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Gross domestic product is a misleading measure of national success (2014)

nature.com

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Re: Gross domestic product is a misleading measure of national success (2014)

#61

Post by javajosh »

So if passive income is the rational goal, shouldn't that be the measure of national success - numbers that express the shape and scale or aggregate passive income. It's also worth assuming that the equity barons (to borrow a term from The Diamond Age) hire capable administrators close to home, who get cushy office jobs and even small profit to invest and get a little equity themselves. One can also discuss more and less desirable distributions between the equity barons and admins. The rest of the world gets nothing, or as little as is necessary to keep the peace, and America remains in undisputed charge until some natural disaster ends human life. And absent any particular reason to spread life beyond our thin and fragile biosphere, we won't.

Rather than paper over the ugliness I think we should accept it and see what can be made of it. A nation will have succeeded if it can spread life beyond Earth. It will have succeeded if it can protect it's citizens capacity for a calm, creative, productive life filled with wonder and joy long enough for enough people to realize this, and get to work. It's not going to be easy, and our time is limited.

Re: Gross domestic product is a misleading measure of national success (2014)

#62

Post by nostromo »

It's hard to overstate how terrible this idea is.

GDP is a concrete measure that is difficult to fake. Once you start arguing about the economic value of volunteering, divorce, income inequality, and crime -- you've opened the door to never being able to trust GDP again.

Should we create new metrics to track progress? Sure. Should we stop tracking GDP? No way.

Re: Gross domestic product is a misleading measure of national success (2014)

#63

Post by fedreserved »

lkrubner wrote: post #58

Robert Kennedy, on the campaign trail in 1968: "Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things. Our Gross National Product, now, is over $800 billion dollars a year, but that Gross National Product - if we judge the United States of America by that - that Gross National Product counts air pollution and cigarette advertising…

No post body was provided.

Re: Gross domestic product is a misleading measure of national success (2014)

#64

Post by wildrhythms »

tabtab wrote: post #17
xnx wrote: post #10

GDP might be the ultimate example of Goodhart's Law: https://en.wikipedia.org/wiki/Goodhart%27s_law

A common example is "lines of code". If you pay by lines of code, then coders will bloat up code to pad their metrics, making it verbose and redundant.

More common is some mostly pointless (or annoying) new feature that an overzealous project manager wants to get users to 'use' (thus boosting some metric they can point at to secure a promotion), so they have the engineers implement a gigantic popup pointing at it. Or worse, they put the entrypoint to the feature in some high touch area so all of the power users accidentally click on it, thus logging an interaction and making the line go up. https://en.wikipedia.org/wiki/Goodhart%27s_law

Re: Gross domestic product is a misleading measure of national success (2014)

#65

Post by nullc »

lkrubner wrote: post #58

Robert Kennedy, on the campaign trail in 1968: "Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things. Our Gross National Product, now, is over $800 billion dollars a year, but that Gross National Product - if we judge the United States of America by that - that Gross National Product counts air pollution and cigarette advertising…

Any idea who wrote that speech for Robert Kennedy?

Re: Gross domestic product is a misleading measure of national success (2014)

#66

Post by epgui »

nostromo wrote: post #62

It's hard to overstate how terrible this idea is. GDP is a concrete measure that is difficult to fake. Once you start arguing about the economic value of volunteering, divorce, income inequality, and crime -- you've opened the door to never being able to trust GDP again. Should we create new metrics to track progress? Sure. Should we stop tracking GDP? No way.

Is it more unreasonable to assume the value of these things is >0, or to assume that the value of these things is ==0?

I don't think anybody is arguing that we should stop measuring or looking at GDP entirely. The article argues that we need to recognize that we can't just close our eyes to the value of these things.

It's kind of like talking about the value of a human life in dollars. We know this number is more than 0$, and we know this number is less than __POSITIVE_INFINITY__$, and we're probably never really going to agree on a number somewhere in the middle, but it's still an important number to consider.

Re: Gross domestic product is a misleading measure of national success (2014)

#67

Post by blooalien »

steven_noble wrote: post #57

It's grossly misleading to suggest that economists use GDP as a measure of national success

Nope economists may not, but politicians often do (when it suits them), and many "corporate bean counters" use similar measures of "success" (when it suits them), and "Average Joe" takes whatever their favorite politician or corporation tells them as "Gospel Truth"…

Re: Gross domestic product is a misleading measure of national success (2014)

#68

Post by em500 »

The title/article seems to be a bit of a strawman, AFAICT countries (or their governments / citizens) do not consider the GDP as the one and only measure of national success. Politics are driven by tons of different interest groups (in the broadest sense, ranging from corporate interests, environmental activists, minority representatives, medical or teaching professionals, farmers, retirees living on state pensions, etc, etc.), not by whether some policy might give a boost to GDP. I could argue that it would probably be better if they actually did, but that's for another thread.

In truth, pretty much nobody really knows for sure what policies actually will increase GDP, or what causes the short term fluctuations (business cycle / recession) or variation in long term divergense between different countries in the first place. The more honest academic economists will freely admit this. (I was explicitly thaught so in my graduate macro-economics courses). So I think it's a strawman to think that countries/governments are engating in some kind of myopic GDP maximization plan.

I think the appropriate analogy is household or personal income. (GDP is just all incomes in a country summed up and corrected for inflation.) It's probably not the most important thing in the world, and probably not the most important determinant of personal happyness or life satisfaction. But a severe lack of it (especially compared to the people around you) or an unexpected large drop will probably be considered problematic by most people.

Re: Gross domestic product is a misleading measure of national success (2014)

#70

Post by nostromo »

epgui wrote: post #66
nostromo wrote: post #62

It's hard to overstate how terrible this idea is. GDP is a concrete measure that is difficult to fake. Once you start arguing about the economic value of volunteering, divorce, income inequality, and crime -- you've opened the door to never being able to trust GDP again. Should we create new metrics to track progress? Sure. Should we stop tracking GDP? No way.

Is it more unreasonable to assume the value of these things is >0, or to assume that the value of these things is ==0? I don't think anybody is arguing that we should stop measuring or looking at GDP entirely. The article argues that we need to recognize that we can't just close our eyes to the value of these things. It's kind of like talking about the value of a human life in dollars. We know this number is more tha…

It's more reasonable to say that determining the value of divorce is beyond the scope of GDP.
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