The warning was delivered by economists and politicians after the Office for National Statistics revealed that the economy shrank by 1.5 per cent in the final three months of 2008 alone.
The contraction follows a 0.6 per cent fall in gross domestic product (GDP) — the most comprehensive measure of Britain’s wealth generation — during the previous three months. This means Britain fulfils the criteria for a technical recession — two successive quarters of negative output.
Missing the final word there. "Negative output growth".
We\’re really not in the territory where the country produced a negative amount of wealth in the last two quarters. Rather, that the amount of wealth produced (or to be more accurate, the value added in the economy) fell rather than grew.
We are currently (not) enjoying a boom in negative output: we’re anti-cars, anti-free trade, anti-personal freedom, anti-privacy, anti-responsibility, anti-justice, anti-incandescent lightbulbs (though merely as a sub-contractor to the EU) and more besides.
I’ve always wanted an anti-incandescent lightbulb. Much better than an eye mask or curtains…
I dunno Timmy, Gareth points out a lot of anti-output and the UK does seem to have the stupidest politicians in the known universe. Maybe the net is in fact negative.
Didn’t the USSR finally manage negative output in the end? Meaning that the value of the products it produced were actually less than the value of the raw materials used?
Fortunately for us, socialism is not that advanced in the UK, and maybe never will be.
It shows how bad things can get, though, doesn’t it?
Andrew:
Quite for the same reason (inability to calculate
economically) they couldn’t know if they were doing things properly, they also couldn’t be expected to know if they were doing otherwise.
We can surmise the latter, however, on the basis of final result. Actually, it probably didn’t hppen merely at the end but in some cumulative fashion ultimately leading to the end.
Didn’t the USSR finally manage negative output in the end? Meaning that the value of the products it produced were actually less than the value of the raw materials used?
That still isn’t negative output, as the raw materials only value is as output.
Tim adds: I’ve heard it said (by Richard Layard actually) that there was indeed one steel factory whose output was worth less than the raw materials (ie, not accounting at all for labour or capital) going in. But even in the USSR that was rare.
Yeah, but that’s to misunderstand GDP accounting. Unless the raw materials were all imported, their extraction would have been counted as ‘value added’. So the steel factory cannot do anything to them to make them ‘negative’, ie there’ll still be positive outpt at the end of the process.