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All of this seems to be well-known and convincing. Yet, GDP is still the only metric media and politicians seem to care about. Is it a another case of the "empe

All of this seems to be well-known and convincing. Yet, GDP is still the only metric media and politicians seem to care about. Is it a another case of the "emperor has no clothes"?

_delirium 9y ago
We want a number, and GDP is a well-known number. As the article notes, there are various replacement proposals, but all get significant push-back from economists, and none of them have gained enough critical mass to rival GDP as a thing people quote. So GDP wins by default even though many people are unhappy with it. People are also unhappy with it for pretty different reasons, which doesn't help in consolidating an alternative.
Florin_Andrei 9y ago
A lot of cameras are sold solely based on the simple metric of "megapixels". Of course, there's a lot of trash out there that has tons of pixels but severely underperforms. Sometimes we need to simplify reality in order to make decisions. The question is - how simple is too simple? It seems like an exclusive focus on GDP as the sole indicator of the well-being of nations, just like the focus on megapixels as the indicator of performance of cameras, might be too simple indeed.
gozur88 9y ago
I think unemployment is more politically significant. The followup question for anyone reporting a rising GDP is "sure, but what does this do for job growth?"
- vkou 9y ago
  Unemployment is even less useful then GDP. At least GDP is some sort of proxy for how well-off a country is. You can have 0% unemployment (I hear North Korea is currently there), with mostly poverty-line wages with everyone making a meager third-world living, or you can have 30% unemployment with everyone being relatively better off, with fewer people working more productive jobs, and paying for an overall social safety net/others to go to school/raise children/retire. I'd far rather live in the second society, then the first.
  - gozur88 9y ago
    While it's true you can't have 0% unemployment in a free market, going from, say, 8% to 5% is a big deal that helps in a lot of ways. 30% unemployment, the way it's normally defined, means 30% of your population are looking for jobs and unable to find them. Which is an unmitigated disaster.
    - vkou 9y ago
      There are millions of Americans who have given up looking for jobs, because they are unable to find a job that pays enough for them to stop caring for their children/relatives/take time off schooling/pay for costs of working. They are not represented in unemployment numbers (Because as it turns out 'I need to earn $25/hour to be able to afford daycare for the kids, but I could never get a job like that, and I've stopped looking') does not get counted in UE stats. Putting those people to work would not actually make any of us better off... Yet it would reduce unemployment. The point of my post was that jobs are not created equal. 0% unemployment because everyone is working jobs that pay very little is an unmitigated economic disaster. 30% unemployment because a smaller group of people are only working productive, highly remunerative jobs is an incredible economic success. It does, however, raise the hackles on a few people.
      - gozur88 9y ago
        >There are millions of Americans who have given up looking for jobs, because they are unable to find a job that pays enough for them to stop caring for their children/relatives/take time off schooling/pay for costs of working. >They are not represented in unemployment numbers ... Depends on the set of numbers you're looking at. DoL produces different numbers that encompass different assumptions. Normally these people are not considered unemployed, so putting them to work wouldn't change the unemployment statistics. And I don't believe having 30% of the population carrying the other 70% is at all an economic success. That's an unstable situation that can't continue.
    - deleted 9y ago
      [deleted]
usaar333 9y ago
It dominates, but it's not the only one. (i)HDI is also used, which has improvements over GDP per capita, but still with some of the limitations described in the article.

All of this seems to be well-known and convincing. Yet, GDP is still the only metric media and politicians seem to care about. Is it a another case of the "emperor has no clothes"?

_delirium 9y ago

We want a number, and GDP is a well-known number. As the article notes, there are various replacement proposals, but all get significant push-back from economists, and none of them have gained enough critical mass to rival GDP as a thing people quote. So GDP wins by default even though many people are unhappy with it. People are also unhappy with it for pretty different reasons, which doesn't help in consolidating an alternative.

Florin_Andrei 9y ago

A lot of cameras are sold solely based on the simple metric of "megapixels". Of course, there's a lot of trash out there that has tons of pixels but severely underperforms. Sometimes we need to simplify reality in order to make decisions. The question is - how simple is too simple? It seems like an exclusive focus on GDP as the sole indicator of the well-being of nations, just like the focus on megapixels as the indicator of performance of cameras, might be too simple indeed.

gozur88 9y ago

I think unemployment is more politically significant. The followup question for anyone reporting a rising GDP is "sure, but what does this do for job growth?"

vkou 9y ago
Unemployment is even less useful then GDP. At least GDP is some sort of proxy for how well-off a country is. You can have 0% unemployment (I hear North Korea is currently there), with mostly poverty-line wages with everyone making a meager third-world living, or you can have 30% unemployment with everyone being relatively better off, with fewer people working more productive jobs, and paying for an overall social safety net/others to go to school/raise children/retire. I'd far rather live in the second society, then the first.
- gozur88 9y ago
  While it's true you can't have 0% unemployment in a free market, going from, say, 8% to 5% is a big deal that helps in a lot of ways. 30% unemployment, the way it's normally defined, means 30% of your population are looking for jobs and unable to find them. Which is an unmitigated disaster.
  - vkou 9y ago
    There are millions of Americans who have given up looking for jobs, because they are unable to find a job that pays enough for them to stop caring for their children/relatives/take time off schooling/pay for costs of working. They are not represented in unemployment numbers (Because as it turns out 'I need to earn $25/hour to be able to afford daycare for the kids, but I could never get a job like that, and I've stopped looking') does not get counted in UE stats. Putting those people to work would not actually make any of us better off... Yet it would reduce unemployment. The point of my post was that jobs are not created equal. 0% unemployment because everyone is working jobs that pay very little is an unmitigated economic disaster. 30% unemployment because a smaller group of people are only working productive, highly remunerative jobs is an incredible economic success. It does, however, raise the hackles on a few people.
    - gozur88 9y ago
      >There are millions of Americans who have given up looking for jobs, because they are unable to find a job that pays enough for them to stop caring for their children/relatives/take time off schooling/pay for costs of working. >They are not represented in unemployment numbers ... Depends on the set of numbers you're looking at. DoL produces different numbers that encompass different assumptions. Normally these people are not considered unemployed, so putting them to work wouldn't change the unemployment statistics. And I don't believe having 30% of the population carrying the other 70% is at all an economic success. That's an unstable situation that can't continue.
  - deleted 9y ago
    [deleted]

usaar333 9y ago

It dominates, but it's not the only one. (i)HDI is also used, which has improvements over GDP per capita, but still with some of the limitations described in the article.