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You missed where I said: > something you pay nothing for So, obviously, yes, if you buy ice cream GDP will go up.

AnimalMuppet 10y ago
OK, now I see how to parse what you said. If I pay nothing, and I produce nothing, than it doesn't add to GDP. True, as GDP is constituted. But what if it is free and still makes me better off? Take Linux + Apache, for example. I can create a business for very little money because those are available to me for free. But are they only economically valuable when they cost money? If I used Windows to create my business instead, that would contribute to GDP, even if my business failed. Two (not perfectly) equivalent products, but one counts as GDP, and the other doesn't. Once you see that "economics" can contain more than dollars, then you see that GDP isn't the correct measure of economic activity.
- dragonwriter 10y ago
  > Take Linux + Apache, for example. I can create a business for very little money because those are available to me for free. And if you do, that business shows up in the GDP.
  - TheOtherHobbes 10y ago
    And if you don't turn it into a business, it doesn't, even though a lot of people may find your hobby project interesting/useful. What's the commercial value of a free live streaming app that captures evidence of a (say, for the sake of argument) a police assault, which eventually leads to a riot? GDP is like a summary of all relevant execution paths through code. But it's really a list of paths that are considered relevant for traditional reasons. It's not a complete picture, and in many ways it isn't even a useful one - because there's a huge implicit social morality tied up in econometrics that makes assumptions about social value. Those assumptions are becoming less and less relevant for all kinds of technological, political, and even economic reasons.
    - TeMPOraL 10y ago
      Indeed, and the problem here is that GDP gives you a nice-looking metric to drive your thinking. Except that the conclusions and strategies you make based on that number will be only as good as the limits of meaning of that number[0]. It's a proxy for some aspects of economic activity, and yet it seems to be treated by many as country's "hit points". [0] - a thing that nicely differentiates those who understand math fundamentals from those who don't - realizing that all theorems have a set of assumptions behind them, and are not valid outside that assumptions
    - Frqy3 10y ago
      A similar argument applies to traditional economic tasks. Clean your own house - no GDP. Pay someone to clean your house - GDP. Same amount of work is being done, but GDP only counts what is paid for.

OK, now I see how to parse what you said. If I pay nothing, and I produce nothing, than it doesn't add to GDP. True, as GDP is constituted. But what if it is free and still makes me better off? Take Linux + Apache, for example. I can create a business for very little money because those are available to me for free. But are they only economically valuable when they cost money? If I used Windows to create my business instead, that would contribute to GDP, even if my business failed. Two (not perfectly) equivalent products, but one counts as GDP, and the other doesn't. Once you see that "economics" can contain more than dollars, then you see that GDP isn't the correct measure of economic activity.

dragonwriter 10y ago
> Take Linux + Apache, for example. I can create a business for very little money because those are available to me for free. And if you do, that business shows up in the GDP.
- TheOtherHobbes 10y ago
  And if you don't turn it into a business, it doesn't, even though a lot of people may find your hobby project interesting/useful. What's the commercial value of a free live streaming app that captures evidence of a (say, for the sake of argument) a police assault, which eventually leads to a riot? GDP is like a summary of all relevant execution paths through code. But it's really a list of paths that are considered relevant for traditional reasons. It's not a complete picture, and in many ways it isn't even a useful one - because there's a huge implicit social morality tied up in econometrics that makes assumptions about social value. Those assumptions are becoming less and less relevant for all kinds of technological, political, and even economic reasons.
  - TeMPOraL 10y ago
    Indeed, and the problem here is that GDP gives you a nice-looking metric to drive your thinking. Except that the conclusions and strategies you make based on that number will be only as good as the limits of meaning of that number[0]. It's a proxy for some aspects of economic activity, and yet it seems to be treated by many as country's "hit points". [0] - a thing that nicely differentiates those who understand math fundamentals from those who don't - realizing that all theorems have a set of assumptions behind them, and are not valid outside that assumptions
  - Frqy3 10y ago
    A similar argument applies to traditional economic tasks. Clean your own house - no GDP. Pay someone to clean your house - GDP. Same amount of work is being done, but GDP only counts what is paid for.