World economic growth metrics? (was Re: [extropy-chat] Theemergence of AI)

[Technotranscendence]

On Sunday, December 05, 2004 9:34 AM Robin Hanson rhanson at gmu.edu wrote:
>>>Economic growth is the fully recursive
>>> self-improvement of the world economy
>>> as a whole.
>>
>>... does it actually make sense to speak of
>> a single world economy as something that
>> has a growth that can be meaningfully
>> measured?  It seems to me that currently
>> the world is not a homogeneous system
>> under a single set of laws.

That'd apply within nation states as well.  For instance, in the US,
State and local laws vary.  In some sense, it's arbitrary to speak of
one national economy instead of a world economy or a patchwork of local
economies.

>> This means that many of the transactions
>> that take place between persons (both
>> natural and legal) on the planet do so on
>> a basis that is anything but fully voluntary
>> for many people.
>
> All the usual growth metrics can work on the
> world level as well as the national level.

As far as they work at all, yes.

> The involuntary nature of transactions can
> complicate estimates of the value people
> place on the goods transacted (ick, what a
> verb), but don't make them impossible.  The
> core idea is to see what stuff (goods and
> services) people have, and use their trades
> and other choices to estimate the value they
> place on that stuff.

Have you heard of "The Magnificent Progress Achieved by Capitalism: Is
the Evidence Incontrovertible?" by Hendrik Van den Berg?  It's in _The
Journal of Ayn Rand Studies_ 5(2).  For more on that journal, see:

http://www.aynrandstudies.com

Anyhow, Van der Berg introduces another way of measuring overall
individual welfare that might prove helpful in this discussion.
(Actually, he's building on the work of Frank Lichtenberg.)  This is
AILI, Average Individual Lifetime Income.  It's derived by looking at
the average income and the average life expectancy.  E.g., a society
where the average person earns $20K per year during his or her whole
life and, on average, can expect to live to be 100 yields an AILI of
$2M.  He thinks this is a better rough measure of average individual
welfare than other current measures.  He also makes suggestions for fine
tuning it in the article.

In terms of growth, one could look at changes in the AILI over time.

Cheers!

Dan
http://uweb.superlink.net/neptune/MyWorksBySubject.html