Comments on: What does 5% of global GDP mean? http://www.sindark.com/2009/07/01/what-does-5-of-global-gdp-mean/ Temporarily Torontonian Sun, 12 Feb 2012 08:01:40 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Byron Smith http://www.sindark.com/2009/07/01/what-does-5-of-global-gdp-mean/#comment-100881 Byron Smith Mon, 15 Nov 2010 12:58:26 +0000 http://www.sindark.com/?p=5843#comment-100881 The costing of climate change also doesn't (as far as I'm aware) factor in any of the second order geopolitical implications. What would the cost of a war over water between nuclear Pakistan and India be? Or the cost of China reasserting control over parts of Siberia? Or of millions more refugees from Mexico crossing the US border? How many of these are included in the 5% figure? The costing of climate change also doesn’t (as far as I’m aware) factor in any of the second order geopolitical implications. What would the cost of a war over water between nuclear Pakistan and India be? Or the cost of China reasserting control over parts of Siberia? Or of millions more refugees from Mexico crossing the US border? How many of these are included in the 5% figure?

]]> By: Milan http://www.sindark.com/2009/07/01/what-does-5-of-global-gdp-mean/#comment-79653 Milan Thu, 02 Jul 2009 13:57:24 +0000 http://www.sindark.com/?p=5843#comment-79653 When we are considering the 5% of GDP most likely to be wiped out by climate change, it seems probable that it will be the income of poor people. As such, it would likely increase rather than decrease inequality and (which is a lot more important) cause considerable harm to overall welfare. The people who will be worst off will probably be those who see their agriculture turn marginal, and who aren't welcome in any more productive areas. When we are considering the 5% of GDP most likely to be wiped out by climate change, it seems probable that it will be the income of poor people. As such, it would likely increase rather than decrease inequality and (which is a lot more important) cause considerable harm to overall welfare. The people who will be worst off will probably be those who see their agriculture turn marginal, and who aren’t welcome in any more productive areas.

]]> By: . http://www.sindark.com/2009/07/01/what-does-5-of-global-gdp-mean/#comment-79652 . Thu, 02 Jul 2009 13:55:10 +0000 http://www.sindark.com/?p=5843#comment-79652 <a href="http://www.sindark.com/2006/10/19/inequality-a-problem-in-itself/" rel="nofollow">Inequality a problem in itself?</a> * October 19, 2006 <a href="http://www.sindark.com/2007/01/25/executive-pay/" rel="nofollow">Executive pay</a> * January 25, 2007 <a href="http://www.sindark.com/2007/02/09/the-landlords-game/" rel="nofollow">The Landlord’s Game</a> * February 9, 2007 Inequality a problem in itself?
* October 19, 2006

Executive pay
* January 25, 2007

The Landlord’s Game
* February 9, 2007

]]> By: Tristan http://www.sindark.com/2009/07/01/what-does-5-of-global-gdp-mean/#comment-79651 Tristan Thu, 02 Jul 2009 13:17:35 +0000 http://www.sindark.com/?p=5843#comment-79651 It depends how you look at it. I would not be surprised if something like 5% of global GDP is consumed by less than 1% of the population. Reducing inequality could make this a non-problem. To put inequality in perspective, some fund managers made 350 million dollars in salary last year. How worse off would they and their clients be if they only made 1 million? I'd venture to say not very. The problem is basically the neutrality of a market economy with respect to orders of magnitude. Market incentives work basically the same in situations where wages are driven up to 350 million, or driven down to a few thousand a year. In both cases its just benefit and scarcity that determine what the market is willing to pay, right? But, this distribution totally fails at anything like maximizing benefit over all - the next dollar to someone making 350 million is likely worth a hundred or more times less than the next dollar to someone who can't feed their family. Talking about inequality is relevant here lest we assume that the 5% must somehow be paid by the poorest 81 countries, or by the poorest 5% of the population. Which, isn't a bad assumption considering there are certainly forces which would like to see it happen that way. It depends how you look at it. I would not be surprised if something like 5% of global GDP is consumed by less than 1% of the population. Reducing inequality could make this a non-problem.

To put inequality in perspective, some fund managers made 350 million dollars in salary last year. How worse off would they and their clients be if they only made 1 million? I’d venture to say not very.

The problem is basically the neutrality of a market economy with respect to orders of magnitude. Market incentives work basically the same in situations where wages are driven up to 350 million, or driven down to a few thousand a year. In both cases its just benefit and scarcity that determine what the market is willing to pay, right? But, this distribution totally fails at anything like maximizing benefit over all – the next dollar to someone making 350 million is likely worth a hundred or more times less than the next dollar to someone who can’t feed their family.

Talking about inequality is relevant here lest we assume that the 5% must somehow be paid by the poorest 81 countries, or by the poorest 5% of the population. Which, isn’t a bad assumption considering there are certainly forces which would like to see it happen that way.

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