Gross domestic product is a misleading measure of national success (2014)
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Re: Gross domestic product is a misleading measure of national success (2014)
#2"... and replace it with a metric which explicitly optimizes for all the policies I personally like."
Re: Gross domestic product is a misleading measure of national success (2014)
#3Needs (2014) in the title.
Re: Gross domestic product is a misleading measure of national success (2014)
#4Nobody makes any policy decisions based on GDP.
It's just a proxy of economic activity.
Nobody ever said, We (won't) need policy X because we are at Y GDP.
Companies make decision based on supply/demand.
So, this whole research is kinda pointless. In fact the worst thing anyone could do is have a metric and make the entire nation focus on that.
Re: Gross domestic product is a misleading measure of national success (2014)
#5[deleted]
Re: Gross domestic product is a misleading measure of national success (2014)
#6Nobody makes any policy decisions based on GDP. It's just a proxy of economic activity. Nobody ever said, We (won't) need policy X because we are at Y GDP. Companies make decision based on supply/demand. So, this whole research is kinda pointless. In fact the worst thing anyone could do is have a metric and make the entire nation focus on that.
Tell that to the Canadian government. It currently considers massive deficits fine because of our debt-to-GDP ratio, despite GDP being driven by a real estate bubble for the last several years.
Re: Gross domestic product is a misleading measure of national success (2014)
#7Reading an earlier thread on Perl I was thinking about how concepts,
language and behaviour relate (as Wittgenstein and Ayer might have
it).
Someone mentioned how, as a Python user, they barely had to think about pointers/references. Things get magically referenced when needed. Seems like progress.
When concepts get coded into a language, in this case "economics" (which is a tool for trying to see the world), they put down roots. Other concepts "hang off" them. So, we could certainly try to supplant GDP as a metric. But then what of all the other economic structures that people have built on GDP? Who will let go of those?
You have to tear down entire branches of thought and replace them with new utility concepts that make using old ones as anachronistic as using pointers in Python.
Re: Gross domestic product is a misleading measure of national success (2014)
#8Reading an earlier thread on Perl I was thinking about how concepts, language and behaviour relate (as Wittgenstein and Ayer might have it). Someone mentioned how, as a Python user, they barely had to think about pointers/references. Things get magically referenced when needed. Seems like progress. When concepts get coded into a language, in this case "economics" (which is a tool for trying to see the world), they pu…
> So, we could certainly try to supplant GDP as a metric.
This is very apparent, because it was only about 30 years ago that GDP itself replaced GNP as the preferred metric for the same purposes in the US. The article mentions the use of GDP internationally for longer, but the US preferred GNP until 1991.
Its also worth noting that the creator of the GDP, a decade before it became dominant (internationally), also warned against overfocusing on it as a measure of welfare, in terms that really apply to any simple unidimensional measure:
“The valuable capacity of the human mind to simplify a complex situation in a compact characterization becomes dangerous when not controlled in terms of definitely stated criteria. With quantitative measurements especially, the definiteness of the result suggests, often misleadingly, a precision and simplicity in the outlines of the object measured. Measurements of national income are subject to this type of illusion and resulting abuse, especially since they deal with matters that are the center of conflict of opposing social groups where the effectiveness of an argument is often contingent upon oversimplification” [0]
The state of the economy is complex and multidimensional, and we need a set of measures which reflect that.
[0] https://fraser.stlouisfed.org/title/national-income-1929-193... , pp. 5-6
Re: Gross domestic product is a misleading measure of national success (2014)
#9Nobody makes any policy decisions based on GDP. It's just a proxy of economic activity. Nobody ever said, We (won't) need policy X because we are at Y GDP. Companies make decision based on supply/demand. So, this whole research is kinda pointless. In fact the worst thing anyone could do is have a metric and make the entire nation focus on that.
That's so laughable a statement I don't know where to begin. Maybe the private sector cares about it less (questionable in itself given how the stock market obsesses over recession signals) but governments absolutely use GDP for policy decisions.
Re: Gross domestic product is a misleading measure of national success (2014)
#10GDP might be the ultimate example of Goodhart's Law: https://en.wikipedia.org/wiki/Goodhart%27s_law