Deaton,s Fair Measure of Economic values.

Posted by Willard Anderson on October 25th, 2015.

Standard Measures of Economy 2015 OCT 25
Angus Deaton ‘s Nobel prize for a new economics model has been a long time coming. Economy has largely been measured by the dollar which had no standard measure. It was variably worth $35. to the ounce of gold and later $1900.
Other related dollars may be worth 60 cents US or $1.05 cents US. It was strictly an imaginary convention unlike temperature measured at the boiling point of water, it didn’t matter whether that space was divided into 100 degrees or 212 degrees. But without a measure anything could be placed under the system at any value one wanted to put it. For example fish had no value but fishermen and boats had a value. Forests had no value but the logging equipment, sales staff and government foresters had a value.
One could say that a dollar is worth the average amount of oatmeal it took to keep an average person alive for 24 hours and one would have a hard standard. For Deaton to say economics’ foundation must be upon “evidence based measure” is quite the step. Secondly he said the “average is not good enough.” One must cost the item dealt with as a mass or value of rarity or because of its functional importance in a series I would presume. Third “any theory should tally with the data.” That would rule out a lot of foolishness and misguided harvest and sales we accept today.
For example a few years ago a Japanese trawler was hauling in its catch. The jelly fish in the net weighed so much the trawler swamped. Jelly fish are exploding in population band because the predators, sharks, have been over harvested for shark fin soup and because of supposed nuisance. Jelly fish also will do better in a higher acidified ocean with lower oxygen levels (Mitchell – Seasick and Roberts -Ocean of Life) as in the Precambrian seas. Who pays the costs?
Similarly the Atlantic cod were fished out because they had no value and therefore no reason to save them. It was presumed the cod would be in the way of oil drilling and now the oil, fossil fuels consumption has caused climate warming and extreme weather events that have caused $ trillions in damage. But the fossil fuel companies have not paid for costs of: storms, disease, floods, droughts and deaths they have caused because there is no requirement for “the theory to tally with data”, and there are no particular measures. Destruction and about one million deaths per year have raised costs up to about one trillion dollars. It is surprising that the cigarette companies had to pay for the cancers they caused, why not the fossil fuel companies? The statistical connections are similar.
We may still be able to save the planet in the Paris meeting in Dec. unless the oil companies impose a hate mail campaign which in Canada is illegal and which also falsely increases the value of fossil fuels.

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