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Another issue with GDP is that it increases as an artifact of marketization, independently of changes to efficiency or standard of living produced by marketizat
by _delirium 13y ago
Another issue with GDP is that it increases as an artifact of marketization, independently of changes to efficiency or standard of living produced by marketization. If two people each cut their own lawn, this contributes $0 to GDP. If they swap so that each mows the other person's lawn for $5, GDP goes up! If they each hire the other person as childcare to watch their own kids while cutting the other person's lawn, GDP goes up even more! This is because GDP does not include non-paid productive work, so simply making it paid increases GDP (even if actual production goes down).
Some of these shifts might improve welfare, but GDP increases regardless of whether they do or not, just by putting dollar figures on existing activity. A government really wanting to artificially boost GDP could give it a big boost by mandating that each parent take care of a different parent's kids for N days a week instead of their own, at a government-fixed rate of pay. The payments in each direction net out, childcare probably does not improve, and GDP goes up.