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

Li Keqiang index, Context from wiki:

>According to a State Department memo (released by WikiLeaks), Li Keqiang (then the Chinese Communist Party Committee Secretary of Liaoning) told a US ambassador in 2007 that the GDP figures in Liaoning were unreliable and that he himself used three other indicators: the railway cargo volume, electricity consumption and loans disbursed by banks.

Total Social Finance - do a quick google for summary, another composite indicator because up until 2010s PRC just had shit tier data reporting without even factoring in central gov lack of trust of local gov reporting. LKI became mainstream when he became premier in 2013, both LKI and TSF gets reported in domestic and foreign analysis on PRC econ since.

GDP smoothing: https://www.economist.com/free-exchange/2015/07/15/whether-t...

>There is a difference between smoothing data and totally fabricating it. Evidence suggests that China is guilty of the former (the lesser charge) but not the latter (the more serious allegation).

There's better academic writings in past decade that goes into why PRC smooths GDP, but TLDR circles back to GDP is more politically useful as setting a "target" for growth (for both local officials and to inform foreign media/investors) than actual "measure" for growth, which is better gauged with other indicators, that can still be gamed but less so than cells on a spread sheet.

>NBER study from 2017: https://www.nber.org/papers/w23323 Also discusses LKI and other background in PRC gdp reporting. As well as a country specific analysis vs Martinez let's crudely apply blunt metrics to every country generalist approach. Note this was published same year as Martinez study.

CSIS analysis: https://www.csis.org/analysis/broken-abacus The reports seems to be removed/for pay now, but there's podcasts from author that summarizes the study and degree of potential underreporting.

As for incentive to under report, that's more conspiracy theory but IMO well justified. PRC benefits structurally from being treated as developing economy much than transient PR of reaching high income per capita. If one believes PRC is under reporting GDP, or overreporting population, especially by some of the higher end numbers, then PRC per capita GDP may have reached higher income, which has been a contentious issue by other (developed) countries at the WTO who wants to strip PRC from benefits reserved for developing countries.

Or, to push it in the other direction: sell a service back and forth. I sell you a message for 1 billion and then you sell me one for 1 billion. Now we’ve increased gdp by 2 billion (although you need to live in a zero VAT and zero income tax country to do that as a private person and still have it count)

That makes no sense. Human wants are infinite only at zero marginal cost. The moment there is a positive marginal cost wants become finite. Even a gift that costs you nothing has a marginal cost to receive and store it in your house. So even if the entirety of humanity gave Jeff Bezos a gift he would refuse those gifts at some point.

What western societies suffer from is not scarcity but abundance relative to our quite limited wants.

We give up an unreasonable amount of resources to buy something that is already there, land in a popular location. One thing that is special about land is that humans didn't create the earth. Suddenly there is an infinite demand for land because you own anything that happens on it, even the labor of other people working the land. The marginal cost of land is negative because of income taxation. But here is the thing. One man's land abundance is another man's land scarcity. So if you really wanted to solve this problem you would have to divide the earth equally among all humans.