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> This is one of those areas where we have to recognize that economics and GDP do not tell the whole story of human value. This is true, but in the other direc

> This is one of those areas where we have to recognize that economics and GDP do not tell the whole story of human value. This is true, but in the other direction from your statement's surface meaning: Open standards are in great us, but count as $0 in GDP, since they are free. You might say that means that GDP undercounts value. but really, no one derives value from open standards -- open standards enable valuable activities, some of which are GDP (for example, ecommerce), and some of which are not (for example, emailing pictures to my grandma, which is negative GDP compared to printing and mailing). GDP overcounts:anything we spend money on is GDP, even if it is just a means to an end; and undercounts: many valuable things have no price, and more generally, most purchased end-user products are worth more than their price.

vinceguidry 10y ago
> GDP overcounts:anything we spend money on is GDP It's not as if they are blind to the problem. Economists understand this, but laypeople tend to, out of a desire for simplification, subconsciously conflate the concept of GDP with "health of the economy". There is an old joke about how when an economist marries his housekeeper, the GDP of his nation goes down. There's a raft of different metrics that economists have devised to get around the problem that not everything that's measured is relevant, and not everything that's relevant is measured. Of course, you have to be an economist to really understand them.
barrkel 10y ago
Using GDP as a measure is only ever done because we don't have reliable alternative measures. We set up economic systems not because they are good in themselves, but because they're a way of connecting productive capacity to demand with the ultimate aim of increasing well-being - the pursuit of happiness and all that. Some people seem to lose sight of that: capitalism too is not an end in itself, it is a means to an end. Financialization needs to be watched closely to ensure it's still hewing to society's best interest. Arguably Brexit, Trump et al are emerging from this gap.

vinceguidry 10y ago

> GDP overcounts:anything we spend money on is GDP It's not as if they are blind to the problem. Economists understand this, but laypeople tend to, out of a desire for simplification, subconsciously conflate the concept of GDP with "health of the economy". There is an old joke about how when an economist marries his housekeeper, the GDP of his nation goes down. There's a raft of different metrics that economists have devised to get around the problem that not everything that's measured is relevant, and not everything that's relevant is measured. Of course, you have to be an economist to really understand them.

barrkel 10y ago

Using GDP as a measure is only ever done because we don't have reliable alternative measures. We set up economic systems not because they are good in themselves, but because they're a way of connecting productive capacity to demand with the ultimate aim of increasing well-being - the pursuit of happiness and all that. Some people seem to lose sight of that: capitalism too is not an end in itself, it is a means to an end. Financialization needs to be watched closely to ensure it's still hewing to society's best interest. Arguably Brexit, Trump et al are emerging from this gap.