3 ms·

If I watch my kids and you watch yours, our contribution to GDP is 0$. If I babysit your kids and you pay me 1.000.000$, and you watch my kids and I pay you 1.0

If I watch my kids and you watch yours, our contribution to GDP is 0$. If I babysit your kids and you pay me 1.000.000$, and you watch my kids and I pay you 1.000.000$, we just created 2.000.000$ in GDP. Were we not in abundance the day before but now we are? What changed?

samus 3y ago
This device only works if these are two completely equal services served by two equally capable persons with the same investment of time and resources. And it assumes that we mutually trust each other to actually do the thing. Also, bringing money into the game makes the responsibility stronger. Especially if those two persons are not living in a vacuum, but have other bills to pay [edit: i.e., to make other people do things for them]. Money is there to make people do things more reliably if there is no other relationship between the buyer and the seller.
- PeterStuer 3y ago
  One could argue GDP measures the degree of financialization of a society more than it measures the presence or absense of abundance.
  - ethanbond 3y ago
    In fact, Kusnetz the actual inventor of the modern GDP measure said something similar: “ Economic welfare cannot be adequately measured unless the personal distribution of income is known. And no income measurement undertakes to estimate the reverse side of income, that is, the intensity and unpleasantness of effort going into the earning of income. The welfare of a nation can, therefore, scarcely be inferred from a measurement of national income as defined above.”
logicchains 3y ago
>If I babysit your kids and you pay me 1.000.000$, and you watch my kids and I pay you 1.000.000$, we just created 2.000.000$ in GDP. This isn't the case with purchasing-power adjusted GDP, which is specifically adjusted to account for the actual purchasing power of people's money.
- PeterStuer 3y ago
  Would that still not in the above toy example lead to 0$ vs 2.000.000$/(some factor)?
  - logicchains 3y ago
    Yes, but it's not going to have any meaningful impact on the overall gdp because it couldn't happen at scale (requires one party to have 1.000.000$ to spend in the first place).
    - VaxWithSex 3y ago
      All money is fiat.
      - logicchains 3y ago
        Yes, but the average Joe Bloe can't print money to pay a babysitter, only the government can.
    - PeterStuer 3y ago
      But isn't this exactly what has been happening on a macro scale with the 'service economy'? We drew ever larger segments of people and activities into the world of financial transactions because of the massive amount of rentseeking money to be made in this environment. We doubled the amount of time the average family had to spend in salaried activity, and we passed start twice as now all activities that were previously selfserviced were also 'market' procured as no-one had time/energy left to take care of this after a long workday.
torginus 3y ago
I'm ignorant about economics, but that sounds wrong - if I offered my services as a babysitter, my contribution to GDP wouldn't be zero. If then I took the earnings from that job and hired a babysitter I would be at the same place.
mafuy 3y ago
What changed? You are now paying 250k$ or so in taxes, which benefits the government :)

samus 3y ago

This device only works if these are two completely equal services served by two equally capable persons with the same investment of time and resources. And it assumes that we mutually trust each other to actually do the thing. Also, bringing money into the game makes the responsibility stronger. Especially if those two persons are not living in a vacuum, but have other bills to pay [edit: i.e., to make other people do things for them]. Money is there to make people do things more reliably if there is no other relationship between the buyer and the seller.

PeterStuer 3y ago
One could argue GDP measures the degree of financialization of a society more than it measures the presence or absense of abundance.
- ethanbond 3y ago
  In fact, Kusnetz the actual inventor of the modern GDP measure said something similar: “ Economic welfare cannot be adequately measured unless the personal distribution of income is known. And no income measurement undertakes to estimate the reverse side of income, that is, the intensity and unpleasantness of effort going into the earning of income. The welfare of a nation can, therefore, scarcely be inferred from a measurement of national income as defined above.”

logicchains 3y ago

>If I babysit your kids and you pay me 1.000.000$, and you watch my kids and I pay you 1.000.000$, we just created 2.000.000$ in GDP. This isn't the case with purchasing-power adjusted GDP, which is specifically adjusted to account for the actual purchasing power of people's money.

PeterStuer 3y ago
Would that still not in the above toy example lead to 0$ vs 2.000.000$/(some factor)?
- logicchains 3y ago
  Yes, but it's not going to have any meaningful impact on the overall gdp because it couldn't happen at scale (requires one party to have 1.000.000$ to spend in the first place).
  - VaxWithSex 3y ago
    All money is fiat.
    - logicchains 3y ago
      Yes, but the average Joe Bloe can't print money to pay a babysitter, only the government can.
  - PeterStuer 3y ago
    But isn't this exactly what has been happening on a macro scale with the 'service economy'? We drew ever larger segments of people and activities into the world of financial transactions because of the massive amount of rentseeking money to be made in this environment. We doubled the amount of time the average family had to spend in salaried activity, and we passed start twice as now all activities that were previously selfserviced were also 'market' procured as no-one had time/energy left to take care of this after a long workday.

torginus 3y ago

I'm ignorant about economics, but that sounds wrong - if I offered my services as a babysitter, my contribution to GDP wouldn't be zero. If then I took the earnings from that job and hired a babysitter I would be at the same place.

mafuy 3y ago

What changed? You are now paying 250k$ or so in taxes, which benefits the government :)