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> GDP is generally a pretty decent stat because people tend to pay things to do things that provide them with some sort of value. Only if the net value is posi
by vkou 3y ago
> GDP is generally a pretty decent stat because people tend to pay things to do things that provide them with some sort of value.
Only if the net value is positive-sum.
Setting a city on fire, or giving cancer to a million people, or just going down the street, smashing every parked car's window with a tire iron will likely increase national GDP.
Liekwise, people pay a lot of money for net negative-sum industries - the health insurance industry in the US immediately springs to mind. We'd all be better off without that parasite.
- pfisch 3y agoI mean, we have to pay someone to guarantee coverage in the event of catastrophic losses. You might even call them insurance companies.
- kspacewalk2 3y agoIf only there was a way to have just one of those insurance companies, maybe run as a government agency of sorts... Wait, I got one of those where I live, it's called the Ontario Health Insurance Plan. It is not amazing but it easily clears the extremely low bar of being better than the US health insurance setup. Over in Manitoba they've got one of those for car insurance too. Amazingly, people continue driving there just the same, the government insurance plan never needs subsidies and Manitobans pay way less for insurance. Almost as if the concept of the free market being the best solution for market X needs to be tested once in a while just to be sure, and results may be surprising.
- robertlagrant 3y agoIt's possible for really motivated individuals to run a government department well, if you have people of excellent character, work ethic and competence doing so, but there's not a load of incentive for them to be run well outside of that unlikely combination.
- kspacewalk2 3y agoWell, while we're on the topic of insinuations that totally don't give away underlying biases, it's possible for really ethical individuals to run a number of competing corporations well, though there's not a load of incentive for them to steer clear of regulatory capture, cartel-like collusion and various other forms of customer-screwing behaviour. The larger point being: there are many areas of the economy in which the free market approach is clearly better, and there are many other areas of the economy in which the free market approach is clearly deficient and a government-run agency is superior. Insurance is in neither of these convenient buckets. "Unlikely" is an opinion on a hypothetical; it is not necessary when real-world examples abound.
- samus 3y agoAny market is shaped by policy. It can be argued that the US health insurance market is not really free in significant ways and set up such that the net result is the mess we see. A government-run institution performing better than the private market is not necessarily a sign that the institution is good, it might just mean that the market is set up in a deficient way.
- orwin 3y agoI mean, last time I looked, social security in France gave back 81€ for every 100€ invested. Swisslife (it was either 2018 or 2019) gave back the same year 67€ for every 100€. What's funny is that only 11€ went to shareholders that year, that mean that even w/o capitalists, sometimes public services are more efficient than private companies.
- robertlagrant 3y agoAs I said a few comments above, it's possible for things to be run efficiently; there's just less of an incentive to do so. In terms of this exact comparison - is this like for like? I don't understand it well enough to know.
- robertlagrant 3y ago
- Scoundreller 3y agoToo bad Manitoba guillotined its public telecom. How's Bhell treating you these days?
- vkou 3y agoThe risk pooling isn't the problem, its not why the industry is an unproductive leech on our society. The insane amounts of waste and bureaucracy it produces, and the price inflation it facilitates is. (Not to mention suboptimal health outcomes arising from the perverse incentives it creates.)
- deleted 3y ago[deleted]
- RandomLensman 3y agoNet negative sum would by definition lower GDP.
- vkou 3y agoGDP is a proxy for 'amount of work done that people were paid for'. If I pay Fat Tony to break your legs, and then you pay a doctor to put them back together, this whole adventure increased GDP, but is a net-negative-sum activity. "People have to do more work to accomplish the same amount of results" isn't a worthy goal in itself.
- RandomLensman 3y agoAnd me not working due to broken legs is somehow not relevant to the GDP? My capital being misallocated is not relevant to GDP? I think your example is quite likely to lower GDP...
- orwin 3y agoUnless you earn more than the 200k the doctor was paid plus the 50k Fat Tony rightfully earned, the GDP grew.
- deleted 3y ago[deleted]
- vkou 3y ago> My capital being misallocated is not relevant to GDP? It's not. If I steal a million dollars from you, the net impact on GDP is ~0. Hell, if you were keeping it in your mattress, and I spend it on drugs and parties, GDP will actually go up. GDP is a useful number, but it's not the only useful number.
- RandomLensman 3y agoIf you steal 1 million out of my payroll account, GDP might go down because I might close my shop, for example. It really is not so simple. Could one carefully construct examples, sure, does that scale - not so much.
- jncfhnb 3y agoWe do have to assume that externalities are not so material as to render such stats misleading, yes.