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For all its flaws, I like GDP better than those new indexes. It's less judgemental. It (not so) simply counts the value of goods and services produced while lea

by blfr 12y ago

For all its flaws, I like GDP better than those new indexes. It's less judgemental. It (not so) simply counts the value of goods and services produced while leaving (most of) value judgements to buyers. Whereas HDIs and progress indexes give (undue imho) weight to things valued by the creators of the index: higher ed, access to information, discrimination, democracy.

1stop 12y ago
Given we are talking about how to judge a "Successful" country. There is a value judgement already at play. GDP to judge success is a value judgement. Defining success in a more utilitarian "Greater good for greater number of people" sense does seem more sensible than counting money coming in. EDIT: To give an absurd example: If a country has HUGE GDP but a government policy of destroying so many tons of dollars/gold/oil every year (i.e wealth destruction). It would still rank highly... even though being absurdly bad.
- blfr 12y ago
  The value judgement in a progress index extends far beyond conflating GDP with success. Creators decide what is the "greater good." And of course it's coloured by their tastes so higher education is included and luxury cars are not even if they're both just tokens in status games. Your absurd example is how signalling often works. In this case, if they can afford to waste gold and oil for no reason then they're clearly doing well. It's like lighting a cigar with a $100 bill, or buying a diamond ring for your fiancée.
  - jonex 12y ago
    I think no one could argue that the creators index does not in any way reflect their values. But that doesn't make GDP any better as a measure. Think of it this way, what country would you have liked to be randomly born into the most? The one where you will be able to participate in society no matter who you are, or the one where a subset of the population makes the most money? Would you like to be born into Saudi Arabia as a woman?* They have a great GDP per capita. I think we have to accept that there is no objective measure of success of a country. In fact we haven't even figured out how to measure success of a company reliably, even if we constrain our self to measuring shareholder value. The best we can do is try finding measures that somehow correlates with quality of life and be explicit about what we are measuring. * In case you are not sure, you don't want to be born into Saudi Arabia as a woman.
  - lazaroclapp 12y ago
    Reducing the importance of education to status games seems to me as a pretty absurd notion, considering that how educated a population is has an important (if often hard to precisely measure) impact in the technological and social development of a civilization. Regardless of what it says about individuals, as a measure of the success of a nation, the amount of luxury cars it consumes indicates very little[1]; the reasoning skills and knowledge of their average citizen is a far more indicative of the capacity of a nation. Now, you can argue that formal higher education is not the only way to instill that knowledge and skills, and also varies widely between education systems. That much is true. But the point is to get easy to measure proxies for what you are really trying to measure. Does the amount of people that go through public education predict the average level of knowledge and reasoning of that country's citizenship better or worse than looking at the amount of things they produce and sell? (not a rhetorical question, both answers can be supported, and each leads you to either HDI or GDP as a "better" measure.) [1] Well, very little compared to what GDP+GINI would tell you
    - hueving 12y ago
      > Well, very little compared to what GDP+GINI would tell you Well that's a bogus comparison. You would have to compare to GDP + luxury cars.
      - lazaroclapp 12y ago
        The idea is that a hypothetical Lamborghini-index would give you information that is essentially a tiny subset of what you'd already know from GDP+GINI. So you can compare GDP+GINI to GDP+GINI+luxury cars and conclude there is no advantage of having the extra information. It basically tells you "there are at least n people in this country who can afford a Lamborghini, furthermore if you assume that r percent of people who can afford a Lamborghini actually buy one, then this country has approx m=r*n such people". But basic economic data already lets you estimate m fairly well, so what's the need for knowing n? Perhaps if r varies a lot between countries knowing the actual number of cars gives you some extra information about how much that country in particular values cars as symbols of status. But, would that be useful? Either way, this is very tangential to the point I was trying to make, which is that education and cars are not equal measures of the development of a society and that an educated population is more that some sort of social status scorecard :)
- justincormack 12y ago
  Well clearly Net Domestic Product is what you want to measure - this includes depreciation, other forms of wealth destruction. Not sure you can find the figures, and we clearly should make more of an effort to measure this properly.
tljr 12y ago
GDP scores a people based on some metrics some people once thought were useful. If you prefer GDP to these other metrics it says you consider goods in / goods out to be a better measure of a country than anything else. That's a pretty narrow view.
pdkl95 12y ago
Using GDP alone to judge countries is a huge value judgement. You're saying profit/productivity is the only thing that is worth measuring. This type hyper-capitalistic framing is what is causing a lot of our current problems, specifically because things like "higher ed, access to information, discrimination, democracy" end up being ignored while everybody focuses on profit. > leaving (most of) value judgements to buyers A working, fair market is a law of nature; assuming that markets will fix everything is a just-world hypothesis[1]. Markets (and capitalism in general) work wonderfully as a way to efficiently allocate scarce goods, iff the buyer has access to good information and the opportunity to shop around. For things like "democracy" and "discrimination", these conditions usually do not exist or they require some significant additional cost. For example, moving to another city for a job can be costly, but is done by people all the time; moving to another country to "shop around" for democracy is difficult and often impossible. Capitalism - in a pure form that is judge only by GDP - is the wrong tool for this kind of goal. That said, I am not familiar with the specific index mentioned in the article (SPI), so I can't say anything good or bad about it. My point here is only that while GDP is certainly useful, other goals need to be included as well when we consider how to judge a country (or state, or city, or business, ...), or we end up getting what we asked for: a society that is very productive, at the expense of everything else, which usually ends badly. Instead, I suggest at least some type of balance, pragmatic approach where many topics are considered. Yes, it will include value judgements - just like the value judgemet to exclude those topics. Solving this kind off political mess is time consuming and annoying, but it's a maintenance cost of running a free society. [1] http://en.wikipedia.org/wiki/Just-world_hypothesis http://en.wikipedia.org/wiki/Just-world_hypothesis
- yummyfajitas 12y ago
  In principle, using GDP alone is simply saying that you are willing to allow other people to judge for themselves the value of things and you'll take their judgements at face value. I.e., if a person values an XBox but doesn't value college (as demonstrated by purchasing the former but not the latter), that's ok. The real issues with GDP in this regard are definitional issues (e.g., man marrying his maid), positional goods (college degrees, suits, and similar things are not intrinsically useful but let me get the job over someone else), compulsory goods (legal defense against lawsuits, obamacare) and govt spending (valued at cost).
crdoconnor 12y ago
>leaving (most of) value judgements to buyers Not true in the case of: * Currency manipulation * Corruption * Waste For some countries you've accounted for about 1/3 of their GDP just with those 3 things. >Whereas HDIs and progress indexes give (undue imho) weight to things valued by the creators of the index For the man who values money above all else, GDP is the ideal measurement. Is that you?
stefantalpalaru 12y ago
Here's Venezuela's great GDP/capita: http://www.google.it/publicdata/explore?ds=d5bncppjof8f9_&met_y=ny_gdp_pcap_cd&idim=country:VEN:COL:BRA&hl=en&dl=en#!ctype=l&strail=false&bcs=d&nselm=h&met_y=ny_gdp_pcap_cd&scale_y=lin&ind_y=false&rdim=region&idim=country:VEN:COL:BRA:CHL:ARG&ifdim=region&hl=en_US&dl=en&ind=false http://www.google.it/publicdata/explore?ds=d5bncppjof8f9_&me... And the terrible living conditions for the general population: http://www.bbc.com/news/world-latin-america-19649648 http://www.bbc.com/news/world-latin-america-19649648 Correct me if I'm wrong, but GDP includes government spending so if the government increases the public debt in order to spend more, the GDP increases without any relation to the value of goods and services. And then there's the downright manipulation done in the European Union by introducing estimates for prostitution and drug trade to cater for differences between countries where those are part of the official economy and those where they are completely in the black market.

by blfr 12y ago

1stop 12y ago

Given we are talking about how to judge a "Successful" country. There is a value judgement already at play. GDP to judge success is a value judgement. Defining success in a more utilitarian "Greater good for greater number of people" sense does seem more sensible than counting money coming in. EDIT: To give an absurd example: If a country has HUGE GDP but a government policy of destroying so many tons of dollars/gold/oil every year (i.e wealth destruction). It would still rank highly... even though being absurdly bad.

blfr 12y ago
The value judgement in a progress index extends far beyond conflating GDP with success. Creators decide what is the "greater good." And of course it's coloured by their tastes so higher education is included and luxury cars are not even if they're both just tokens in status games. Your absurd example is how signalling often works. In this case, if they can afford to waste gold and oil for no reason then they're clearly doing well. It's like lighting a cigar with a $100 bill, or buying a diamond ring for your fiancée.
- jonex 12y ago
  I think no one could argue that the creators index does not in any way reflect their values. But that doesn't make GDP any better as a measure. Think of it this way, what country would you have liked to be randomly born into the most? The one where you will be able to participate in society no matter who you are, or the one where a subset of the population makes the most money? Would you like to be born into Saudi Arabia as a woman?* They have a great GDP per capita. I think we have to accept that there is no objective measure of success of a country. In fact we haven't even figured out how to measure success of a company reliably, even if we constrain our self to measuring shareholder value. The best we can do is try finding measures that somehow correlates with quality of life and be explicit about what we are measuring. * In case you are not sure, you don't want to be born into Saudi Arabia as a woman.
- lazaroclapp 12y ago
  Reducing the importance of education to status games seems to me as a pretty absurd notion, considering that how educated a population is has an important (if often hard to precisely measure) impact in the technological and social development of a civilization. Regardless of what it says about individuals, as a measure of the success of a nation, the amount of luxury cars it consumes indicates very little[1]; the reasoning skills and knowledge of their average citizen is a far more indicative of the capacity of a nation. Now, you can argue that formal higher education is not the only way to instill that knowledge and skills, and also varies widely between education systems. That much is true. But the point is to get easy to measure proxies for what you are really trying to measure. Does the amount of people that go through public education predict the average level of knowledge and reasoning of that country's citizenship better or worse than looking at the amount of things they produce and sell? (not a rhetorical question, both answers can be supported, and each leads you to either HDI or GDP as a "better" measure.) [1] Well, very little compared to what GDP+GINI would tell you
  - hueving 12y ago
    > Well, very little compared to what GDP+GINI would tell you Well that's a bogus comparison. You would have to compare to GDP + luxury cars.
    - lazaroclapp 12y ago
      The idea is that a hypothetical Lamborghini-index would give you information that is essentially a tiny subset of what you'd already know from GDP+GINI. So you can compare GDP+GINI to GDP+GINI+luxury cars and conclude there is no advantage of having the extra information. It basically tells you "there are at least n people in this country who can afford a Lamborghini, furthermore if you assume that r percent of people who can afford a Lamborghini actually buy one, then this country has approx m=r*n such people". But basic economic data already lets you estimate m fairly well, so what's the need for knowing n? Perhaps if r varies a lot between countries knowing the actual number of cars gives you some extra information about how much that country in particular values cars as symbols of status. But, would that be useful? Either way, this is very tangential to the point I was trying to make, which is that education and cars are not equal measures of the development of a society and that an educated population is more that some sort of social status scorecard :)
justincormack 12y ago
Well clearly Net Domestic Product is what you want to measure - this includes depreciation, other forms of wealth destruction. Not sure you can find the figures, and we clearly should make more of an effort to measure this properly.

tljr 12y ago

GDP scores a people based on some metrics some people once thought were useful. If you prefer GDP to these other metrics it says you consider goods in / goods out to be a better measure of a country than anything else. That's a pretty narrow view.

pdkl95 12y ago

Using GDP alone to judge countries is a huge value judgement. You're saying profit/productivity is the only thing that is worth measuring. This type hyper-capitalistic framing is what is causing a lot of our current problems, specifically because things like "higher ed, access to information, discrimination, democracy" end up being ignored while everybody focuses on profit. > leaving (most of) value judgements to buyers A working, fair market is a law of nature; assuming that markets will fix everything is a just-world hypothesis[1]. Markets (and capitalism in general) work wonderfully as a way to efficiently allocate scarce goods, iff the buyer has access to good information and the opportunity to shop around. For things like "democracy" and "discrimination", these conditions usually do not exist or they require some significant additional cost. For example, moving to another city for a job can be costly, but is done by people all the time; moving to another country to "shop around" for democracy is difficult and often impossible. Capitalism - in a pure form that is judge only by GDP - is the wrong tool for this kind of goal. That said, I am not familiar with the specific index mentioned in the article (SPI), so I can't say anything good or bad about it. My point here is only that while GDP is certainly useful, other goals need to be included as well when we consider how to judge a country (or state, or city, or business, ...), or we end up getting what we asked for: a society that is very productive, at the expense of everything else, which usually ends badly. Instead, I suggest at least some type of balance, pragmatic approach where many topics are considered. Yes, it will include value judgements - just like the value judgemet to exclude those topics. Solving this kind off political mess is time consuming and annoying, but it's a maintenance cost of running a free society. [1] http://en.wikipedia.org/wiki/Just-world_hypothesis http://en.wikipedia.org/wiki/Just-world_hypothesis

yummyfajitas 12y ago
In principle, using GDP alone is simply saying that you are willing to allow other people to judge for themselves the value of things and you'll take their judgements at face value. I.e., if a person values an XBox but doesn't value college (as demonstrated by purchasing the former but not the latter), that's ok. The real issues with GDP in this regard are definitional issues (e.g., man marrying his maid), positional goods (college degrees, suits, and similar things are not intrinsically useful but let me get the job over someone else), compulsory goods (legal defense against lawsuits, obamacare) and govt spending (valued at cost).

crdoconnor 12y ago

>leaving (most of) value judgements to buyers Not true in the case of: * Currency manipulation * Corruption * Waste For some countries you've accounted for about 1/3 of their GDP just with those 3 things. >Whereas HDIs and progress indexes give (undue imho) weight to things valued by the creators of the index For the man who values money above all else, GDP is the ideal measurement. Is that you?

stefantalpalaru 12y ago

Here's Venezuela's great GDP/capita: http://www.google.it/publicdata/explore?ds=d5bncppjof8f9_&met_y=ny_gdp_pcap_cd&idim=country:VEN:COL:BRA&hl=en&dl=en#!ctype=l&strail=false&bcs=d&nselm=h&met_y=ny_gdp_pcap_cd&scale_y=lin&ind_y=false&rdim=region&idim=country:VEN:COL:BRA:CHL:ARG&ifdim=region&hl=en_US&dl=en&ind=false http://www.google.it/publicdata/explore?ds=d5bncppjof8f9_&me... And the terrible living conditions for the general population: http://www.bbc.com/news/world-latin-america-19649648 http://www.bbc.com/news/world-latin-america-19649648 Correct me if I'm wrong, but GDP includes government spending so if the government increases the public debt in order to spend more, the GDP increases without any relation to the value of goods and services. And then there's the downright manipulation done in the European Union by introducing estimates for prostitution and drug trade to cater for differences between countries where those are part of the official economy and those where they are completely in the black market.