How can this be? The stock market is at an all time high. The financial sector reports that we have gotten richer at an exponential rate. All wealth indicators show a positive picture. They can't be wrong! There is no way!
Oh right, natural resources are still free, they aren't captured in any of those numbers. Pumping out oil and burning it increases the GDP but it also decreases the amount of oil that can be pumped out in equal proportion and it causes damage in the form of pollution. When you think about it, this is very close to a zero sum game, the only difference being the labor productivity gain through reducing how much labor we use. However, since resources are free, there is no incentive to improve resource productivity (also known as efficiency). We account for the benefits but not for the costs of what we are doing. This makes us look rich on paper and poor in reality.
Oh right, natural resources are still free, they aren't captured in any of those numbers. Pumping out oil and burning it increases the GDP but it also decreases the amount of oil that can be pumped out in equal proportion and it causes damage in the form of pollution. When you think about it, this is very close to a zero sum game, the only difference being the labor productivity gain through reducing how much labor we use. However, since resources are free, there is no incentive to improve resource productivity (also known as efficiency). We account for the benefits but not for the costs of what we are doing. This makes us look rich on paper and poor in reality.