

Development: Time to leave GDP behind - sveme
http://www.nature.com/news/development-time-to-leave-gdp-behind-1.14499

======
sveme
The biggest issue I have with GDP is that it has become more than a measure, a
mean in and of itself. Policies that could have a beneficial impact on
societal wellbeing have been shut down using the argument that it would
negatively affect GDP growth, thereby arguing that this number alone is what
matters. Sometimes it feels like politicians and economists participate in a
world cup encompassing all nations where the score is determined by GDP and
GDP growth, the number removed from its societal meaning.

~~~
Lazare
Perhaps, and yet... GDP is not meaningless. It may not be everything we care
about, but it's certainly correlated with the things we care about. If you
look at a list of the top 10 large countries by GDP per capita (I picked a
cutoff of 6 million people to exclude small banking and oil states which
aren't really generalizable) you get:

The US, Switzerland, Canada, Australia, Austria, Netherlands, Sweden, Germany,
Belgium, and the UK.

I have preferences abut where I'd like to live within that list, but I, for
one, would be pretty happy to be an average Joe citizen of any one of those
places. The bottom ten, by contrast, would be something like Afghanistan,
Madagascar, the CAR, Malawi, Niger, Eritrea, Liberia, Burundi, Zimbabwe, and
DR Congo.

I'm frankly ecstatic that I wasn't born in any of those places. In addition, I
think we can all agree that _any_ step that makes DR Congo look more like, eg,
Sweden is going to involve a significant rise in per capita GDP. Conversely,
any significant rise in per capita GDP is, as a practical matter, going to
make life more pleasant for ordinary Congolese.

Where GDP arguably breaks down is in trying to compare Canada to Australia, or
Germany this year to Germany five years ago. GDP numbers would tell you that
Canada is better off than Australia, while Germany is better off now than in
2009. Is that true? Arguably, in some ways. In others, probably not. But is it
better to be living in Canada than Mali? Yes. And if we're going to be honest,
a vast amount of that difference _is_ represented in the GDP per capita
figures.

~~~
theandrewbailey
I disagree. It seems that you are making GDP as a primary standard of living
indicator.

Someone could strike gold/oil in one of those bottom ten countries, making a
few people very rich, thus raising average GDP. Worse still, many of those
places are in (almost) perpetual war, which brings everyone's standard of
living down. This vast wealth might incentivize them to start fighting more.
But look, GDP is up so they must be doing better!

~~~
Lazare
I said: "look at a list of the top 10 large countries by GDP per capita (I
picked a cutoff of 6 million people to exclude small banking and oil states
which aren't really generalizable)"

You said: "Someone could strike gold/oil in one of those bottom ten countries,
making a few people very rich, thus raising average GDP."

I'm open to counter-examples, but offhand I would say no; that can only happen
in small countries. That's why I limited my comments explicitly to large
countries. :)

(In the spirit of full disclosure, I should note that it was late, and I
didn't properly filter the list of the bottom 10 countries by size. Liberia
and CAR are small, and should have been replaced by Mali and Togo.)

