GDP in the UK is hugelly manipulated anyways.
I remember back in 2012 when in the aftermath of the 2008 there was a “double dip recession” (a bit of GDP fall, twice) according to Official figures. Well, a few years later a group of Economists calculated GDP from the very same source figures and the result was very different from the Official GDP, with Britain having actually had a Depression (a GDP fall of over 4%).
And don’t get me started at the whole scam of using the CPI measure of inflation that excludes housing rather than the CPI-H that includes it in the calculation of the Real GDP (which is the official one) even though house prices go into calculating the Nominal GDP via a mechanism called “inputted rent”. Housing inflation goes into the nominal GDP and then the Inflation figures which are used to strip out the inflation from it to make the Official GDP (using something called the GDP Deflator, were the higher the Inflation the lower the resulting GDP) don’t include house price inflation.
Thanks to this scam, because housing inflation does go into the raw GDP and the inflation from housing which is never stripped out when making the official GDP figures from it, Britain’s realestate bubble ends up at the other end of this process with politicians harping about how great they are at managing the country because GDP went up, the worse the realestate bubble the more they have made Britain “grow”.
I suspect that most people in Britain (especially the younger generations) don’t at all feel all that “growth”, quite the contrary.
Yes he is right, targeting well-being directly is way more sane than pretending ‘market forces’ will mysteriously result in well-being despite all appearances
Zack Polanski wants to make things better for ordinary working people. Is he right?
GDP does not include home labour, mostly carried out by women. If you’re a woman who takes even one day off from work for childcare, you are “harming” the countries GDP - you have reduced your wage and are not paying others to do that “job”. Ohh wait, why don’t you hire cleaners, hire gardeners, hire a handyman, hire a chef, and do your part for the economy - just work that third job and the business news will be happy!
How the fuck did we end up with a system where this supposed measure is the most important thing
The simple answer is because, while it’s not perfect, it’s still quite useful, and easier to measure than something more subjective like wellbeing.
Consider an analogous satire to yours: “If you’re depressed, or demanding better conditions, you are ‘harming’ the country’s wellbeing - you have reduced your wellbeing and are not granting wellbeing to anyone else by doing so. Why don’t you lower your expectations and be happy with what you’ve got, why don’t you avoid seeking treatment for depression so it’s not recorded on the statistics!”
All such metrics which aim to comprehensively summarise the state of something complex like an economy or population are subject to things they can’t capture, and subject to perverse incentives.
I think a good, honest attempt to make wellbeing a metric by which we judge the country is a fantastic idea, but a simplistic take on GDP - like yours, I’m afraid - is not why.
My take on it is not trying to be simple. It is showing one fundamental issue that would instantly change the entire calculation if reflected. The fact that it was not a diverse group of people from diverse background probably meant they missed something so fundamental.
The analogy you used just doesnt work in my view. The fact that you’re depressed would already lower an equivalent measure of wellbeing. The underlying point that you are depressed does not change whether you seek treatment or not. You’re more likely to take sick days, more likely to have other health conditions, more likely to abuse drugs/alcohol, and other factors that could potentially be measured. Being depressed is not a choice but looking after your children or cleaning your own house is a choice.
We should at least make an attempt to try. I agree it would be difficult bit then they were trying to come up with GDP, it would’ve seemed to be an impossible task but they managed to find a way.
We should also make an attempt to fix the issues with GDP or stop using it as much as it is. Why is it ok to use this metric over any other?
“Why is it OK to use a metric” is a weird question to ask. Why wouldn’t it be OK?
You could certainly try and take other things into account but… do you believe that the UK government does not consider any metrics except GDP when designing policy? Do you believe that voters don’t consider any other outcomes when deciding whom to vote for? These are clearly not the case, and using several metrics together is equivalent to tweaking one metric to incorporate additional facts.
The way we really see the particular example you picked is by comparing unpaid and paid childcare. So the government could subtract paid childcare from headline GDP statistics, on the assumption that what that actually pays for is something that would otherwise happen anyway without payment.
But what would making this tweak achieve? Do you think people are out there pushing for an expansion to free childcare because it would make GDP figures go up? Because I think we push for that because it’s the right thing to do for society.
As for my example, I think if you thought a little bit you’d see how practical ways of measuring depression (such as numbers of diagnoses in the NHS) would be subject to the same perverse incentives you’re talking about with how GDP is measured. You suggested some proxies for wellbeing. Let’s take number of sick days: the perverse incentive there would be that the government might launch a crackdown on slackers taking sick days they don’t need to make the numbers look better, even though that’s bad for society.
Maybe this isn’t the kind of thing you’re worried about with GDP, but then I don’t really knwo what is.
You’re very correct, in that any measure that becomes valued turns into a gamified target.
I do think that we have a habit of using GDP rather than GNP to obscure how many British products have been bought by Yanks, and have their profits syphoned off overseas.
My bigger issues with GDP is how it does tend to end up as the sole yardstick used in mainstream economics debates, and how it often includes financial services - which seems an artifical inflation; for instance simply paying the fees on a savings account (or even the overdraft fee) count towards GDP figures by default, but then arbitrarily choosing what to exclude makes a whole lot of new problems, and is something else you’re right about, too.
The simple answer is because, while it’s not perfect, it’s still quite useful, and easier to measure than something more subjective like wellbeing.
But it’s so much easier to believe that GDP measures how evil the economy is and that politicians only care about the big evil yardstick due to their being evil.
Fact!
How the fuck did we end up with a system where this supposed measure is the most important thing
well, here’s a chance to change that with a vote
I wonder if Polanski could be really radical and just scrap targets? You combat neo-liberalism by changing the conversation not by joining in.
Good point let’s just vibe the code the economy. You know this can actually starve people, yeah?
And you know that GDP wasn’t used before the 1930s? And that Simon Kuznets, the economist who developed it, warned against using it - especially due to its impact on welfare. We really don’t need the targets-driven neoliberalism. There are already millions of children hungry every day in the UK, yeah?
I never said GDP should be the target, you said scrap all targets. I don’t believe that anyone who’s ever attempted anything seriously difficult could hold that position in earnest, You need some kind of numeric feedback or you’re cooked.
Kate Raworth uses the term “boundaries”; I’d probably use “thresholds”. Targets are insidious and something to avoid. Societies without targets have existed and thrived. So - yes - let’s ditch all neoliberal targets!
Yeah cool you can rename it if you want, whatever.
You too. Best wishes in keep setting yourself those daily targets. The acceleration will happen!
Yeah, the BBC are talking 'bout the GDP
That means fuck all to me
I gotta eatYou know a brother’s gotta eat
When he ask how I feel, I reply that I’m fed up
Some are drowning in money, I’m barely keeping my head up
Price of life on the rise, I’m feeling like it’s a setup
'Cause nobody that I grew with seems to be getting a leg upHe is right.
Sounds like a better measurement than GDP, although it can be harder to measure.
Apart from the fact that, as the article acknowledges, the government is already measuring all these things (and has done for as long as I, at least, can remember), GDP didn’t become a key economic measure by accident; it was chosen precisely because it’s a good reflection of general wellbeing.
Of course, we also can, should and do measure lots of other things, including other economic metrics (like inflation) alongside numerous more general outcomes like education levels, life expectancy etc. Generally, with that latter group, higher GDP leads to better outcomes in those areas, which is why it’s a good shorthand.
If you want further evidence of how trite this all is, David Cameron said the same thing in 2010.
Isn’t GDP the thing the scam that American companies are doing where they all pass around the same 100 billion to eachother so it artificially inflates GDP even though 0 value, monetary or wellbeing-wise is being created.
No.
When you measure something and set it as the goal, what was a good indicator becomes divorced from what you care about.
Measuring GDP makes GDP the goal, not general wellbeing. So if you care about wellbeing, measure it and use that as your driving metric.
The first sentence here is in opposition to the final sentence. If you want to measure ‘general wellbeing’, you will have to define some specific metrics. These will then - according to your own argument - become the goal and you will again be in the position of missing the thing you ‘actually’ care about.
Alternatively - you could pick a good general measure (like GDP) and also measure other things alongside that to get a good holistic picture. Which is what we already do.
Gdp was great indicator BEFORE the globalization. Right now it loses its value due to supply chains baing stretched far out of the country you’re measuring.
I generally agree that quality of life indicators are better. Especially since they’re separate from income inequality matter
I generally agree that quality of life indicators are better. Especially since they’re separate from income inequality matter
I think they’re different, rather than better, which is why it’s important to measure both (as we do already). Like, I’d rather live here than in China for all sorts of reasons; equally, if I could have what we have here but also have China’s GDP, I’d happily take that.
Gdp was great indicator BEFORE the globalization. Right now it loses its value due to supply chains baing stretched far out of the country you’re measuring.
I don’t think this is true at all. One of the main things GDP measures is trade, including foreign trade. It doesn’t measure (or ‘care’) whether that trade came from the UK, France or China, as long as some part of it happened here. The length of the supply chain is irrelevant as long as someone here paid for and received some good or service; that economic fact is equal regardless of point of origin and that fact is what GDP measures.
Like, I’d rather live here than in China for all sorts of reasons; equally, if I could have what we have here but also have China’s GDP, I’d happily take that.
I prefer living in Poland than US despite Poland having much lower GDP. (both in absolute terms and per capita) Quality of life isn’t GDP.
I don’t think this is true at all. One of the main things GDP measures is trade, including foreign trade.
Trade within itself doesn’t improve anyone’s life. What improves people’s lives is availability of jobs and services (along with other factors)
If you’re Apple, you sell bunch of phones in Mexico, produce them in China and reinvest earnings in EU, your sale counts to US GDP but doesn’t meaningfully influence lives of US citizens. It was completely different 100 years ago when all of the supply chain was within US and resulted in creation of wealth, jobs and products all contained within US borders
Trade within itself doesn’t improve anyone’s life.
It does; it improves the life of the two (at minimum) people trading.
What improves people’s lives is availability of jobs and services
… which depend upon trade…
(along with other factors)
… like GDP!
If you’re Apple, you sell bunch of phones in Mexico, produce them in China and reinvest earnings in EU, your sale counts to US GDP but doesn’t meaningfully influence lives of US citizens
Yes, it does; it directly improves the lives of the people in the US who work for Apple and of their families, and also of Apple’s shareholders in the US and elsewhere (perhaps, like me, you don’t find yourself overly concerned with the quality of life of Apple’s shareholders, but they are people and Apple’s sales do improve their lives, and that is what is in question); indirectly, it improves the lives of the various other people that the employees and shareholders buy from and sell to.
t was completely different 100 years ago when all of the supply chain was within US and resulted in creation of wealth, jobs and products all contained within US borders
This has never been the case for almost any country anywhere in the world, but especially not for the US, which has always had a complex economy relying on global trade. Indeed, the US wouldn’t exist at all without international trade; it would have been impossible for colonialism to happen at all if foreign trade didn’t profit individuals along the supply chain.
I suspect that what the person you replied to, meant with “meaningfully improve the lives of US citizens” was that the amount Apple contributes to the GDP of the USA (odd, since much of the goods aren’t domestically produced) is disproportionately high compared to its impact on quality of life of people in the US as a whole.
While I’m sure most Apple employees are paid slightly above the median wage, I don’t know the median salary for an Apply employee. I also, like you, am not utilitarian enough to think that a handful of people living large in opulence makes up for the way inequality is harming living standards and the economy as whole (not to mention the impact of it all on the planet). Additionally, Apple and large companies don’t buy from, or in most cases sell to individuals. They buy and sell mostly to other companies and only at the end do smaller branches or franchises sell to actual people. Mostly you have numbers and goods moving between old fashioned AIs running on human-processing power, but not actual people.
- P.S. Colonialism didn’t begin with international trade, because the colonies were part of the colonising nation. They begin with murder, exploitation, and appropriation of conquered territory - trade could only happen once the formerly free regions were given a colonist government with sovereignty apart from the colonist home nation. And most of them were also just corporations originally too; and many who went were coerced either directly (by violence or law) or indirectly (by economics).
I suspect that what the person you replied to, meant with “meaningfully improve the lives of US citizens” was that the amount Apple contributes to the GDP of the USA (odd, since much of the goods aren’t domestically produced) is disproportionately high compared to its impact on quality of life of people in the US as a whole.
They seemed a bit confused about the terms they were using, but your glosses don’t help, I’m afraid. ‘Meaningfully improve’ isn’t qualified but neither is your ‘disproportionately high’: ‘disproportionate’ according to whom and by what metric? A quick search suggests something like 150 million people in the US own an iPhone. It’s only by engaging in complex foreign trade that Apple can make and sell their products at the price points they currently use; the foreign aspect of the trade direct impacts every one of those 150 million people by making their phones cheaper. They presumably feel their lives are improved by it. And that’s just the iPhone, not counting Apple’s various other products, nor the businesses that depend on those products (and the people that depend on the businesses).
So, big tech arguably has a disproportionately large economic impact due to those dependencies. To be clear, I’m not saying this is certainly the case; my point is that the trade companies like Apple engage in is important, it does benefits US citizens in all kinds of ways (direct and indirect) and it makes perfect sense to use GDP as a rough measure of those impacts alongside other metrics.
Colonialism didn’t begin with international trade
Yes, it did. It began with people trading across increasing distances, then trying to secure those trade routes (by conquering people along the way), then trying to secure the production itself at source (by conquering the regions where the products were found, grown or made). The Romans conquered the Mediterranean because it was their most important trade route; Columbus was trying to open up new trade routes.
Maybe I’m biased, but I find it hard to believe that those 150 million (nearly half the population of the US?) would see a notable drop in the quality of their lives if their iPhones were Samsung, or Huawai, or any other non-domestic company’s.
You’re right in that “meaningfully improve” and “disproportionate” aren’t precise or scientific terms, either.
And re: colonialism, I think more people have managed international trade without going coloniser than did, so it can’t be seen as the sole origin. Needs more to germinate.
On the main issue, I’d say while GDP is far from perfect, it’s better to have the measure than not. Even if it works best as part of a range of measures and not over relied upon as it tends to be in popular understandings at the moment, in my view anyhow.
Temper it with more inequality stats, and also median wages vs. cost of living.
