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It's hard to overstate how terrible this idea is. GDP is a concrete measure that is difficult to fake. Once you start arguing about the economic value of volu

• epgui 4y ago
  Is it more unreasonable to assume the value of these things is >0, or to assume that the value of these things is ==0? I don't think anybody is arguing that we should stop measuring or looking at GDP entirely. The article argues that we need to recognize that we can't just close our eyes to the value of these things. It's kind of like talking about the value of a human life in dollars. We know this number is more than 0$, and we know this number is less than __POSITIVE_INFINITY__$, and we're probably never really going to agree on a number somewhere in the middle, but it's still an important number to consider.
  • nostromo 4y ago
    It's more reasonable to say that determining the value of divorce is beyond the scope of GDP.
    • epgui 4y ago
      • ravel-bar-foo 4y ago
        > Did you really read the article? Please don't do this. It's against the rules, doesn't contribute any new insight, and the answer is plain from the conversation: they did. (Divorce stats being included into new metrics of economic health was specifically mentioned in the article and AFAICT not previously in the comments.)
• scotty79 4y ago
  Actually we can get better metrics than GDP by measuring amount of light on satellite night images. It fits GDP more or less for western democracies, but it it better measure for other countries.
  • kelseyfrog 4y ago
    Night light is easy to fake with upward-facing illuminators.
    • ComputerGuru 4y ago
      Any good metric ceases to be meaningful once it’s actually used as a metric, because that’s when the gamification starts.
    • scotty79 4y ago
      It's kinda hard to hide that you are faking it on a national scale. Way easier with GDP.
    • gehwartzen 4y ago
      Additionally the modern trend, in many types of public lighting, is to reduce the amount of light which shines upwards in order to increase efficient and lower light pollution.
      • kelseyfrog 4y ago
        I was hesitant to mention this, but yes, it run counter to widespread initiatives to reduce light pollution
  • quickthrower2 4y ago
    Or perhaps measure other forms of pollution?
  • dirtyid 4y ago
    Possibly, but also assuming it's an actually sophisticated analysis and not an naive one, like the Martinez Democracy vs Autocracy study that western MSM loves to peddle. NBER (one of top eco think tanks) did a sophisticated night lights study of PRC in 2017 - same year as OG Martinez study using naive methodology as Henderson original work from early 2010s - and found PRC's reported GDP was actually _underestimated_ using night light data. But for obvious reasons this study by multiple staff economists at the FED doesn't get any attention in western MSM, but one by an assistent prof of public policy somehow does. Almost as if it's good self marketting considering Martinez keeps updating study with same rudimentary methodology every few years to get clicks.
• dakial1 4y ago
  It is not difficult to fake (e.g. China for the last 20 years). But I agree with you, we should add new metrics (and targets) but keep a GDP as one of them, also for the other indicators to mature (how they are measure, methodologies, transparency, etc...). Maybe one day GDP would be able to be left behind...
  • hnews_account_1 4y ago
    GDP is not what people randomly think it is. It is a measure of the economic output of a country. It isn’t about equality or productivity or did the money build a ghost town etc. If we had the magical mathematics to encode that much in a single number, we’d be traveling the stars.
    • 1dry 4y ago
      I disagree wholeheartedly with the sentiment that "traveling the stars" is a worthy goal, even more worthy than stewardship of the paradise we already have. We are living in heaven. We have a wonderful planet that nurtures us yet we continue to sabotage our favorable situation for the sake of growing worthless numbers like GDP, all while some people starve or are forced into lives of misery. And yes, I have read Parable of the {Sower|Talents}, who's primary lesson I take to be, we should prevent that terrible situation in the first place.
      • nverno 4y ago
        People can track GDP without optimizing for it at the expense of the environment. Although, metrics do seem to hack the human brain in such a way that we can't help but try to optimize them, no matter how useless they are.
        • 1dry 4y ago
          Right, yet we do track all kinds of well-being related metrics, there are happiness indices and the like, yet it seems no one optimizes for them.
      • 4y ago
• svnpenn 4y ago
  > Once you start arguing about the economic value of volunteering, divorce, income inequality, and crime Who is saying we should do that? These items have value, that is not debatable. It might not be economic value, but that's not the point. The point is, these items are not being valued on a national scale, or at least extremely undervalued against GDP. If you have extreme wealth inequality, GDP is a pretty poor measure of basically anything.
• _skel 4y ago
  Seriously. If there was an obvious alternate metric, we'd already be using it. Measuring well-being and happiness will never be straightforward and uncontroversial, despite what the authors of the article say. You don't need to look much past the first few paragraphs of the article to see an obvious bias about income inequality. That reveals what attempts to find new metrics are really about: the authors want to use a set of metrics which have built-in left-wing assumptions about how society ought to look. To think that such controversial metrics could serve as a replacement for GDP only reveals the authors' own naivete.
  • mxkopy 4y ago
    [flagged]
  • robocat 4y ago
    > a set of metrics which have built-in left-wing assumptions Introducing political statements on HN and feeding them is frowned upon, but I will bite: the right wing also needs an answer to the problems caused by inequality. Solving issues caused by inequality can easily be a right wing objective: for example when fixing an issue also helps the middle class or the rich. A metric for inequality can be politically completely neutral, yet it will trigger partisans on the left or right. I do agree that metrics and solutions often have covert political biases. I think that regardless of your political inclination, the core message of the article remains the same.
  • jerojero 4y ago
    There is actually a lot of knowledge that's been built that shows many effects of inequality on societies. It might not seem obvious but inequality is actually a big driving factor in people's feelings of dissatisfaction in their everyday lives. But to argue the point a bit more, and this is something that Thomas Piketty (an economist that studies inequality) always brings in his books: one measure is not enough. GDP is one measure, we need to look at many more measures. GDP does say something, it's not meaningless, but we need other measurements to get the full understanding of the picture. And we actually have lots of them, GDP sadly fails to capture a lot of externalities, so it doesn't really capture very well for example environmental damage; think of china, their GDP is growing a lot but we can all see it's not growing in a sustainable manner. Or think of the USA, highest GDP in the planet but this isn't being reflected in life expectancy for example which actually has been declining for a while now. And as I said in the beginning, inequality very much affects people's well being and the well being of an economy as a whole as well. So it is definitely a measurement that we ought to take seriously. It seems silly to me to say "these are left wing metric". These are metrics that have a reason of being, inequality has real effects on our economies and there is a lot of work, and good work at that, that you can read on why precisely this is the case.
• viburnum 4y ago
  LOL. GDP is fake to begin with.
• Supermancho 4y ago
  > that is difficult to fake. Changing the included values and operands, then calling it a new standard, is common in the US. GDP has been an unreliable metric for decades. I noticed when the multitude of chip fabs, across california, closed down had coincided with the president announcing the stockmarket gains were being rolled into the accounting. I thought it was obvious that it was not a meaningful metric for measuring production.
  • NavinF 4y ago
    > the president announcing the stockmarket gains were being rolled into the accounting Of GDP? Source?
• grecy 4y ago
  > GDP is a concrete measure that is difficult to fake The best counter to that I've ever heard: "Let's say I pay you $10M to eat a pile of shit, then for kicks you pay me $10M to eat a similar pile of shit. You know what the end result is? The GDP has increased $20M, and we both have huge shit-eating grins". The GDP is laughably easy to fake.
  • throwawaylinux 4y ago
    > "Let's say I pay you $10M to eat a pile of shit, then for kicks you pay me $10M to eat a similar pile of shit. You know what the end result is? The GDP has increased $20M, and we both have huge shit-eating grins". If people were buying piles of shit for $10M, then that is what the GDP would be. That's not faking GDP.
    • grecy 4y ago
      No, the shit is free. People are just paying each other to eat it. It’s not literal, it’s just an illustration of how easily the gdp can be faked.
      • throwawaylinux 4y ago
        > No, the shit is free. People are just paying each other to eat it. Still the same answer. Services are counted as production. > It’s not literal, it’s just an illustration of how easily the gdp can be faked. Of course it's not literal, but that's just not faking GDP. What do you actually think GDP is a measurement of?
    • uoaei 4y ago
      This interpretation of GDP requires that price is equivalent to value. Good luck convincing anyone, even hardcore free market essentialists, of that notion.
  • NavinF 4y ago
    LMAO I'm sure that sounded great in your head, but if that service was actually worth 10mm, both parties would have to pay taxes on that income when they report it to the gov't for inclusion in GDP. Yes this applies even if no money changed hands: https://www.irs.gov/taxtopics/tc420 https://www.irs.gov/taxtopics/tc420 And yes there are workarounds, but clearly it's not that easy to manipulate GDP. If anything, you want to underreport these numbers so you don't owe as much.
• jeeeb 4y ago
  > GDP is a concrete measure that is difficult to fake. I’m not sure how true this is. There are international standards, updated over time, with variable adoption by per-country agencies tasked with measuring GDP. These agencies typically rely on surveys of industry specific activity to measure different metrics and at times imputation and inference of unmeasured or missing values to form a picture of overall economic activity, from which a single GDP figure is derived. All of which is to say “measuring” GDP is nothing like measuring a concrete physical quantity such as temperature, and there is ample opportunity to fiddle with the standards or fudge the statistics, either innocently or nefariously. See for example how incorrect construction data cleansing lead to Japan overstating its GDP for several years.
• notacoward 4y ago
  > GDP is a concrete measure that is difficult to fake. It's trivial to fake. Just pull some asset values out of your ass, which Wall Street does a million times a day. GDP became a lot less useful when the economy shifted from mostly tangible goods to mostly intangibles (e.g. software) and services, then utterly useless with the over-financialization of our economy. There are many measures that are more informative than GDP (or GDP per capita), that enable more rational decision making. GDP is just a vanity number.
• neilwilson 4y ago
  "GDP is a concrete measure that is difficult to fake" Government expenditure on services is included in GDP at cost. Transfers to individuals are not. Transfer the same to an individual in return for their hours and it will be included in GDP. Instant boost of GDP with no material change in output. It's very easy to fake because GDP isn't all transfers, it's just some of them and like all dividing lines the one chosen is largely arbitrary.
• wodenokoto 4y ago
  GDP is super easy to fake. Just sell something on the black market. Just trade a service for a service instead of paying for it. Or, to push it in the other direction: sell a service back and forth. I sell you a message for 1 billion and then you sell me one for 1 billion. Now we’ve increased gdp by 2 billion (although you need to live in a zero VAT and zero income tax country to do that as a private person and still have it count)
  • vishnugupta 4y ago
    > you need to live in a zero VAT and zero income tax country Which means GDP is difficult to fake.
• Zigurd 4y ago
  Debatable: https://www.heritage.org/international-economies/commentary/the-problem-false-chinese-economic-data https://www.heritage.org/international-economies/commentary/... https://www.bloomberg.com/news/articles/2022-03-16/china-s-strong-growth-data-questioned-mocked-on-social-media https://www.bloomberg.com/news/articles/2022-03-16/china-s-s...
• neffy 4y ago
  Go back 150 years, and what was tracked was actual production. Iron mined, boats produced etc. GDP is a bad measure for all the reasons above, and because prices do not work the way GDP want's them too. As another poster alluded to, increase total production and cause prices to fall across the board, and the logic of the system is that GDP drops. The only reason we see GDP increasing is that there is an underlying increase in the measurement (money), and that feeds into the measurement data.