17 ms·

We should measure well-being instead of failing to measure economic productivity

321 points by nickt 4y ago

dr_dshiv 4y ago
WRT “AI for Wellbeing,” what research is taking place today?
- angusturner 4y ago
  Only tangentially related, but there is some cool work on using reinforcement learning to learn an optimal tax rate. See: “AI Economist”.
filbo 4y ago
WRT Human well being, what research is being undertaken today?
- s1artibartfast 4y ago
  Vast amounts of knowledge are continually generated about what leads to human well being, both scientifically and culturally. The real challenge IMHO, is that most people don't like the answers or want to make improvements.
  - filbo 4y ago
    The conglomerate of Tinder Match Bumble etc is producing vast amount of data on Human desires. We should mine that.
    - RockingGoodNite 4y ago
      The opposite sex. Done.
      - filbo 4y ago
        Don't forget the pets.
  - Bakary 4y ago
    What are some examples of answers that the public does not like?
    - s1artibartfast 4y ago
      It is hard to buy happiness. Building and maintaining social connections is very important. Exercise and healthy diet are very important. Personally helping others is very rewarding. Comparing yourself to others is very detrimental. Fixating on things and people you dislike is very detrimental. Most of these are things that people are told as a child and struggle to do. Most of them you can't buy, outsource, or regulate. My personal axe I like grinding is TV. The average American watches 20+ hours of TV a week. On average, I don't think it helps their long term happiness and I don't think it is restful. I think most people would be happier if they literally stared at a wall or slept instead, let alone if they did some of the things I listed above.
      - Bakary 4y ago
        I actually stopped watching TV because of a series of insights I discovered via HN. https://adam.nz/2001/zen-tv-experiment/ https://adam.nz/2001/zen-tv-experiment/ I don't agree with everything written in that essay and reject the Zen aspect but it was definitely a life-changing moment for me.
s1artibartfast 4y ago
Interesting idea but I am very skeptical that you could collect enough data on people to tease out how much their new toaster or app is contributing to their well-being. Self selection and lack of random controls will always thwart such an effort. It is still an interesting concept philosophically, and worthy of consideration. I'm not too sure where the line is between a well being catalysis metric and old fashioned utils. It is well understood that people can over or under pay for the utility of their purchases.
crote 4y ago
And that is exactly what New Zealand started doing in 2019[0]. A large problem with metrics is that they have a tendency of becoming a goal of their own. Instead of them being used as mere indicators, we end up with entire countries whose sole goal is to eternally increase their GDP - to the extent that it ends up harming the general population. People do not solely exist to generate revenue, and it is about time we stop pretending they do. [0]: https://www.forbes.com/sites/jamesellsmoor/2019/07/11/new-zealand-ditches-gdp-for-happiness-and-wellbeing/ https://www.forbes.com/sites/jamesellsmoor/2019/07/11/new-ze...
- nerdponx 4y ago
  Part of the issue (at least in public discourse) seems to be the conflation of "revenue" in the narrow sense of being measured in money, with "utility" or "value" or "welfare" in the broad sense.
- warpeggio 4y ago
  > A large problem with metrics is that they have a tendency of becoming a goal of their own. I read this in Project to Product: "As companies get larger and more complex, there’s a tendency to manage to proxies. This comes in many shapes and sizes, and it’s dangerous, subtle, and very Day 2. A common example is process as proxy. Good process serves you so you can serve customers. But if you’re not watchful, the process can become the thing. This can happen very easily in large organizations. The process becomes the proxy for the result you want. You stop looking at outcomes and just make sure you’re doing the process right." --Jeff Bezos
  - Nition 4y ago
    "It is possible, after a while, to develop certain dangerous habits of thought. One is that, while all important enterprises need careful organization, it is the organization that needs organizing, rather than the enterprise." - Terry Pratchett, from Thief of Time (2001)
- s1artibartfast 4y ago
  I don't think New Zealand has stopped calculating GDP. They do both now
ySocMedia 4y ago
lisper 4y ago
> So — suppose we give this sort of combined well-being survey to a random sample of people, and also measure what products and services they've used and purchased. From this dataset, we could make reasonable statistical inferences about the amount of well-being increase or decrease associated with a certain product or service among a certain class of people. Unfortunately, no, you can't. There are lots and lots of problems. Just a few off the top of my head: 1. The effects of products are not uniform across the population. Alcohol, for example, catalyzes well-being for some people, but for others it has a dramatic negative effect. 2. The effects of consumption on well-being change with the time horizon over which you measure them. Eating ice cream might improve my subjective well-being today, but harm it tomorrow when it has a deleterious effect on my health. 3. Externalities. Owning a private jet might improve my subjective well-being, but harm everyone else's with its noise and emissions. Measuring economic output is actually a not-entirely-unreasonable proxy for measuring well-being because in a free market people presumably make rational choices and spend their money in a way that maximizes their well-being. The problem is not that the proxy is wrong, the problem is that people turn out not to be very good at making these choices. It's not entirely their fault. A big part of the problem is information asymmetry: producers know a lot more about the potential negative outcomes of their products than consumers do. I think a much better way to tackle this problem is with education and stronger consumer disclosure laws rather than trying to change the metric to something as poorly defined as "well-being catalysis".
- kmacdough 4y ago
  Whether or not well-being is as easy to measur, your assumptions about free-market as a stand-in for well-being does not have a solid foundation. > in a free market people presumably make rational choices and spend their money in a way that maximizes their well-being. There is no particular reason to presume this is true, and many reasons to presume it is not. Psychology is littered with well-demonstrated examples of humans acting against self-interest. 1) People are consistently willing to incur personal cost for the benefit of a perceived community, and are even willing to incur personal cost to punish those working against it. Community recognition is not required to observe this behavior. 2) People are quite susceptible to marketing. The history of the American tobacco industry is a great example. The assumption that self-interested rational entities leads to a healthy or productive society has been similarly discredited. The Honduran Free Trade zones and Eddie Lampert's catastrophic reorganization of Sears are great counterexamples.
nickpp 4y ago
Go ahead. Then let us know when a neighbor with an actual economy and army invades your country. The last 3 years have thought us that you can't live in a dream world. There is a reality and it will bite you in the a**.
nottorp 4y ago
Another subscribe popup with no close...
engineer_22 4y ago
"We should not measure Economic Productivity" isn't a great start. Increasing well-being is a laudable goal, but it's nebulous in concept and in specifics even more tricky. "Well being" belongs in the world of political or philisophical discourse, but as a basis for economic planning is probably not going to be useful. But now that we mention politics, we already have proxies for measurement of well-being. In western democracies the people vote for the politicians (or policies) that they believe will increase their well-being. So the polls and vote tallies are one form of measurement. One of the government's roles, as policy maker, is to balance the needs of the people with the ability to provide those needs.
- giraffe_lady 4y ago
  The first part of this just boils down to "it's hard" and the second is a pure fantasy description of how governments are maybe supposed to work but none ever has in precisely that way. These are both useful lines of reasoning in some conquests but I don't find them so in this one.
- ralph84 4y ago
  Only a minority of the people living in the US are registered to vote. An even smaller minority actually vote. A vanishingly smaller minority decides who is on the ballot via campaign contributions. Not sure voting results are a proxy of anything for the majority of people.
  - Slava_Propanei 4y ago
    [dead]
- ySocMedia 4y ago
  Numerous studies have spent 10s of millions trying to determine which leadership style and which technology made workers more economically productive. The result was always too many variables creating an impenetrable mess of logic with no practical value. The research was almost unproductive economic activity except it made the researchers realize we are terrible at macro level measure of anything but movement of literal things. Inferring numbers today from past economic truth is not intelligent guidance but biasing inequality into the system from past imperialism. A whole lot of our rich would not be without our government meddling. What I don’t need is government pissing off the world to normalize business conditions for aristocrats who don’t do real work of keeping themselves alive.
alexfromapex 4y ago
It's funny, I commented about this a few months back saying happiness is a better indicator than GDP and people were so offended by the mere suggestion. Edit: Clearly no one is offended, hyperbole is a lost art form, and happiness is at all-time highs judging by the responses I got.
- robertlagrant 4y ago
  > people were so offended by the mere suggestion That seems a large stretch when describing someone called "blocked_again" asking "is this sarcasm?"
  - alexfromapex 4y ago
    I don't think it's a stretch, asking if it's sarcasm is a pretty charged response.
    - pessimizer 4y ago
      "People" is the stretch, if it was "person."
      - robertlagrant 4y ago
        Also, no one appeared to be offended.
        alexfromapex 4y ago
        Shall we argue about something we can only speculate about?
        robertlagrant 4y ago
        I don't think there's an argument for what you were saying. If you disagree, feel free to justify. You keep replying, so I'm curious as to where you want to go with this.
im3w1l 4y ago
The issue with GDP-replacements is that GDP is a good proxy for many things, not just one. GDP / capita is a proxy for well being. GDP is a proxy for how credit worthy a country is. It's good proxy for how well a country could wage war if they switched to war economy. It's proxy for how much slack there is in the system that could be used to deal with bad times.
Closi 4y ago
Funnily enough when you look at the countries in the 'happiness index' they all happen to be countries which fundamentally have pretty good underlying economies (and often they tend to be from european countries that have decent social support structure). Well-being is probably a third-order effect from a strong economy, good healthcare / social care, culture and a variety of other factors. But because it is a third-order it is very hard to measure the impact of policy, because: * They are 'arms length' from policy changes. * The indexes are slow to respond to changes. * They are noisy and affected by unrelated factors (i.e. does a colder winter decrease happiness?) * A policy which improves well-being today could very well decrease well-being far into the future (e.g. increasing a countries spending and decreasing tax).
- moffkalast 4y ago
  > (e.g. increasing a countries spending and decreasing tax) That one's hardly far into the future, more like the next election cycle. Policies that improve well being today and screw us in the far future would be more like resource depletion, pollution, ecological destruction.
  - s1artibartfast 4y ago
    Not all that's to the Future are negative expected value. The difficulty and nuances figuring out which are and which are not
- photochemsyn 4y ago
  How does one obtain a realistic and reliable measure of the 'happiness index' for any particular country? I imagine this is something that's subject to massive propaganda efforts (for example, East Germany attempted to keep its suicide rate hidden from view, at least according to the movie 'The Lives of Others').
  - PeterisP 4y ago
    It's tricky - also because it's very hard to aggregate 'happiness'; for economy you can reasonably get the total and just calculate an average, but any 'happiness' measure inherently has to be bottom-up and then the differences between subpopulations in a single country become critical. Like, someone can compare their well-being at San Francisco versus Paris and see which one is better but that would be a comparison of well-being for them which won't necessarily hold for Parisians and SanFranciscans of a different income level or with different cultural values - while wealth can be compared directly in a mostly objective manner (e.g. adjusting for purchasing parity).
xnx 4y ago
Without reading the page, I'm going to assume I'm better off reading linked topics from Wikipedia like https://en.wikipedia.org/wiki/Gross_National_Well-being https://en.wikipedia.org/wiki/Gross_National_Well-being
lordnacho 4y ago
I suspect one of the main things you'd figure out is that wealthy people are inefficiently turning their wealth into well being. I know some people with generational wealth who don't seem to be significantly more happy than your average Joe. OTOH there's also going to be a lot of poor people that we can justify in not helping as they are already happier than you'd think from a consumption point of view. Indeed people I know at the bottom of the income scale don't seem to be any different in terms of perceived well being. There's been some research I've heard of in the area about people who won the lottery or have some life altering accident, somehow nothing changes how happy they are in the long run. Wonder if the evidence still supports that.
- circlefavshape 4y ago
  > Wonder if the evidence still supports that It doesn't. Bereavement, disability, unemployment all make people less happy over the long term https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4235657/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4235657/
- fleddr 4y ago
  It makes sense that when you take consumption into overdrive, you don't gain much happiness. You can pay a 1000$ for a meal, but it won't taste a 100 times better than my 10$ meal. You can build a house with 20 bedrooms but you can still only sleep in one, and you've just created a new problem to manage: cleaning all of them. You can buy a 1$ million car but it's not a 100 times more comfortable or faster, nor does it do anything in a traffic jam. It'll bore you after 2 weeks as it becomes the new normal.
andrewmutz 4y ago
We do measure well-being and happiness, and the statistics are very interesting: https://ourworldindata.org/happiness-and-life-satisfaction https://ourworldindata.org/happiness-and-life-satisfaction Some highlights: -National income and national happiness are different, but are positively correlated -Average levels of happiness have been rising internationally for decades, with the notable exception of the united states -While economic inequality has been rising in countries like the US, happiness inequality has been falling. From a happiness perspective, our lives are less unequal than they were decades ago.
- s1artibartfast 4y ago
  The most interesting Insight from the US data is that happiness is very poorly tied to how much people actually have, and more tied to perceptions of where they stand relative to others. It is like the classic experiment of a monkey being outraged when given less treats than another monkey, despite having more treats than they otherwise would have. It is all tied to expectations
  - criddell 4y ago
    I think it's also tied to the innate sense of fairness we seem to have. For example, if everybody where you work gets a 20% year end bonus and you get a 5% bonus you would probably be unhappy even though you got a bonus.
    - s1artibartfast 4y ago
      I basically agree. I think it is tied to the expectation of fairness and the perception of fairness. If you expect to get the same bonus, and you perceive you were slighted, you will probably be unhappy. Perspective plays a huge part. That's not to say people don't have valid grievances, but there is a huge amount of cognitive dissonance, and large gaps between expectations and reality. Take the parent example of US inequality. Low earners are unhappy that they make so much less than US high earners. Well that's unfair! However, they certainly don't gain much comfort by being a high earner globally. That's not unfair, that is deserved!
throwaway-blaze 4y ago
It seems fundamental to the human condition that working on something (whether mastering the creation of artistic work, building businesses, becoming an amazing teacher, literally any productive use of time) is what drives true happiness. Once a society largely moves beyond Maslow's hierarchy, the ability to productively work on something of your choosing, whether as your main job or as a hobby/side gig is what brings passion and meaning to life. Being paid in some way for this work is one way for people to support the creator/teacher/builder. This will add to economic activity and continue to grow the economic pie. No one looks back on their life and wishes they spent more time laying on the couch. So while economic productivity/growth is a crude measure for sure, it might be the best one we've found so far.
- Gormo 4y ago
  I'm not sure it's ever appropriate to speculate on what elements of life drive happiness for other people. Everything everyone does is by definition in pursuit of satisfying some internal motivation, and it doesn't seem reasonable to me to second-guess other people's choices for the purpose of optimizing their happiness against external criteria -- only for the purpose of preventing externalities that harm our own pursuit of happiness. Attempting to create macro-scale metrics that attempt to approximate the optimality of of individuals' subjective experience, rather than measuring objective consequences of their manifest behavior -- like their actual economic activity -- seems both too abstract to be useful and too susceptible to manipulation by those with ulterior motives. So I agree that economic productivity is the best measure, but for quite different reasons.
- bandyaboot 4y ago
  > No one looks back on their life and wishes they spent more time laying on the couch. Clearly true. Now, how many people look back on their life and wish they had spent more time building their business rather than spending time with family, friends, etc? Even more fundamental to the human condition is our social nature. Living a life that prioritizes that is what drives true happiness.
  - csdvrx 4y ago
this15testing 4y ago
it's interesting seeing our intentional or subconscious goal of "dominating" nature disconnect us further from the planetary systems that we are a part of. The economy and money was invented by us. Putting the economy's well-being in front of the human's or the earth's was very plainly a mistake.
photochemsyn 4y ago
Great article, lots of food for thought. The only thing that seems to be left out is agricultural productivity, which is fairly closely related to ecological productivity. Economics would be a more reliable field if it incorporated the work of people like the founder of ecological studies, G. Evelyn Hutchinson: https://yalealumnimagazine.org/articles/4200-the-founder-of-modern-ecology https://yalealumnimagazine.org/articles/4200-the-founder-of-... This becomes even more relevant as the global human population starts running up against basic resource constraints in many places.
- 1234letshaveatw 4y ago
  isn't it an inverse relationship? To make an acre of land arable you have to destroy an acre of "virgin" ecology?
LatteLazy 4y ago
People don't want to be happy or well. They want to hoard wealth and hate their fellow man. This is the sad truth that western democratic capitalism reveals :(
liampulles 4y ago
I want the government to be accountable to a metric they can't fernagle with. Something that can be compared to years previous, and nations varied. I'm not sure well being metrics currently (or perhaps can ever even in principle) fit the bill.
- akomtu 4y ago
  If you ever become so powerful that you can dictate what the gov of a 350 mln nation should do, you'll find it difficult to constrain yourself with a made up metric that you "can't fernangle with".
inawarminister 4y ago
Ah, but economics as a science do care about Utility. That is, well-being and happiness of a person, as an agent in the economy. The main issue is how to measure it properly?
vadertemp 4y ago
The Human Development Index is another measure that was developed as a result of similar reasoning back in the 90's, specially accounting for such development in the third world.
karaterobot 4y ago
> The point is not that these measures give us a perfect way to measure human well-being, but rather that they give us a decent stab at it, which is definitely worth taking. The old motte-and-bailey tactic, nice! If he thinks productivity metrics are "voodoo", wait til he learns more about those measurements of happiness and well-being. It hurts that we don't have a good way to measure well-being rigorously and consistently, but given that we do not it seems like step one should be to get to the point where we can do that, and only then should we consider whether we should replace existing measurements and paradigms with it.
theptip 4y ago
I think I agree with the central premise, that labor productivity is (and is increasingly) a wacky metric. I’m not sure GDP is as wacky right now, e.g. https://omnibudsman.substack.com/p/all-poverty-is-energy-poverty https://omnibudsman.substack.com/p/all-poverty-is-energy-pov... I do strongly agree that we should be clear that we care about GDP because it lets us buy more quality of life (in many cases, literally more life), and if GDP diverged from providing that we should stop caring about GDP I’m not sure I buy that the right metric is hedonic well-being though; the issues with Mills’ Hedonic Utilitarianism are well-known, and I don’t want to prescribe heroin or wireheading for everyone to maximize their subjective happiness. I think some metric of Eudaimonic Utility is probably more what we want. What are the factors of human flourishing? How do we measure and improve those? Things like health, education (in the broadest sense including trades/crafts), economic security/opportunity, physical safety, community, etc. One can easily imagine higher-GDP configurations that trample most of the populace on the above, and we should not choose those merely because “growth is good”.
jawadch93 4y ago
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titanomachy 4y ago
Below a graph showing 2% growth year over year: "The lack of exponential increase in labor productivity is sometimes used as an argument that tech innovation has slowed down in recent decades..." Steady two-percent growth is exponential growth. The "exponent" is 1.02.
m0llusk 4y ago
Measuring possible benefits seems like a good idea. Well being turns out to be complex with multiple factors. For example, happiness itself is rather shallow. Satisfaction is related but less fickle and may be more closely related to what people think of as well being. Having a bunch of such related metrics would allow comparison that could lead to optimization or risk reduction.
WanderPanda 4y ago
Why do people always leave out the time preference in these analyses? It is soo important, especially in countries with non uniform (age-wise) demographies. It‘s easy to completely discount the future and and spend all you‘re resources to be happy short term
chatterhead 4y ago
The biggest reason it's difficult to measure productivity is because the corporate incentive structure is not based around producing profit; it's based around generating gross revenue to justify over-inflated WS estimates of value so C-suit executives can sell their quarterly share distributions at higher prices than the quarter before. That's fucking it.
JamesBarney 4y ago
4 sections on how it's tricky to measure economic productivity. One tiny section on how easy it would be to run an economy wide correlational well being study with product use, whole ignoring the multitude of problems with that. The biggest one being correlational data is mostly trash.
dalbasal 4y ago
Idk... We have a tendency to use indicators irresponsibly. Economic productivity measures can be useful for understanding specific circumstances, like the output of an industrial sector. The broader and more abstract we extend them, the more unmoored it's meaning. This is also true if we'll being measures, probably.
president 4y ago
This assumes a utopia where all humans are friendly and all countries are at peace. Well-being is great but economic and capital is what gives you power and security. It gives you technology, defense, and weapons. In other words, when your economic power declines, it gives hostile foreign nations with more money (power) to dominate or invade you.
- pbhjpbhj 4y ago
  It's not at all at country scale though. Who in Russia wants to attack Ukraine and isn't an oligarch seeking to exploit the people living there (or mentally ill)?
3qz 4y ago
This is dumb. We measure productivity because that’s what the people with the power to choose the important metrics care about. There’s no “we” that gets to choose anything! They don’t care about your wellbeing and would happily make you eat bugs if it meant their favourite numbers would go in the right direction.
- archon1410 4y ago
  Hey, bug eating can be fun from a well-being perspective too. Some utilitarians will make you eat bugs of it meant their favourite numbers (yes, your well-being is a number) would go in the right direction. But it probably isn't, maybe a vegan diet is what the utilitarians recommend.
  - 3qz 4y ago
    I will not eat the bugs
- seabriez 4y ago
  I disagree here. I think this change is necessary for society to evolve. Society is not a static thing and just because things have been done a certain way, doesn't mean it is right. My suspicion is we are doing many things wrong, electricity hasn't even been invented for much more than 100 years, yet we organize ourselves in a similar way as we have been for millennia. If we do need to change, then what? Well-being may be a great measure, in fact I think it may be the only measure. There are many concerns like gaming, lying, or corruption. But I think with the challenges can be minimized; why? Well induction, if we had this current economic system with all it's faults work, then why can't well-being be another metric? Moreover, I think this is exactly the step we need to make because part of the reason this earth is dying is because humans have prioritized materialistic exploitation. We need to move on from those notions, and if well-being is the new metric, then that sounds great to me.
- jacobolus 4y ago
  Except for arbitrary cultural conditioning, there’s really nothing wrong with eating bugs. People who live in the forest eat bugs all the time. At industrial scale I could well believe that bugs would be a better food source than some of our current staples, and if bugs were cheaply available and other foods had all of their external costs priced in, I could imagine substantial numbers of city dwellers choosing to eat bugs. (Which is not to say that anyone should be forced to eat any particular food.)
lkrubner 4y ago
Just to be clear, we need to measure inflation, and therefore, by accident, we end up measuring productivity. Here is a simplified example: The nominal money GDP increases by 6% Population increases by 1.5% That leaves 4.5% that is either inflation or productivity. If we determine that inflation was 3% then we know that productivity grew by 1.5%. We don't necessarily aim to measure productivity (I mean, we do, but even if we did not) we would still end up with a productivity number, once we had subtracted out population growth and inflation.
huitzitziltzin 4y ago
This site would not be the same without a daily dose of uninformed commentary on economics! In this case from a guy who (with a straight face?!?) says “…as The Singularity approaches” ! Wow. Productivity measurement is hard. The author points to many of the difficulties. We (economists) have been aware of many of these difficulties since the 1930’s or earlier. No one in this literature thinks “hedonic adjustments get it exactly right!” to take just one example. Instead they think more along the lines of: this is the best solution we can come up with to this very hard problem. For an informed, recent survey of the difficulties and the importance of getting these questions right, try Syversen and De Loecker’s survey “an industrial organization perspective on productivity” from the recent Handbook of Industrial Organization, available for free via the NBER working paper series. Why might you care? Here is one fact from that survey: within a narrowly defined industry category, the difference in measured output from the 5th to the 95th percentiles of the productivity distribution can be a factor of 2! To emphasize: two firms with the same measured inputs, but one produces twice as much output than the other. This is visible across many industry categories. It’s a fascinating problem and well worthy of study. The original author should probably also read “the sad truth about happiness scales” from the Journal of Political Economy in 2019. Such scales are unidentified in quite a fundamental way and the results they give are essentially meaningless.
- AnimalMuppet 4y ago
  > The original author should probably also read “the sad truth about happiness scales” from the Journal of Political Economy in 2019. Such scales are unidentified in quite a fundamental way and the results they give are essentially meaningless. Yeah. If we're failing at measuring productivity, are we going to succeed at accurately measuring well-being? Not likely.
  - pbhjpbhj 4y ago
    Perhaps, accepting the imperfections it is better to try to optimise for happiness, even if the optimisation can only be judged as to whether they're generally heading in the right direction ... perhaps if imperfect measures of happiness are improving then life improves for the many in a way that doesn't improve by measures which reflect mainly financial aspects of society. You can make a rich person 100 times richer and overall prosperity is probably decreasing. But you can't really make someone 100x happier (especial if there already relatively happy), all that money maybe made the rich person 1.0001x happier (or even <1x). Seems like given this sort of difference in happiness and financial wealth measuring the latter has a built in aspect of relative equality. For those who care about creating societies that benefit the whole population, this is an enticing possibility.
wallfacer120 4y ago
Oh man, that's so true. And a universal definition of "well-being" is super easy. It's just like, things that are good you know? Not bad things but good things. A new society is possible.
andrewla 4y ago
We should stop failing to measure economic productivity, but instead of switching to failing to measure well-being we should just stop fetishizing the idea of measuring macroeconomic or sociological phenomena. The economic metric treadmill looks something like "we want to measure 'economic productivity', which is a term that has a colloquial meaning". Second, create a formal definition that almost, but not quite, matches the colloquial meaning. Third, try to measure it in the past using available proxy metrics. Fourth, try to measure it in the present using new proxy metrics. Fifth, try to measure it in the future by introducing new measurements. The sixth and most complex phase is to stitch together all those measurements as though they are measuring the same thing, and then via sleight of hand to use the colloquial meaning of the name of the metric to derive some sort of conclusion. Now we get to play the game of repeating steps 3, 4, and 5 in order to draw interesting and new conclusions, and best of all, to try to guide policy decisions to increase "economic productivity" by instead guiding policy decisions to increase the metric for "economic productivity", yielding results that are invariably nonsensical. Once you see this pattern it becomes impossible to not see it everywhere in econometric research. Even things like "GDP" or "DJIA" are insanely stitched-together pseudo-metrics that we just pretend are actually measuring something but are completely disconnected from reality because of their use in policy-making.
ummonk 4y ago
Lol author complains about voodoo measurements but then proposes a much more voodoo measurement.
tkk23 4y ago
Bhutan is a country that does improve on well-being. They measure Gross National Happiness (GNH). That should give a first approximation of the potential of that idea. https://en.wikipedia.org/wiki/Gross_National_Happiness https://en.wikipedia.org/wiki/Gross_National_Happiness
hbrn 4y ago
GDP is the worst form of measurement, except for all others.
janef0421 4y ago
Using any sort of aggregate metric is probably a bad idea, as you're losing too much information to generate useful results. It's a better idea to identify particular deficiencies in economic production, such as poor appliance lifespan or lack of suitable housing, and assign specialised teams to address those deficiencies, with a central committee coordinating between those teams.
hitpointdrew 4y ago
I wouldn't say that "Measuring Economic Productivity Is Pretty Much Bullshit" as the author says. Measuring economic productivity is fine, as long as that isn't your end-all, be-all. I certainly think that how we measure GDP should be radically changed and economic productivity should be a SMALL piece of GDP, but not the entire damn thing.
fulafel 4y ago
The premise is that we don't do measures of well-being but there doesn't seem to be anything to back this up in the article? There are well known measures like the HDI, various life satisfaction components in gallups, OECD better life index etc. It seems to me a better policy argument would be emphasize these over productivity, or maybe propose to improve the measures in some way if warranted.
deleted 4y ago
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rr888 4y ago
The happiest people I've seeen are the ones with the biggest families. Lots of siblings, cousins, aunties & uncles and of course grand children. Perhaps this is the best measure for how successful a country is.
tuatoru 4y ago
The idea of measuring well-being comes at least in part from the work of the economist Amartya Sen, whose most famous work is his book Development As Freedom. Sen's work, in turn, has its philosophical ground in the work of Martha Nussbaum on "capability based ethics". The capabilities approach, by keeping things local, tries to avoid requiring that different cultures all have the same values as tends to happen with utilitarian approaches and materialism. 1. https://daily-philosophy.com/martha-nussbaum-and-the-capabilities-approach/ https://daily-philosophy.com/martha-nussbaum-and-the-capabil...
- jph 4y ago
  Upvote because Martha Nussbaum is IMHO the #1 living philosopher working toward real-world real-life improvements for billions of people. Her work on capability ethics helps guide entire countries in their policies, and helps guide the United Nations as well. Here is her list of the ten most-important capabilities and a brief description of each: https://daily-philosophy.com/martha-nussbaum-and-the-capabilities-approach/ https://daily-philosophy.com/martha-nussbaum-and-the-capabil...
lazide 4y ago
You know, it’s getting to the point where any spiel, headline, whatever with ‘should’ in it I’ll automatically ignore, as it’s almost always impractical for a number of reasons which they always gloss over. ‘We get X if we measure Y with Z side-effects’ however? I can only get so excited.
- UncleEntity 4y ago
  The biggest miss is the majority of people would be a lot happier if they didn’t have to work to be able to do the things they enjoy but could just do the things they enjoy. The disutility of labor or somesuch thing.
  - lazide 4y ago
    Sure, but evolution doesn’t give 2 shits if we’re happy or not, let alone competitive forces. Somewhere in the middle is where the ‘rubber meets the road’ and all.
fleddr 4y ago
Think of the economy as a machine that needs to keep going. It doesn't really care about what keeps it going for as long as it keeps going. In fact, it doesn't even care about the production of value either. You'll see this in consumption culture, specifically of non-essentials. Consumption for the sake of consumption, fueled by non-stop marketing. Going into a mall and buying lots of useless shit. Or the online version of it. You'll also see it in work culture. It is of absolute vital importance that you have a job, but absolutely nobody cares about whether its adds value. The only requirement is that money changes hands, irrespective of "value" or "well-being". Somebody once said that roughly 50% of our economy is effectively just keeping each other busy. Isn't it highly suspicious how decades of improvements in economic productivity have always converted to "more stuff" but not once have improved work conditions? Say, shorter work days/weeks? That would do a lot for "well-being" but is obviously not the point of our economy. There isn't really a point other than to keep it going. If there's no point, no metric makes sense.
pier25 4y ago
That's what the current Mexican president says but it's a really a way to dismiss the economic disasters of his government. There's really no happiness without fulfilling basic human needs like health, education, security, etc. That cannot be achieved without a healthy economy. It's very easy for someone living in a "first world" country to take fundamental stuff for granted. I know I did before moving from Europe to Mexico years ago.
Slava_Propanei 4y ago
stereoradonc 4y ago
It's always easy to propose alternative ideas when everything else is going "good".
rongopo 4y ago
The hardest part is how to project measurements of well-being into the future.
rongopo 4y ago
I'm getting scared about people trying to relate cultural homogeneity with happiness in these threads, sorry. Homogeneity is boring.
rongopo 4y ago
Well-being is not happiness, it is just a condition for it.

321 points by nickt 4y ago

dr_dshiv 4y ago

WRT “AI for Wellbeing,” what research is taking place today?

angusturner 4y ago
Only tangentially related, but there is some cool work on using reinforcement learning to learn an optimal tax rate. See: “AI Economist”.

filbo 4y ago

WRT Human well being, what research is being undertaken today?

s1artibartfast 4y ago
Vast amounts of knowledge are continually generated about what leads to human well being, both scientifically and culturally. The real challenge IMHO, is that most people don't like the answers or want to make improvements.
- filbo 4y ago
  The conglomerate of Tinder Match Bumble etc is producing vast amount of data on Human desires. We should mine that.
  - RockingGoodNite 4y ago
    The opposite sex. Done.
    - filbo 4y ago
      Don't forget the pets.
- Bakary 4y ago
  What are some examples of answers that the public does not like?
  - s1artibartfast 4y ago
    It is hard to buy happiness. Building and maintaining social connections is very important. Exercise and healthy diet are very important. Personally helping others is very rewarding. Comparing yourself to others is very detrimental. Fixating on things and people you dislike is very detrimental. Most of these are things that people are told as a child and struggle to do. Most of them you can't buy, outsource, or regulate. My personal axe I like grinding is TV. The average American watches 20+ hours of TV a week. On average, I don't think it helps their long term happiness and I don't think it is restful. I think most people would be happier if they literally stared at a wall or slept instead, let alone if they did some of the things I listed above.
    - Bakary 4y ago
      I actually stopped watching TV because of a series of insights I discovered via HN. https://adam.nz/2001/zen-tv-experiment/ https://adam.nz/2001/zen-tv-experiment/ I don't agree with everything written in that essay and reject the Zen aspect but it was definitely a life-changing moment for me.

s1artibartfast 4y ago

Interesting idea but I am very skeptical that you could collect enough data on people to tease out how much their new toaster or app is contributing to their well-being. Self selection and lack of random controls will always thwart such an effort. It is still an interesting concept philosophically, and worthy of consideration. I'm not too sure where the line is between a well being catalysis metric and old fashioned utils. It is well understood that people can over or under pay for the utility of their purchases.

crote 4y ago

And that is exactly what New Zealand started doing in 2019[0]. A large problem with metrics is that they have a tendency of becoming a goal of their own. Instead of them being used as mere indicators, we end up with entire countries whose sole goal is to eternally increase their GDP - to the extent that it ends up harming the general population. People do not solely exist to generate revenue, and it is about time we stop pretending they do. [0]: https://www.forbes.com/sites/jamesellsmoor/2019/07/11/new-zealand-ditches-gdp-for-happiness-and-wellbeing/ https://www.forbes.com/sites/jamesellsmoor/2019/07/11/new-ze...

nerdponx 4y ago
Part of the issue (at least in public discourse) seems to be the conflation of "revenue" in the narrow sense of being measured in money, with "utility" or "value" or "welfare" in the broad sense.
warpeggio 4y ago
> A large problem with metrics is that they have a tendency of becoming a goal of their own. I read this in Project to Product: "As companies get larger and more complex, there’s a tendency to manage to proxies. This comes in many shapes and sizes, and it’s dangerous, subtle, and very Day 2. A common example is process as proxy. Good process serves you so you can serve customers. But if you’re not watchful, the process can become the thing. This can happen very easily in large organizations. The process becomes the proxy for the result you want. You stop looking at outcomes and just make sure you’re doing the process right." --Jeff Bezos
- Nition 4y ago
  "It is possible, after a while, to develop certain dangerous habits of thought. One is that, while all important enterprises need careful organization, it is the organization that needs organizing, rather than the enterprise." - Terry Pratchett, from Thief of Time (2001)
s1artibartfast 4y ago
I don't think New Zealand has stopped calculating GDP. They do both now

ySocMedia 4y ago

lisper 4y ago

> So — suppose we give this sort of combined well-being survey to a random sample of people, and also measure what products and services they've used and purchased. From this dataset, we could make reasonable statistical inferences about the amount of well-being increase or decrease associated with a certain product or service among a certain class of people. Unfortunately, no, you can't. There are lots and lots of problems. Just a few off the top of my head: 1. The effects of products are not uniform across the population. Alcohol, for example, catalyzes well-being for some people, but for others it has a dramatic negative effect. 2. The effects of consumption on well-being change with the time horizon over which you measure them. Eating ice cream might improve my subjective well-being today, but harm it tomorrow when it has a deleterious effect on my health. 3. Externalities. Owning a private jet might improve my subjective well-being, but harm everyone else's with its noise and emissions. Measuring economic output is actually a not-entirely-unreasonable proxy for measuring well-being because in a free market people presumably make rational choices and spend their money in a way that maximizes their well-being. The problem is not that the proxy is wrong, the problem is that people turn out not to be very good at making these choices. It's not entirely their fault. A big part of the problem is information asymmetry: producers know a lot more about the potential negative outcomes of their products than consumers do. I think a much better way to tackle this problem is with education and stronger consumer disclosure laws rather than trying to change the metric to something as poorly defined as "well-being catalysis".

kmacdough 4y ago
Whether or not well-being is as easy to measur, your assumptions about free-market as a stand-in for well-being does not have a solid foundation. > in a free market people presumably make rational choices and spend their money in a way that maximizes their well-being. There is no particular reason to presume this is true, and many reasons to presume it is not. Psychology is littered with well-demonstrated examples of humans acting against self-interest. 1) People are consistently willing to incur personal cost for the benefit of a perceived community, and are even willing to incur personal cost to punish those working against it. Community recognition is not required to observe this behavior. 2) People are quite susceptible to marketing. The history of the American tobacco industry is a great example. The assumption that self-interested rational entities leads to a healthy or productive society has been similarly discredited. The Honduran Free Trade zones and Eddie Lampert's catastrophic reorganization of Sears are great counterexamples.

nickpp 4y ago

Go ahead. Then let us know when a neighbor with an actual economy and army invades your country. The last 3 years have thought us that you can't live in a dream world. There is a reality and it will bite you in the a**.

nottorp 4y ago

Another subscribe popup with no close...

engineer_22 4y ago

"We should not measure Economic Productivity" isn't a great start. Increasing well-being is a laudable goal, but it's nebulous in concept and in specifics even more tricky. "Well being" belongs in the world of political or philisophical discourse, but as a basis for economic planning is probably not going to be useful. But now that we mention politics, we already have proxies for measurement of well-being. In western democracies the people vote for the politicians (or policies) that they believe will increase their well-being. So the polls and vote tallies are one form of measurement. One of the government's roles, as policy maker, is to balance the needs of the people with the ability to provide those needs.

giraffe_lady 4y ago
The first part of this just boils down to "it's hard" and the second is a pure fantasy description of how governments are maybe supposed to work but none ever has in precisely that way. These are both useful lines of reasoning in some conquests but I don't find them so in this one.
ralph84 4y ago
Only a minority of the people living in the US are registered to vote. An even smaller minority actually vote. A vanishingly smaller minority decides who is on the ballot via campaign contributions. Not sure voting results are a proxy of anything for the majority of people.
- Slava_Propanei 4y ago
  [dead]
ySocMedia 4y ago
Numerous studies have spent 10s of millions trying to determine which leadership style and which technology made workers more economically productive. The result was always too many variables creating an impenetrable mess of logic with no practical value. The research was almost unproductive economic activity except it made the researchers realize we are terrible at macro level measure of anything but movement of literal things. Inferring numbers today from past economic truth is not intelligent guidance but biasing inequality into the system from past imperialism. A whole lot of our rich would not be without our government meddling. What I don’t need is government pissing off the world to normalize business conditions for aristocrats who don’t do real work of keeping themselves alive.

alexfromapex 4y ago

It's funny, I commented about this a few months back saying happiness is a better indicator than GDP and people were so offended by the mere suggestion. Edit: Clearly no one is offended, hyperbole is a lost art form, and happiness is at all-time highs judging by the responses I got.

robertlagrant 4y ago
> people were so offended by the mere suggestion That seems a large stretch when describing someone called "blocked_again" asking "is this sarcasm?"
- alexfromapex 4y ago
  I don't think it's a stretch, asking if it's sarcasm is a pretty charged response.
  - pessimizer 4y ago
    "People" is the stretch, if it was "person."
    - robertlagrant 4y ago
      Also, no one appeared to be offended.
      - alexfromapex 4y ago
        Shall we argue about something we can only speculate about?
        robertlagrant 4y ago
        I don't think there's an argument for what you were saying. If you disagree, feel free to justify. You keep replying, so I'm curious as to where you want to go with this.

im3w1l 4y ago

The issue with GDP-replacements is that GDP is a good proxy for many things, not just one. GDP / capita is a proxy for well being. GDP is a proxy for how credit worthy a country is. It's good proxy for how well a country could wage war if they switched to war economy. It's proxy for how much slack there is in the system that could be used to deal with bad times.

Closi 4y ago

Funnily enough when you look at the countries in the 'happiness index' they all happen to be countries which fundamentally have pretty good underlying economies (and often they tend to be from european countries that have decent social support structure). Well-being is probably a third-order effect from a strong economy, good healthcare / social care, culture and a variety of other factors. But because it is a third-order it is very hard to measure the impact of policy, because: * They are 'arms length' from policy changes. * The indexes are slow to respond to changes. * They are noisy and affected by unrelated factors (i.e. does a colder winter decrease happiness?) * A policy which improves well-being today could very well decrease well-being far into the future (e.g. increasing a countries spending and decreasing tax).

moffkalast 4y ago
> (e.g. increasing a countries spending and decreasing tax) That one's hardly far into the future, more like the next election cycle. Policies that improve well being today and screw us in the far future would be more like resource depletion, pollution, ecological destruction.
- s1artibartfast 4y ago
  Not all that's to the Future are negative expected value. The difficulty and nuances figuring out which are and which are not
photochemsyn 4y ago
How does one obtain a realistic and reliable measure of the 'happiness index' for any particular country? I imagine this is something that's subject to massive propaganda efforts (for example, East Germany attempted to keep its suicide rate hidden from view, at least according to the movie 'The Lives of Others').
- PeterisP 4y ago
  It's tricky - also because it's very hard to aggregate 'happiness'; for economy you can reasonably get the total and just calculate an average, but any 'happiness' measure inherently has to be bottom-up and then the differences between subpopulations in a single country become critical. Like, someone can compare their well-being at San Francisco versus Paris and see which one is better but that would be a comparison of well-being for them which won't necessarily hold for Parisians and SanFranciscans of a different income level or with different cultural values - while wealth can be compared directly in a mostly objective manner (e.g. adjusting for purchasing parity).

xnx 4y ago

Without reading the page, I'm going to assume I'm better off reading linked topics from Wikipedia like https://en.wikipedia.org/wiki/Gross_National_Well-being https://en.wikipedia.org/wiki/Gross_National_Well-being

lordnacho 4y ago

I suspect one of the main things you'd figure out is that wealthy people are inefficiently turning their wealth into well being. I know some people with generational wealth who don't seem to be significantly more happy than your average Joe. OTOH there's also going to be a lot of poor people that we can justify in not helping as they are already happier than you'd think from a consumption point of view. Indeed people I know at the bottom of the income scale don't seem to be any different in terms of perceived well being. There's been some research I've heard of in the area about people who won the lottery or have some life altering accident, somehow nothing changes how happy they are in the long run. Wonder if the evidence still supports that.

circlefavshape 4y ago
> Wonder if the evidence still supports that It doesn't. Bereavement, disability, unemployment all make people less happy over the long term https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4235657/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4235657/
fleddr 4y ago
It makes sense that when you take consumption into overdrive, you don't gain much happiness. You can pay a 1000$ for a meal, but it won't taste a 100 times better than my 10$ meal. You can build a house with 20 bedrooms but you can still only sleep in one, and you've just created a new problem to manage: cleaning all of them. You can buy a 1$ million car but it's not a 100 times more comfortable or faster, nor does it do anything in a traffic jam. It'll bore you after 2 weeks as it becomes the new normal.

andrewmutz 4y ago

We do measure well-being and happiness, and the statistics are very interesting: https://ourworldindata.org/happiness-and-life-satisfaction https://ourworldindata.org/happiness-and-life-satisfaction Some highlights: -National income and national happiness are different, but are positively correlated -Average levels of happiness have been rising internationally for decades, with the notable exception of the united states -While economic inequality has been rising in countries like the US, happiness inequality has been falling. From a happiness perspective, our lives are less unequal than they were decades ago.

s1artibartfast 4y ago
The most interesting Insight from the US data is that happiness is very poorly tied to how much people actually have, and more tied to perceptions of where they stand relative to others. It is like the classic experiment of a monkey being outraged when given less treats than another monkey, despite having more treats than they otherwise would have. It is all tied to expectations
- criddell 4y ago
  I think it's also tied to the innate sense of fairness we seem to have. For example, if everybody where you work gets a 20% year end bonus and you get a 5% bonus you would probably be unhappy even though you got a bonus.
  - s1artibartfast 4y ago
    I basically agree. I think it is tied to the expectation of fairness and the perception of fairness. If you expect to get the same bonus, and you perceive you were slighted, you will probably be unhappy. Perspective plays a huge part. That's not to say people don't have valid grievances, but there is a huge amount of cognitive dissonance, and large gaps between expectations and reality. Take the parent example of US inequality. Low earners are unhappy that they make so much less than US high earners. Well that's unfair! However, they certainly don't gain much comfort by being a high earner globally. That's not unfair, that is deserved!

throwaway-blaze 4y ago

It seems fundamental to the human condition that working on something (whether mastering the creation of artistic work, building businesses, becoming an amazing teacher, literally any productive use of time) is what drives true happiness. Once a society largely moves beyond Maslow's hierarchy, the ability to productively work on something of your choosing, whether as your main job or as a hobby/side gig is what brings passion and meaning to life. Being paid in some way for this work is one way for people to support the creator/teacher/builder. This will add to economic activity and continue to grow the economic pie. No one looks back on their life and wishes they spent more time laying on the couch. So while economic productivity/growth is a crude measure for sure, it might be the best one we've found so far.

Gormo 4y ago
I'm not sure it's ever appropriate to speculate on what elements of life drive happiness for other people. Everything everyone does is by definition in pursuit of satisfying some internal motivation, and it doesn't seem reasonable to me to second-guess other people's choices for the purpose of optimizing their happiness against external criteria -- only for the purpose of preventing externalities that harm our own pursuit of happiness. Attempting to create macro-scale metrics that attempt to approximate the optimality of of individuals' subjective experience, rather than measuring objective consequences of their manifest behavior -- like their actual economic activity -- seems both too abstract to be useful and too susceptible to manipulation by those with ulterior motives. So I agree that economic productivity is the best measure, but for quite different reasons.
bandyaboot 4y ago
> No one looks back on their life and wishes they spent more time laying on the couch. Clearly true. Now, how many people look back on their life and wish they had spent more time building their business rather than spending time with family, friends, etc? Even more fundamental to the human condition is our social nature. Living a life that prioritizes that is what drives true happiness.
- csdvrx 4y ago

this15testing 4y ago

it's interesting seeing our intentional or subconscious goal of "dominating" nature disconnect us further from the planetary systems that we are a part of. The economy and money was invented by us. Putting the economy's well-being in front of the human's or the earth's was very plainly a mistake.

photochemsyn 4y ago

Great article, lots of food for thought. The only thing that seems to be left out is agricultural productivity, which is fairly closely related to ecological productivity. Economics would be a more reliable field if it incorporated the work of people like the founder of ecological studies, G. Evelyn Hutchinson: https://yalealumnimagazine.org/articles/4200-the-founder-of-modern-ecology https://yalealumnimagazine.org/articles/4200-the-founder-of-... This becomes even more relevant as the global human population starts running up against basic resource constraints in many places.

1234letshaveatw 4y ago
isn't it an inverse relationship? To make an acre of land arable you have to destroy an acre of "virgin" ecology?

LatteLazy 4y ago

People don't want to be happy or well. They want to hoard wealth and hate their fellow man. This is the sad truth that western democratic capitalism reveals :(

liampulles 4y ago

I want the government to be accountable to a metric they can't fernagle with. Something that can be compared to years previous, and nations varied. I'm not sure well being metrics currently (or perhaps can ever even in principle) fit the bill.

akomtu 4y ago
If you ever become so powerful that you can dictate what the gov of a 350 mln nation should do, you'll find it difficult to constrain yourself with a made up metric that you "can't fernangle with".

inawarminister 4y ago

Ah, but economics as a science do care about Utility. That is, well-being and happiness of a person, as an agent in the economy. The main issue is how to measure it properly?

vadertemp 4y ago

The Human Development Index is another measure that was developed as a result of similar reasoning back in the 90's, specially accounting for such development in the third world.

karaterobot 4y ago

> The point is not that these measures give us a perfect way to measure human well-being, but rather that they give us a decent stab at it, which is definitely worth taking. The old motte-and-bailey tactic, nice! If he thinks productivity metrics are "voodoo", wait til he learns more about those measurements of happiness and well-being. It hurts that we don't have a good way to measure well-being rigorously and consistently, but given that we do not it seems like step one should be to get to the point where we can do that, and only then should we consider whether we should replace existing measurements and paradigms with it.

theptip 4y ago

I think I agree with the central premise, that labor productivity is (and is increasingly) a wacky metric. I’m not sure GDP is as wacky right now, e.g. https://omnibudsman.substack.com/p/all-poverty-is-energy-poverty https://omnibudsman.substack.com/p/all-poverty-is-energy-pov... I do strongly agree that we should be clear that we care about GDP because it lets us buy more quality of life (in many cases, literally more life), and if GDP diverged from providing that we should stop caring about GDP I’m not sure I buy that the right metric is hedonic well-being though; the issues with Mills’ Hedonic Utilitarianism are well-known, and I don’t want to prescribe heroin or wireheading for everyone to maximize their subjective happiness. I think some metric of Eudaimonic Utility is probably more what we want. What are the factors of human flourishing? How do we measure and improve those? Things like health, education (in the broadest sense including trades/crafts), economic security/opportunity, physical safety, community, etc. One can easily imagine higher-GDP configurations that trample most of the populace on the above, and we should not choose those merely because “growth is good”.

jawadch93 4y ago

[dead]

titanomachy 4y ago

Below a graph showing 2% growth year over year: "The lack of exponential increase in labor productivity is sometimes used as an argument that tech innovation has slowed down in recent decades..." Steady two-percent growth is exponential growth. The "exponent" is 1.02.

m0llusk 4y ago

Measuring possible benefits seems like a good idea. Well being turns out to be complex with multiple factors. For example, happiness itself is rather shallow. Satisfaction is related but less fickle and may be more closely related to what people think of as well being. Having a bunch of such related metrics would allow comparison that could lead to optimization or risk reduction.

WanderPanda 4y ago

Why do people always leave out the time preference in these analyses? It is soo important, especially in countries with non uniform (age-wise) demographies. It‘s easy to completely discount the future and and spend all you‘re resources to be happy short term

chatterhead 4y ago

The biggest reason it's difficult to measure productivity is because the corporate incentive structure is not based around producing profit; it's based around generating gross revenue to justify over-inflated WS estimates of value so C-suit executives can sell their quarterly share distributions at higher prices than the quarter before. That's fucking it.

JamesBarney 4y ago

4 sections on how it's tricky to measure economic productivity. One tiny section on how easy it would be to run an economy wide correlational well being study with product use, whole ignoring the multitude of problems with that. The biggest one being correlational data is mostly trash.

dalbasal 4y ago

Idk... We have a tendency to use indicators irresponsibly. Economic productivity measures can be useful for understanding specific circumstances, like the output of an industrial sector. The broader and more abstract we extend them, the more unmoored it's meaning. This is also true if we'll being measures, probably.

president 4y ago

This assumes a utopia where all humans are friendly and all countries are at peace. Well-being is great but economic and capital is what gives you power and security. It gives you technology, defense, and weapons. In other words, when your economic power declines, it gives hostile foreign nations with more money (power) to dominate or invade you.

pbhjpbhj 4y ago
It's not at all at country scale though. Who in Russia wants to attack Ukraine and isn't an oligarch seeking to exploit the people living there (or mentally ill)?

3qz 4y ago

This is dumb. We measure productivity because that’s what the people with the power to choose the important metrics care about. There’s no “we” that gets to choose anything! They don’t care about your wellbeing and would happily make you eat bugs if it meant their favourite numbers would go in the right direction.

archon1410 4y ago
Hey, bug eating can be fun from a well-being perspective too. Some utilitarians will make you eat bugs of it meant their favourite numbers (yes, your well-being is a number) would go in the right direction. But it probably isn't, maybe a vegan diet is what the utilitarians recommend.
- 3qz 4y ago
  I will not eat the bugs
seabriez 4y ago
I disagree here. I think this change is necessary for society to evolve. Society is not a static thing and just because things have been done a certain way, doesn't mean it is right. My suspicion is we are doing many things wrong, electricity hasn't even been invented for much more than 100 years, yet we organize ourselves in a similar way as we have been for millennia. If we do need to change, then what? Well-being may be a great measure, in fact I think it may be the only measure. There are many concerns like gaming, lying, or corruption. But I think with the challenges can be minimized; why? Well induction, if we had this current economic system with all it's faults work, then why can't well-being be another metric? Moreover, I think this is exactly the step we need to make because part of the reason this earth is dying is because humans have prioritized materialistic exploitation. We need to move on from those notions, and if well-being is the new metric, then that sounds great to me.
jacobolus 4y ago
Except for arbitrary cultural conditioning, there’s really nothing wrong with eating bugs. People who live in the forest eat bugs all the time. At industrial scale I could well believe that bugs would be a better food source than some of our current staples, and if bugs were cheaply available and other foods had all of their external costs priced in, I could imagine substantial numbers of city dwellers choosing to eat bugs. (Which is not to say that anyone should be forced to eat any particular food.)

lkrubner 4y ago

Just to be clear, we need to measure inflation, and therefore, by accident, we end up measuring productivity. Here is a simplified example: The nominal money GDP increases by 6% Population increases by 1.5% That leaves 4.5% that is either inflation or productivity. If we determine that inflation was 3% then we know that productivity grew by 1.5%. We don't necessarily aim to measure productivity (I mean, we do, but even if we did not) we would still end up with a productivity number, once we had subtracted out population growth and inflation.

huitzitziltzin 4y ago

This site would not be the same without a daily dose of uninformed commentary on economics! In this case from a guy who (with a straight face?!?) says “…as The Singularity approaches” ! Wow. Productivity measurement is hard. The author points to many of the difficulties. We (economists) have been aware of many of these difficulties since the 1930’s or earlier. No one in this literature thinks “hedonic adjustments get it exactly right!” to take just one example. Instead they think more along the lines of: this is the best solution we can come up with to this very hard problem. For an informed, recent survey of the difficulties and the importance of getting these questions right, try Syversen and De Loecker’s survey “an industrial organization perspective on productivity” from the recent Handbook of Industrial Organization, available for free via the NBER working paper series. Why might you care? Here is one fact from that survey: within a narrowly defined industry category, the difference in measured output from the 5th to the 95th percentiles of the productivity distribution can be a factor of 2! To emphasize: two firms with the same measured inputs, but one produces twice as much output than the other. This is visible across many industry categories. It’s a fascinating problem and well worthy of study. The original author should probably also read “the sad truth about happiness scales” from the Journal of Political Economy in 2019. Such scales are unidentified in quite a fundamental way and the results they give are essentially meaningless.

AnimalMuppet 4y ago
> The original author should probably also read “the sad truth about happiness scales” from the Journal of Political Economy in 2019. Such scales are unidentified in quite a fundamental way and the results they give are essentially meaningless. Yeah. If we're failing at measuring productivity, are we going to succeed at accurately measuring well-being? Not likely.
- pbhjpbhj 4y ago
  Perhaps, accepting the imperfections it is better to try to optimise for happiness, even if the optimisation can only be judged as to whether they're generally heading in the right direction ... perhaps if imperfect measures of happiness are improving then life improves for the many in a way that doesn't improve by measures which reflect mainly financial aspects of society. You can make a rich person 100 times richer and overall prosperity is probably decreasing. But you can't really make someone 100x happier (especial if there already relatively happy), all that money maybe made the rich person 1.0001x happier (or even <1x). Seems like given this sort of difference in happiness and financial wealth measuring the latter has a built in aspect of relative equality. For those who care about creating societies that benefit the whole population, this is an enticing possibility.

wallfacer120 4y ago

Oh man, that's so true. And a universal definition of "well-being" is super easy. It's just like, things that are good you know? Not bad things but good things. A new society is possible.

andrewla 4y ago

We should stop failing to measure economic productivity, but instead of switching to failing to measure well-being we should just stop fetishizing the idea of measuring macroeconomic or sociological phenomena. The economic metric treadmill looks something like "we want to measure 'economic productivity', which is a term that has a colloquial meaning". Second, create a formal definition that almost, but not quite, matches the colloquial meaning. Third, try to measure it in the past using available proxy metrics. Fourth, try to measure it in the present using new proxy metrics. Fifth, try to measure it in the future by introducing new measurements. The sixth and most complex phase is to stitch together all those measurements as though they are measuring the same thing, and then via sleight of hand to use the colloquial meaning of the name of the metric to derive some sort of conclusion. Now we get to play the game of repeating steps 3, 4, and 5 in order to draw interesting and new conclusions, and best of all, to try to guide policy decisions to increase "economic productivity" by instead guiding policy decisions to increase the metric for "economic productivity", yielding results that are invariably nonsensical. Once you see this pattern it becomes impossible to not see it everywhere in econometric research. Even things like "GDP" or "DJIA" are insanely stitched-together pseudo-metrics that we just pretend are actually measuring something but are completely disconnected from reality because of their use in policy-making.

ummonk 4y ago

Lol author complains about voodoo measurements but then proposes a much more voodoo measurement.

tkk23 4y ago

Bhutan is a country that does improve on well-being. They measure Gross National Happiness (GNH). That should give a first approximation of the potential of that idea. https://en.wikipedia.org/wiki/Gross_National_Happiness https://en.wikipedia.org/wiki/Gross_National_Happiness

hbrn 4y ago

GDP is the worst form of measurement, except for all others.

janef0421 4y ago

Using any sort of aggregate metric is probably a bad idea, as you're losing too much information to generate useful results. It's a better idea to identify particular deficiencies in economic production, such as poor appliance lifespan or lack of suitable housing, and assign specialised teams to address those deficiencies, with a central committee coordinating between those teams.

hitpointdrew 4y ago

I wouldn't say that "Measuring Economic Productivity Is Pretty Much Bullshit" as the author says. Measuring economic productivity is fine, as long as that isn't your end-all, be-all. I certainly think that how we measure GDP should be radically changed and economic productivity should be a SMALL piece of GDP, but not the entire damn thing.

fulafel 4y ago

The premise is that we don't do measures of well-being but there doesn't seem to be anything to back this up in the article? There are well known measures like the HDI, various life satisfaction components in gallups, OECD better life index etc. It seems to me a better policy argument would be emphasize these over productivity, or maybe propose to improve the measures in some way if warranted.

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rr888 4y ago

The happiest people I've seeen are the ones with the biggest families. Lots of siblings, cousins, aunties & uncles and of course grand children. Perhaps this is the best measure for how successful a country is.

tuatoru 4y ago

The idea of measuring well-being comes at least in part from the work of the economist Amartya Sen, whose most famous work is his book Development As Freedom. Sen's work, in turn, has its philosophical ground in the work of Martha Nussbaum on "capability based ethics". The capabilities approach, by keeping things local, tries to avoid requiring that different cultures all have the same values as tends to happen with utilitarian approaches and materialism. 1. https://daily-philosophy.com/martha-nussbaum-and-the-capabilities-approach/ https://daily-philosophy.com/martha-nussbaum-and-the-capabil...

jph 4y ago
Upvote because Martha Nussbaum is IMHO the #1 living philosopher working toward real-world real-life improvements for billions of people. Her work on capability ethics helps guide entire countries in their policies, and helps guide the United Nations as well. Here is her list of the ten most-important capabilities and a brief description of each: https://daily-philosophy.com/martha-nussbaum-and-the-capabilities-approach/ https://daily-philosophy.com/martha-nussbaum-and-the-capabil...

lazide 4y ago

You know, it’s getting to the point where any spiel, headline, whatever with ‘should’ in it I’ll automatically ignore, as it’s almost always impractical for a number of reasons which they always gloss over. ‘We get X if we measure Y with Z side-effects’ however? I can only get so excited.

UncleEntity 4y ago
The biggest miss is the majority of people would be a lot happier if they didn’t have to work to be able to do the things they enjoy but could just do the things they enjoy. The disutility of labor or somesuch thing.
- lazide 4y ago
  Sure, but evolution doesn’t give 2 shits if we’re happy or not, let alone competitive forces. Somewhere in the middle is where the ‘rubber meets the road’ and all.

fleddr 4y ago

Think of the economy as a machine that needs to keep going. It doesn't really care about what keeps it going for as long as it keeps going. In fact, it doesn't even care about the production of value either. You'll see this in consumption culture, specifically of non-essentials. Consumption for the sake of consumption, fueled by non-stop marketing. Going into a mall and buying lots of useless shit. Or the online version of it. You'll also see it in work culture. It is of absolute vital importance that you have a job, but absolutely nobody cares about whether its adds value. The only requirement is that money changes hands, irrespective of "value" or "well-being". Somebody once said that roughly 50% of our economy is effectively just keeping each other busy. Isn't it highly suspicious how decades of improvements in economic productivity have always converted to "more stuff" but not once have improved work conditions? Say, shorter work days/weeks? That would do a lot for "well-being" but is obviously not the point of our economy. There isn't really a point other than to keep it going. If there's no point, no metric makes sense.

pier25 4y ago

That's what the current Mexican president says but it's a really a way to dismiss the economic disasters of his government. There's really no happiness without fulfilling basic human needs like health, education, security, etc. That cannot be achieved without a healthy economy. It's very easy for someone living in a "first world" country to take fundamental stuff for granted. I know I did before moving from Europe to Mexico years ago.

Slava_Propanei 4y ago

stereoradonc 4y ago

It's always easy to propose alternative ideas when everything else is going "good".

rongopo 4y ago

The hardest part is how to project measurements of well-being into the future.

rongopo 4y ago

I'm getting scared about people trying to relate cultural homogeneity with happiness in these threads, sorry. Homogeneity is boring.

rongopo 4y ago

Well-being is not happiness, it is just a condition for it.