It is to giggle

According to George Monbiot we need a new type of economics:

But what Daly suggests is that nations which are already rich should replace growth - "more of the same stuff" - with development - "the same amount of better stuff". A steady-state economy has a constant stock of capital that is maintained by a rate of throughput no higher than the ecosystem can absorb. The use of resources is capped and the right to exploit them is auctioned. Poverty is addressed through the redistribution of wealth. The banks can lend only as much money as they possess.

Hmm, and here's Daly himself.

Slightly odd: they seem not to have noticed that banks never lend what they have. What they have is capital, and that's not leant, that's used to provide a cushion for what is leant. What is actually leant is the deposits, ie, our savings. That's actually what banks are for, to provide intermediation services, allow us to employ professionals to deploy our savings and to spread the risk of investments.

But it's the other part that is bizarre. They seem to be terribly confused about what GDP measures. It isn't, as they seem to think, an increase in resources used nor is it an increase in things made or used.

It's an increase in the value added in an economy. In which sense it's actually a measure of the efficiency of the use of resources, not a measure of the quantity.

Just as an example, the Soviet Union boasted of how much more coal and steel it produced than the US did: no one thinks that the SU had a higher GDP than the US do they?

I'm entirely happy for people to urge, even demand, a new economics. I'd just be interested if those doing so could understand the old first.

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