Here's the gotcha question: In a fixed money supply world, what's the average GDP growth of all countries?
Discussion
-5% since 1971
0%
But output and standard of living still goes up, which are the more important metrics
How do you measure it?
If in the fixed money supply terms it has to be zero.
If in purchasing power, it might be positive, negative or zero.
No specialist here, but it can also grow.
Id the coin in my hand goes to you and than to me, ans this cycle repeats once per year, our Gpd is 1.
But if we do this 2 per year, our GDP is 2.
Compare this with the barter system (escambo).
We don't have the goal of trading money, but of trading goods.
If I get 1 kg of rice from my plant pee year to sell to you for 1 real, and you get 1 kg of beams, we can do this as often as you want, having only one real.
The "earth resources" plus our work is the real good being traded, not the paper
Probably negative.
Stop it. You make my brain hurt.
It's a stupid metric, probably would start focussing on the real metric that is: "proof of reserves" for each country.
Productive Energy Expenditure.
If we talk about the bitcoin network as underlying supply, one could measure a rate of change in energy used for securing the network.
Honest question: Why does this matter?
It cant exist ... because the edifice of prosperity is NOT based on how many yatchs (or gold bars or bitcoin ) you own .. it is on the fact that everyone could afford bread and clothes and a shelter .. commodities
In a fixed money supply situation - commodities go to zero .. no one will plough the fields becuase only scarce things attract value ... culture of scarcity .. NOT abundance ..
Even today - if you stop subsidies - do you think anyone will do farming :-)
Eventually - people will collectively agree to contribute (tax) to support the farmers and coal diggers and water systems and construction workers .. and then the whole story of perversion of fiat repeats ...
To answer your question - GDP shall fall to near zero .. till people realize they fucked themselves :-)
Imho aggregate deflation(inflation) metrics would be the best proxy for overall economic growth together with productivity measurements at the single good level.
Therefore the average economic growth basically will be a function of productivity increases, i.e. of technology improvements. How much on average? I don't know. In a hypothetical full-reserve banking system growth should be likely slower but much more stable, thanks to the end of the credit boom & bust cycle.
It's just my educated guess, maybe I'm wrong as shit. 🤷🏻♂️😂
GDP is the gotcha. it doesn't measure production, it measures surplus, which is convenient for all those countries that can abuse trade and labor dynamics.
this would be likely different in a fixed money world, but then continuing to think in terms of GDP doesn't make sense.
gotcha: gpd is a bullish keynesian measurement.