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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)

#91

Post by hot_gril »

dongobongo wrote: post #79

From Luke Smith's post on GDP: https://lukesmith.xyz/articles/why-its-bad-to-have-high-gdp/ "GDP is only a measurement of how reliant a place or country is on the global economy. Self-sufficiency has a GDP of 0. Wasteful consooomerism has an extremely large GDP."

Wasteful consumerism, if it's truly wasteful, will also lead to lower future GDP growth. It's not a bad long-term metric. But I won't care if the US president claims to have moved the GDP by X%, even across two terms. The market can stay irrational for a long time.

To use Luke's example, say buzzsaws introduce planned obsolescence. People buy more saws for no good reason, which is "good for the GDP." More fixed income goes to buzzsaws instead of eventually being spent on something more useful. The buzzsaw industry expands a bit, pulling people and resources from other endeavors. Society is collectively spending its effort producing then throwing away buzzsaws when it could have created future growth through technology etc, which the GDP would eventually measure.

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

#93

Post by hnews_account_1 »

dakial1 wrote: post #80
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.

It is not difficult to fake (e.g. China for the last 20 years). But I agree with you, we should add new metrics (and targets) but keep a GDP as one of them, also for the other indicators to mature (how they are measure, methodologies, transparency, etc...). Maybe one day GDP would be able to be left behind...

GDP is not what people randomly think it is. It is a measure of the economic output of a country. It isn’t about equality or productivity or did the money build a ghost town etc. If we had the magical mathematics to encode that much in a single number, we’d be traveling the stars.

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

#95

Post by refurb »

osterwood wrote: post #45

I was surprised to learn that, in the US, health care is part of GDP. How messed up is that? Health care costs are not a productive output of an economy and to include them in GDP is ludicrous.

I hope it is or that would mean our doctors and nurses aren’t paid!

GDP is literally just goods and services provided. So any compensated activity or good is included, so things like doctor's salaries, teachers, social workers are all included.

It's hilarious how people have such an aversion to GDP when it literally represents stuff they want.

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

#96

Post by kornhole »

The gig economy boosts GDP. If I work as an employee, I am just an expense to a company. If I setup an S corporation and contract my services to that same company, I am now growing the services sector and increasing GDP. I am still doing the same amount of work but just increasing transactions. I seem to be incentivized by pay and taxes to work as contractor, and this may be because the government is trying to pump GDP.

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

#97

Post by Phiwise_ »

nicoburns wrote: post #29
xnx wrote: post #10

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

I'd argue that "free market" pricing in general is. The attitude that "something is valuable if people are willing to pay for it" is being increasingly overfitted.

Overfitted to what? If the whole point of economics in a moral sense is to get people more value, than what does the question of if person A will buy item 1 at a higher price than person B for item 2 for better or worse reasons get the average person/company except for a distraction from their goal? Make item 1, sell it to person A, and go enjoy your more prosperity than you would have gotten for selling item 2 to person B. This proposal needs to be much more concrete to mean anything.

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

#98

Post by resoluteteeth »

lkrubner wrote: post #83
nullc wrote: post #65

Earlier quoted context omitted.

Any idea who wrote that speech for Robert Kennedy?

While RFK sometimes got help from Edwin Guthman and Peter Edelman, he also spoke extemporaneously sometimes, most famously when he had to announce the death of Martin Luther King to a crowd that hadn't yet heard the news: https://kennedykingindy.org/full-rfk-speech

The speech in your link sounds very different stylistically from the speech in the parent comment. In my opinion, the one in the parent comment doesn't sound like it was extemporaneous.

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

#99

Post by paxys »

It's funny to argue on one hand that GDP is broken because it tracks only economic metrics and not social ones, and then push another index (GPI) which claims that "genuine progress" peaked in the 70s and went only downhill from there.

If "back in my day..." was an index this would be it.

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

#100

Post by Nullabillity »

Retric wrote: post #53
osterwood wrote: post #45

I was surprised to learn that, in the US, health care is part of GDP. How messed up is that? Health care costs are not a productive output of an economy and to include them in GDP is ludicrous.

By that token why not exclude entertainment spending as useless. In reality people devote surplus to things they want rather than pure needs.

Entertainment is positive value ("I want to watch/play/whatever this because I enjoy it"), healthcare is compensation for negative value ("I got injured and want to feel a little less shit"). Nobody goes to the doctor just because they felt like doing it that day.

Counting the positive contribution of healthcare without counting the negative contributions of the injuries that lead people to seek healthcare is going to lead to a metric that looks better the more injuries there are!

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