4 ms·

The entire essay obsesses over GDP convergence while ignoring that GDP (especially in the West) increasingly measures asset shuffling, imputed rents, and health

The entire essay obsesses over GDP convergence while ignoring that GDP (especially in the West) increasingly measures asset shuffling, imputed rents, and healthcare billing rather than anything humans actually experience. (Healthcare, finance, real estate, and legal services combined are ~40% of US GDP!) So we've got 3000 words eulogizing a metric that tells you more about financialization than flourishing. Look at life expectancy, infant mortality, or caloric intake and you'll find a more interesting story -- with some poor countries doing very well, and increasingly so, whereas others are on a fairly grim trajectory.

rayiner 9mo ago
GDP per capita is highly correlated with metrics like infant mortality.
- danny_codes 9mo ago
  Though if you use us as a data point, seems like it goes down if you get too high
  - deleted 9mo ago
    [deleted]
- bryanlarsen 9mo ago
  Which makes it even more interesting when the two highly correlated metrics are moving in different directions relatively.
- topaz0 9mo ago
  Life expectancy vs GDP per capita: https://ourworldindata.org/grapher/life-expectancy-vs-gdp-per-capita https://ourworldindata.org/grapher/life-expectancy-vs-gdp-pe... I don't have an R^2, but clear to me that it's far from one. Likewise for infant mortality rate: https://ourworldindata.org/grapher/child-mortality-gdp-per-capita https://ourworldindata.org/grapher/child-mortality-gdp-per-c... Edit to add: point being that a weak correlation, even if it is indisputably real, leaves a lot of room for other factors to be operative when it comes to particular differences.
  - rayiner 9mo ago
    What does it look like if you separate out east asians and remove countries with an inflated GDP per capita from resource exports (like Botswana)?
    - topaz0 9mo ago
      It looks like cherry picking. More to the point, it looks like you are attempting to identify some of the particular factors that might affect gdp or health outcomes in ways that aren't correlated, and exclude cases where those are the operative factors. Which would provide support for the thesis that there are other operative factors, as suggested by OP.
      - rayiner 9mo ago
        It’s not cherry-picking. The question is: does GDP correlate with things we care about? In answering that question it makes sense to hold other factors constant. Asians have a longevity advantage in virtually every society where they’re found, so it makes sense to separate out the asian countries. It also makes sense to remove outliers where a single export makes GDP per capita seem artificially large.
        topaz0 9mo ago
        1. The blog states that the relationship between economic growth and initial wealth doesn't show a trend that had been expected from theory. It uses per capita GDP and per capita GDP growth as proxies for wealth and growth. Its analysis does not control for any pet theories, because the theory claims to be general. (Indeed, it refers to literature that does control for other factors and explains why they are unsatisfying: because if the other factors are more important than the economic ones, then the theory isn't worth much) 2. OP, roughly, objects that GDP (and its growth rate) is sensitive to a fairly specific fact of the modern global economy, namely uneven financialization, and hints at an argument for why GDP would obscure the relevant trends in wealth and growth of wealth. They claim that the dynamics of various health proxies are better representative of economic status and growth than GDP is. They do not claim that these are not correlated. Effectively, their claim is that the portion of the variation of GDP that is not explained by its correlation with health outcomes is enough to obscure the relationship between economic status and growth. 3. You comment tersely that they are correlated, which was never denied in OP, and does not address in any way the relevance of the particular confounding factor that OP proposed. In followups try to rescue that correlation by controlling for your pet "extra factors" that (1) objected to for how they weaken the relevance of the economic theory, and that are irrelevant to the point that OP was trying to make. To be clear, I have no strong evidence that financialization explains the way that GDP (and its derivative) differs from a linear function of other development metrics (and their derivatives), and if OP has evidence, they don't provide it in their brief HN comment. All I'm saying is, saying there's a correlation has very little bearing on OP's claim, and controlling for more irrelevant pet factors is not going to make it more relevant.
AnimalMuppet 9mo ago
Healthcare is far more than just billing. Healthcare is why I didn't have a heart attack (two stents in my heart). It's why I didn't go blind (cataracts). It's stuff that I directly benefit from.
deleted 9mo ago
[deleted]
raincole 9mo ago
US tourists spend $177B per year abroad. When they spend their money in other countries[0], they surely experience the benefit. The universal experience of Americans visiting Japan: how is such a developed place so affordable? Then they think Japan must do something exceptionally excellent. But the truth is it feels weirdly affordable because they are spending their American salary there. [0]: https://en.wikipedia.org/wiki/World_Tourism_rankings#:~:text=Table_title:%20International%20tourism%20expenditure%20Table_content:%20header:%20%7C,%7C%202024:%20119.2%20%7C%202023:%20110.3%20%7C https://en.wikipedia.org/wiki/World_Tourism_rankings#:~:text...
- shermantanktop 9mo ago
  And they get the opposite feeling when they pay $30 for a hamburger in Zurich.
  - LargoLasskhyfv 9mo ago
    -.^(raising eyebrow) Doesn't have to be swiss. There are enough domestic(CONUS) places where you can have the same prices, with ease.
- tim333 9mo ago
  When I visited Japan around 1983 it was the other way around - Japan was stupid expensive compared to the US or Europe. It's mostly down to investment flows moving the currencies. Back then Japan was the economic miracle dominating cars and cameras and everyone was buying in. Now Japan is in gentle decline and the hot money is all going to the US to invest in FAANG stuff.
readthenotes1 9mo ago
"Healthcare, finance, real estate, and legal services combined are ~40% of US GDP!" Healthcare is more properly medical care. There's very little health care or wellness preservation compared to treatment and repair. I would argue that legal services are more care-like, but there is a fair amount of treatment and repair.
hirako2000 9mo ago
Economists are obsessed with numbers even when numbers simply contradicts numbers they aren't familiar with. Incorporating sociology, for what it's worth would radically change the picture. Do economists travel? And what is a poor country anyway.. Zimbabwe is put on the same table as south east Asian countries..where do geopolitical aspects get into considerations for countries like Cuba or more recently Venezuela or Iran. Do these things even matter. No surprise economists have lost legitimity for so many. They don't predict or diagnose the economy of the nations they live in, trying to explain what they call the "global south" as some call it is rather arrogant. What this research may have got right is to nuance what their predecessor had claimed. But that wasn't too hard. My tip for economists: go live in rural areas in each country you claim to diagnose. Speak to the locals, grand ma can tell you what it cost to get clean water just a few decades ago vs now. Maybe you will start to understand what poverty even means.
- chirau 9mo ago
  What's your point on Zimbabwe being put on the same table as south east Asian countries?
  - hirako2000 9mo ago
    The point is the drastic difference in level of development for a set of different countries in different region. Each nation faces different challenges.
- deleted 9mo ago
  [deleted]
jhanschoo 9mo ago
I don't see how this comment relates to the article, which claims that the observed quick growth in "poor countries" was all just China modernizing. And Chinese growth is indeed correlated with better material conditions for the Chinese.

rayiner 9mo ago

GDP per capita is highly correlated with metrics like infant mortality.

danny_codes 9mo ago
Though if you use us as a data point, seems like it goes down if you get too high
- deleted 9mo ago
  [deleted]
bryanlarsen 9mo ago
Which makes it even more interesting when the two highly correlated metrics are moving in different directions relatively.
topaz0 9mo ago
Life expectancy vs GDP per capita: https://ourworldindata.org/grapher/life-expectancy-vs-gdp-per-capita https://ourworldindata.org/grapher/life-expectancy-vs-gdp-pe... I don't have an R^2, but clear to me that it's far from one. Likewise for infant mortality rate: https://ourworldindata.org/grapher/child-mortality-gdp-per-capita https://ourworldindata.org/grapher/child-mortality-gdp-per-c... Edit to add: point being that a weak correlation, even if it is indisputably real, leaves a lot of room for other factors to be operative when it comes to particular differences.
- rayiner 9mo ago
  What does it look like if you separate out east asians and remove countries with an inflated GDP per capita from resource exports (like Botswana)?
  - topaz0 9mo ago
    It looks like cherry picking. More to the point, it looks like you are attempting to identify some of the particular factors that might affect gdp or health outcomes in ways that aren't correlated, and exclude cases where those are the operative factors. Which would provide support for the thesis that there are other operative factors, as suggested by OP.
    - rayiner 9mo ago
      It’s not cherry-picking. The question is: does GDP correlate with things we care about? In answering that question it makes sense to hold other factors constant. Asians have a longevity advantage in virtually every society where they’re found, so it makes sense to separate out the asian countries. It also makes sense to remove outliers where a single export makes GDP per capita seem artificially large.
      - topaz0 9mo ago
        1. The blog states that the relationship between economic growth and initial wealth doesn't show a trend that had been expected from theory. It uses per capita GDP and per capita GDP growth as proxies for wealth and growth. Its analysis does not control for any pet theories, because the theory claims to be general. (Indeed, it refers to literature that does control for other factors and explains why they are unsatisfying: because if the other factors are more important than the economic ones, then the theory isn't worth much) 2. OP, roughly, objects that GDP (and its growth rate) is sensitive to a fairly specific fact of the modern global economy, namely uneven financialization, and hints at an argument for why GDP would obscure the relevant trends in wealth and growth of wealth. They claim that the dynamics of various health proxies are better representative of economic status and growth than GDP is. They do not claim that these are not correlated. Effectively, their claim is that the portion of the variation of GDP that is not explained by its correlation with health outcomes is enough to obscure the relationship between economic status and growth. 3. You comment tersely that they are correlated, which was never denied in OP, and does not address in any way the relevance of the particular confounding factor that OP proposed. In followups try to rescue that correlation by controlling for your pet "extra factors" that (1) objected to for how they weaken the relevance of the economic theory, and that are irrelevant to the point that OP was trying to make. To be clear, I have no strong evidence that financialization explains the way that GDP (and its derivative) differs from a linear function of other development metrics (and their derivatives), and if OP has evidence, they don't provide it in their brief HN comment. All I'm saying is, saying there's a correlation has very little bearing on OP's claim, and controlling for more irrelevant pet factors is not going to make it more relevant.

AnimalMuppet 9mo ago

Healthcare is far more than just billing. Healthcare is why I didn't have a heart attack (two stents in my heart). It's why I didn't go blind (cataracts). It's stuff that I directly benefit from.

deleted 9mo ago

[deleted]

raincole 9mo ago

US tourists spend $177B per year abroad. When they spend their money in other countries[0], they surely experience the benefit. The universal experience of Americans visiting Japan: how is such a developed place so affordable? Then they think Japan must do something exceptionally excellent. But the truth is it feels weirdly affordable because they are spending their American salary there. [0]: https://en.wikipedia.org/wiki/World_Tourism_rankings#:~:text=Table_title:%20International%20tourism%20expenditure%20Table_content:%20header:%20%7C,%7C%202024:%20119.2%20%7C%202023:%20110.3%20%7C https://en.wikipedia.org/wiki/World_Tourism_rankings#:~:text...

shermantanktop 9mo ago
And they get the opposite feeling when they pay $30 for a hamburger in Zurich.
- LargoLasskhyfv 9mo ago
  -.^(raising eyebrow) Doesn't have to be swiss. There are enough domestic(CONUS) places where you can have the same prices, with ease.
tim333 9mo ago
When I visited Japan around 1983 it was the other way around - Japan was stupid expensive compared to the US or Europe. It's mostly down to investment flows moving the currencies. Back then Japan was the economic miracle dominating cars and cameras and everyone was buying in. Now Japan is in gentle decline and the hot money is all going to the US to invest in FAANG stuff.

readthenotes1 9mo ago

"Healthcare, finance, real estate, and legal services combined are ~40% of US GDP!" Healthcare is more properly medical care. There's very little health care or wellness preservation compared to treatment and repair. I would argue that legal services are more care-like, but there is a fair amount of treatment and repair.

hirako2000 9mo ago

Economists are obsessed with numbers even when numbers simply contradicts numbers they aren't familiar with. Incorporating sociology, for what it's worth would radically change the picture. Do economists travel? And what is a poor country anyway.. Zimbabwe is put on the same table as south east Asian countries..where do geopolitical aspects get into considerations for countries like Cuba or more recently Venezuela or Iran. Do these things even matter. No surprise economists have lost legitimity for so many. They don't predict or diagnose the economy of the nations they live in, trying to explain what they call the "global south" as some call it is rather arrogant. What this research may have got right is to nuance what their predecessor had claimed. But that wasn't too hard. My tip for economists: go live in rural areas in each country you claim to diagnose. Speak to the locals, grand ma can tell you what it cost to get clean water just a few decades ago vs now. Maybe you will start to understand what poverty even means.

chirau 9mo ago
What's your point on Zimbabwe being put on the same table as south east Asian countries?
- hirako2000 9mo ago
  The point is the drastic difference in level of development for a set of different countries in different region. Each nation faces different challenges.
deleted 9mo ago
[deleted]

jhanschoo 9mo ago

I don't see how this comment relates to the article, which claims that the observed quick growth in "poor countries" was all just China modernizing. And Chinese growth is indeed correlated with better material conditions for the Chinese.