Living Standards

Lean Logic makes a distinction between “nominal” and “real” living standards. Nominal living standards tend to be measured in terms of monetary income and productivity. Real living standards are not. For example, feeling safe in our homes counts as a positive aspect of real living standards, but security gates and electronic systems bought in order to feel safe do not. They are (at best) regrettable necessities. The transport that has brought these tomatoes to my table is a regrettable necessity, but no one would claim that the transport itself improved the quality of the tomatoes.

Nonetheless, such intermediate goods—the things a household needs to buy, directly or indirectly, in order to enjoy the things it wants—do tend to get counted-in to measures of living standards, and they shouldn’t. They are a positive contribution to Gross Domestic Product (GDP), but they are only repairs to, and compensations for, the intensification needed by a super-large economy, all of which GDP faithfully measures.

In other words, real living standards cannot be measured in money. When, or if, the informal economy of the future is well-developed, real living standards will be high, though purchases of goods and services will be low. GDP will be history.L201


Related entries:

Well-Being, Dollar-a-Day Fallacy.

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David Fleming
Dr David Fleming (2 January 1940 – 29 November 2010) was a cultural historian and economist, based in London, England. He was among the first to reveal the possibility of peak oil's approach and invented the influential TEQs scheme, designed to address this and climate change. He was also a pioneer of post-growth economics, and a significant figure in the development of the UK Green Party, the Transition Towns movement and the New Economics Foundation, as well as a Chairman of the Soil Association. His wide-ranging independent analysis culminated in two critically acclaimed books, 'Lean Logic' and 'Surviving the Future', published posthumously in 2016. These in turn inspired the 2020 launches of both BAFTA-winning director Peter Armstrong's feature film about Fleming's perspective and legacy - 'The Sequel: What Will Follow Our Troubled Civilisation?' - and Sterling College's unique 'Surviving the Future: Conversations for Our Time' online courses. For more information on all of the above, including Lean Logic, click the little globe below!

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