep as much profit for themselves as they could (like always). And sadly this obsession for growth and wealth will lead to so much suffering due to all those externalities, especially related to the acceleration the stable climate breakdown.

This is true if the change could happen overnight, but in reality that is never what happens. It will take a considerable amount of time to reach this end state where robots are cheap and plentiful. How this will start out is with limited production with high profits on the robots that is eroded over time as production capacity comes online and a stock of robots is built up. This will give the displaced labor time to adjust/pursue other jobs/create new industries to employ the freed up labor. This is why GDP has never fallen off a cliff solely because of technological improvement (and indeed has so far eventually increased with technological improvement).

A surprising amount of modern thought falls victim to the trap of only looking at the shock size and not accounting for the likely adjustment duration (I'm especially looking at you environmentalists talking about sea level rise over a century).

Yep, it's a crazy hypothetical. It's perhaps a bad attempt to show that efficiency and GDP aren't the same thing. GDP is simply measuring transactions by end users.

well, to be clear, I'm saying it is only true that efficiency gains don't cause higher GDP under very stringent scenarios that broadly have not happened. while GDP and efficiency aren't the same thing, they are extremely highly correlated with a bit of a lag. The situations where people thought GDP will fall and stay down with a technological change have so far been completely wrong because the calamity comes from assuming something is instantaneous that can't be instantaneous and it is a very common thought process error these days.

I don't think this is knowable. Efficiency can result in various things - less labor required, higher quality goods and services for the same cost, more convenience, less uncertainty (and probably others i can't think of off hand).

Your claim has been true for labor to this point. Not sure it's a given going forward.

Goods and services have gotten better in a way which isn't captured by GDP because the price for the good/service hasn't gone up.

efficiency results in one thing: more stuff for the same cost as before (or put another way the same stuff as before for less money).

And yes, this is definitely knowable because the one thing efficiency results in causes a wealth effect for all consumers (and/or a wealth effect for capital owners to the extent they can capture the gains from efficiency vs having them competed away causing lower prices and a wealth effect for consumers) and a negative income effect on the subset of workers no longer needed because of the efficiency gain. For an efficiency gain to not cause a GDP increase eventually the income effect has to swamp the wealth effect for all time, which has never happened and is unlikely to happen any time soon, as there are no signs of any abatement in consumption demand that would cause a wealth effect to not cause a consumption increase (this is especially true given the incremental nature of efficiency improvement implementation over time primarily because of various productive limitations on adopting new tech. The more time people have to grow into a higher consumption state the more likely and easier it happens.)

This is a repeat of the same claim regarding labor.

And even then there are holes in this position. Efficiency often won't lead to a wealth effect. In many industries (Buffett highlights textiles frequently, but it's also true of agriculture, many consumer electronics, cars) the competitive dynamic is such that increasing efficiency just lets the company stand still. Cars and TVs for example have become significantly better over 40 years(not all due to efficiency, but a good amount) and the prices haven't much changed, due to competition. The companies in question are still earning low returns on capital despite their efforts. I don't feel richer because my $600 TV is 60 inches v 30 inches, and I don't go spend more money because of it.

GDP has holes like this. It's literally just measuring end user transactions.

I think betting on efficiency is essentially the same fallacy that he identifies in the article - that the future will solve the problems we create today.

There’s also the mental exercise one can take of can we make GDP -> inf in a constrained system. Of course not. There are limits. Economics assumes no limits on growth. That’s absurd on the surface. Just like I can’t super saturate sugar into a water solution beyond a certain point, I can’t materially transform the material provided by the earth into useful economic production irrespective of the earths limits. That seems pretty much vacuously true.

Hence his point.

> Things like automation, while highly efficient, result in most of the gains going to capital owners.

More goes to society. You don't see it because it is spread thinly. Think of how nice it is to have a microwave, for example. The value of my time saved is far more valuable to me than what I paid for the microwave.

Everything you and I buy we buy because the value of what we are buying is worth more to us than the money we give up to pay for it.

> How society should deal with this is another interesting question.

As I showed, society is getting the long end of the stick already.

> More goes to society. You don't see it because it is spread thinly. Think of how nice it is to have a microwave, for example. The value of my time saved is far more valuable to me than what I paid for the microwave.

This was the promise. But all we really have today is cost disease. For every microwave the US also has infrastructural costs that are 10x+ that of other countries and a culture that is being increasingly incentivized to hand over their wealth for short-term, materialistic gains, and goods/services that aren't worth the price being charged.

To say nothing of the fact that in most cases, said microwaves leaves you with lower-quality results concomitant with the time you saved. Which really feels like all of life; we are being sold a bill of plenty that is only paper-thin

Do you own a microwave? I bet you do. I bet if it broke you'd buy another one, because you'll find it worth the money. Ditto for your other appliances, like your dishwasher, stove, oven, vacuum cleaner, toilet, shower, phone, etc.

Don't forget the computer you bought to access HackerNews with!

My point is that those things are a red herring. The people peddling this shit peddle a narrative of increased efficiency, better life, and so on, focusing us on these little incremental improvements, while they pillage other parts of the world to bring you these things.

And you very clearly overestimate the need for a microwave. A gas oven, range, or BBQ produces considerably better results for many things for only a 2x or 3x investment of time and effort. I have several friends that have opted not to own a microwave.

Hell, large parts of the world don't have a microwave and they're fine. There's a good chance they are even building our microwaves for us. You know, I would rather we focus our efforts on lifting them up so that they can have their own microwaves and other nice things before I stand in line to buy yet another microwave, because it was made so poorly by microwave makers that cheap out on microwave building.

Do you believe a microwave involves more pillaging than a gas oven?

Let's say a modern oven isn't available. Just a word burning one. Operating one is an all day amount of work (there's little that's romantic about it). They're dangerous, filthy, and the smoke damages your lungs. If people switched to wood ovens the rest of the world's forests would be pillaged (stripped) of all wood. A wood burning stove has a lot of iron in it, that requires an enormous amount of energy to smelt.

BTW, you should know that gas appliances are a major source of indoor air pollution. Microwaves aren't.

Also, I usually get 10 years out of a microwave. Not bad for an appliance. If you want to save the environment, they sell them in thrift stores for $10-20.

Considering that said microwave uses a lot more electronics than said oven and lasts 1/3 to 1/5 as long as one (per your own observations), between the energy consumption (because you are almost certainly not getting your energy from renewable sources) and the increasingly large bill of materials (with the microwave requiring many more exotics) averaged out over total lifespan, I would bet that a microwave and a gas oven are quite competitive over the long-term.

But the microwave is producing more waste as it isn't built to last as long, and the items you cook in it are probably wrapped in chemical-seeping plastic and printed cardboard. So the volume of waste with use is considerably higher as well.

And I'm not even considering electric ovens, which are becoming increasingly mandated.

Electric ovens have a lot more material in them, and use a great deal more energy to heat your food.

Consider also that microwaves are considerably cheaper than gas or electric ovens, which is a strong clue that they are also much less costly and polluting to manufacture.

I own a microwave, well not really, the apartment im renting comes with one and in all the years I’ve been here I did not use it even once. If it broke I wouldn’t miss it, I’d probably use the space it occupies more efficiently.

Im inferring the point op was making was the price we pay for all these shortcuts and modern lifestyle should make us think well what is essential and do away with the rest.

Using your stove is far more environmentally costly than the microwave.

You may be absolutely right in terms of efficiency but it’s tangent to what op’s point was about.

>>Things like automation, while highly efficient, result in most of the gains going to capital owners.

That is not true. When you exclude housing, capital's share of national income has slightly decreased over the last century (see Figure 3):

https://www.brookings.edu/wp-content/uploads/2016/07/2015a_r...

Non-housing capital grows primarily through greater automation.

How are self driving cars growth drivers? What do they enable?