Wednesday, June 25, 2008
The GDP Superstition
I notice Polly Toynbee casually refers to 'healthy GDP growth' and wondered why miserableness flourishes in such a climate. When will we be rid of this palpably stupid idea of GDP as any kind of measurement of, well, anything but certainly not of economic well-being? I draw your attention to the very sane testimony of Jonathan Rowe before a Senate Committee and to this old article. To put the point in a nutshell: the American economy, as measured by GDP, would undergo an unprecedented boom if every citizen were to contract a very slow acting cancer that required fabulously expensive drugs and heroic surgical interventions while simultaneously being subjected to appalling storms, earthquakes and fires that destroyed their homes and workplaces. So that's one way, Polly, in which miserableness and healthy GDP growth would march hand in hand. GDP is a contemporary superstition, a product of economists' science envy at its most virulent.
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A blog about, among other things, imaginary ideas - What ifs? and Imagine thats. What if photographs looked nothing like what we see with our eyes? Imagine that the Berlin Wall had never come down. What if we were the punchline of an interminable joke? All contributions welcome.
What I want to know is who's so miserable? I feel rather good myself, but then I'm rather a shallow sort.
ReplyDeleteThe British, frank, always the British
ReplyDeleteI find misery an odd sort of feeling. I use feeling as I'm not sure it's an emotion. There seems to be two distinct sorts, that inflicted on yourself and the sort inflicted by others on you. The only exception when both join is in a relationship where the more legal the more misery.
ReplyDeleteGrowth is a very slow acting cancer, some say. I agree, let's get rid of it before it destroys us.
ReplyDelete"economists' science envy".
ReplyDeleteOh good. Very good.
On the subject of being miserable, never forget that many - and yes, the Brits in particular - can extract a great deal of joy and contentment from being miserable. I myself am looking forward with some degree of excitement to be being a cantankerous old curmudgeon.
To be fair, it's not entirely the dismal "science"'s fault, but the use to which the politicians and the media put economic concepts. Growth must be good, deficits must be bad (and persistent deficits unsustainable), currencies are strong or weak... It is reasoning by linguistic analogy, not according to the underlying theory. (Which is 90% bunk, of course, but...)
ReplyDeleteThat's where utilitarianism leaves you though innit. Can't have an hedonic calculus without some figures to feed into it.
ReplyDeleteYes but...if you're not convinced by GDP growth, try the opposite for a few years and see how you like it. Your views remind me of the early Victorians who questioned the need for manufactured goods, believing that true economic success came from estate management and agriculture. Now, folks squeal we have no manufacturing base while others insist on the primacy of services. Nihil novum sub solem....
ReplyDeleteErm, Bryan, if you're starting your ruminations from the point that "Polly says" then you're bound to end up deep in the doo doo.
ReplyDeleteGDP measures one thing and one thing only, and at that it's very good. What is the value added in an economy?
Using it to measure anything else at all is what leads you into these sorts of troubles. Well, that and taking Polly seriously.