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In the past, more than today, a lot of material benefits to people were provided via baked in social relations and other ways of life, and not via monetary exch
by abdullahkhalids 2y ago
In the past, more than today, a lot of material benefits to people were provided via baked in social relations and other ways of life, and not via monetary exchange. For example, paying someone to take care of your kids is not something that happened when extended families lived with each. This was not included in past (or today's gdp). Similarly, if you grow part of your own food, then that's not included in the gdp.
Past estimates of GDP largely only account for monetary exchanges, and not for stuff like the above. So they grossly underestimate how "wealthy" people were. I have seen several recent papers that try to correct for this.
- didgetmaster 2y agoI agree. I believe that until the past century, the default behavior was to provide the majority of your family's needs yourself and only go outside of that for a small portion where money would exchange hands. People lived on family farms where they grew their own food, made their own clothes, and built their own shelter. It is not clear in the article if barter was considered in past GDP numbers (e.g. "I'll trade you my cow for the wagon you built.") These days everyone works for cash and often pays for services that they could easily do themselves.