TIL: GDP Became a National Economic Measure at the 1944 Bretton Woods Conferenceforeignpolicy.com/2011/01/03/gdp-a-brief-history/
860 sats \ 5 comments \ @kr 10 Jan econ
GDP has been the number many countries optimize for, but I wonder what kind of blind spots this optimization has created.
For example, GDP doesn’t measure happiness, externalities like pollution, or health spans of the population.
If you were to design a better metric that countries should optimize for, what would it be?
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1285 sats \ 2 replies \ @shado_op 10 Jan
Ok will have a go! I've thought for a while the bitcoin/nostr/holepunch/opensource community could do a better job at designing economic metrics than the post bretton woods standards. (Unemployment calcs stand out as really being out of date!). ... For GDP, we could measure actual company activity as per company registrations and returns for turnover. Includes NGO's etc. For the pure public sector, we could measure the cost of the service minus any payments to private/NGO's (otherwise this gets double counted eg a payment from a council authority to a private transport company to run a bus service). ... Appreciate this is not available everywhere, but is, in some form, in many places as public record. ... This would mean a revised "GDP" is actual economic turnover and accurately measures the value of an economy.
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0 sats \ 1 reply \ @kr OP 10 Jan
is there a measure that might be better at showing more broad results than just economic ones?
for example happiness or fitness or quality of life?
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1017 sats \ 0 replies \ @shado_op 10 Jan
My thinking is we would capture quality of life seperately. That would enable you to see how changes in economic circumstances affected people, which might not work as expected... Quality of life could include health conditions and life expectancy : Pollution indices based on real time air/water/ground sampling : Happiness is a hard one, very subjective... ... You could then also build a matrix to put all this together in one metric but that would be difficult due to how you weight each factor. ... But I agree that the current focus on economic growth at the expense of everything else is not healthy and we need a better way.
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1113 sats \ 0 replies \ @shado_op 10 Jan
It really is a broken model. ... Had to search to find a reliable source as I remembered it; in 2014 European govs included proceeds of crime in national accounts, boosting GDP calcs. Yes, seriously, some economists think drug dealing has economic value. Add to that the increased costs of dealing with said crime, and a country could increase it's wealth, as measured by GDP, simply as a result of an increased crime wave! (Dont know if this happens elsewhere; Havent been able to find evidence this has been revised but happy to be corrected). https://theconversation.com/now-gdp-data-reflects-the-truth-drugs-and-sex-work-boost-the-economy-27407
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1017 sats \ 0 replies \ @shado_op 10 Jan
As for how to fix it; the problem is GDP is estimated, based off surveys mainly. In the digital age this is absurd. It should at least be calculated using real time, actual data.
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