End of an economic epoch
Sir, Kristin Vala Ragnarsdottir and her ASAP colleagues took a strangely superficial approach to the relationship between geology and economics (Beyond GDP, Geoscientist, October 2014). Having conceived the idea of Gross Domestic Product in 1934, Simon Kuznets (see reference below) went on to question its role when it came to unpaid labour and international development. Furthermore, his 1971 Nobel Prize speech throws up some fundamental questions about growth and unforeseen technological developments - including surprises, which may be positive or negative, such as the onset of anthropogenic global warming.
Simplistic graphs add little to this debate when logarithmic plots would have made it easier to comprehend levels of historic mineral production. Given the biggest economic collapse since the great depression, peak oil is a total irrelevance, when without carbon capture and storage even a slump in using hydrocarbons will prove highly dangerous. With the advent of digital technology and labour intensive services, GDP does not have to be linked to hydrocarbon intensity and depletion of natural resources. Though the authors are right to question growth which only results in growing inequality and dissatisfaction, this is not inevitable. Also it is clear from international marketing that life satisfaction depends partly on temperament. Following quantitative easing and unprecedented falls in oil prices during a period of international turmoil, we may be on the brink of another economic epoch
The Spirit Level is a deeply flawed book: none of the graphs have any population weighting, for plotting arbitrary straight line least squares fits. Nor did Wilkinson and Pickett state their exchange rates, when in any case many international comparisons should have been kept in terms of distribution of national income and wealth. Correlation does not necessarily prove causation, even if I have no doubt growing inequality is socially corrosive.
David Nowell, 2 Tudor Road, New Barnet, Herts EN5 5PA
W:http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1971/kuznets-or.html