Zack Polanski (Green Party of England & Wales) argues that GDP should be downgraded as a measure of political economic success; he is 'much more interested in growing people’s mental health, growing our public services, growing cohesion of our communities'....
While possibly a quixotic aim given the continuing centrality of GDP measure to political discourse, it *does* play to people's distrust of GDP as a plausible measure of their own economic experience(s).
#economics #politics
h/t FT
Publicly provided goods and services - as distinct from transfers such as welfare payments - have counted as part of the production measure of GDP ( not to mention expenditure and income ) for as long I have been familiar with the subject - well over half a century. Where there was a problem was with conventions for measuring them - which often led to undervaluation though never nil value - and for including them where appropriate in measures of personal consumption.
@RussCheshire @ChrisMayLA6 The big issue with GDP isn't the figure itself, or how it is calculated.
The problem is that as a metric, it doesn't tell you very much, other than "the total of X is Y". There is no relation between GDP and the amount of tax raised. Or the welfare of the state or its residents.
If tomorrow Musk and Bezos decide to move their business to the UK, the GDP would go up enormously. While nobody would be a penny better off...
Of course the issue is whether a stagnating GDP necessarily means people get poorer? The dominance of GDP makes such a Q.seem non-sensical but rather is the heart of the problem...
Raise GDP. Build schools and hospitals we need. Build wind farms, solar fields, desalination plants, cafes and skate parks. Build bicycles and music venues, housing omgosh let's build dome housing, let's spoil some views.
Let's spoil a LOT of views.
@ChrisMayLA6 it’s not whether people get poorer or not. It’s whether the tabloid press will believe it.
Because if they don’t believe it, they will crucify the party that promotes it
But, of course, the right wing press' interest in the population's economic wellbeing is entirely contingent - when they like the party in power, the talk up general prosperity, when they feel themselves in 'opposition' then they talk it down....
yes, I used to have that quote on a powerpoint slide early on in my lecture on how to measure economic activity....
Although in Keynesian terms not really completely true - the multiplier effect of the money spent first on demolition & then the following funds spent on rebuilding would all flow outwards into the economy - hence Keynes notion that counter-cyclic economic policy might be just dig big holes & fill them in, provided it was paid employees doing it - the multiplier produces economic effects beyond the actual practical action beef paid for....
Indeed; the activity itself is not neutral in effect (as you rightly point out), but the multiplier does mean to some extent the cost(s) are nitrated more widely, but yes the valuing if infrastructure is key, which (to be fair to Rachel Reeves) is what the new version of the fiscal rules is approaching as a logic
@epistatacadam @ChrisMayLA6
On the first clause, yes (but it measures what it measures).
On the second, it is a basic principle of #measurement that #accuracy and #precision should each be known and reckoned with, but that large departures from perfection in either or both do not prevent useful measurements being made.
(When the fiction is reduced the instrument needs recalibrating.)
No' I'd disagree; GDP is trust-worthy inasmuch as any economic metric can be trusted... the problem is how the data point is politically deployed.
The concept has clear rules about it should be calculated, it allows comparisons to be made... but its focus is quite narrow in social terms, but politicians & the media never allow for that & so it is criticised for something it couldn't be - which is why alternative measure may be better.
Yes, I think we agree; as it is used in popular political discourse & media commentary, you are aright it bears little connection with loved experience - GDP per capita is a little better, but even then doesn't take distributional issues into account - so while we are expressing the argument in different ways I think we are *essentially* agreeing.
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