3 ms·
Net negative sum would by definition lower GDP.
by RandomLensman 3y ago
Net 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.