

Why we should't judge a country by its GDP - plumeria
http://ideas.ted.com/why-we-shouldnt-judge-a-country-by-its-gdp/

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andor
I'm having a few doubts about this ranking.

Freedom of speech in Finland is supposed to be the same as in Afghanistan? I'm
sure they _theoretically_ have it in Afghanistan if the table says so, but the
consequences will be very different.

Health and Wellness: Life expectancy is a good overall indicator, but how can
you quantify the situation of people who fell ill? Cheap access to good
medical care varies a lot between countries.

Globally ranked universities: how about normalizing this by size of
population, e.g. Switzerland vs. Germany?

Personal Freedom of Choice/Early marriage: where's the freedom of choice part
in this? I don't think the relatively early marriages in the US, Canada and
New Zealand are all arranged.

~~~
vacri
I'm having some difficulty looking at their site. UAE is #1 for tolerance of
immigrants? They're a modern-day slave state! Similarly the UAE placed as high
as 20th in the rankings for 'discrimination against minorities'.

Similarly Belarus gets a top score for religious tolerance, while western
Europe gets second bottom. Belarus's form of religious tolerance is 'you're
free to be whatever religion, as long as it's the state religion' (Orthodox).
You don't get any protections from the state if you're not Orthodox.

There's quite a few spots where things look iffy in their rankings.

~~~
notahacker
Algeria, where homosexual acts are illegal, is more "tolerant of
homosexuality" than Thailand, which might not be a liberal paradise but
embraces homosexuality and transgenderism as part of cultural norms like few
other places.

The highest level of religious tolerance is exhibited in the Islamic Republic
of Mauritania, which handed out a death sentence to a blogger for apostasy at
the end of last year. Western Europe, apparently, should look towards them to
as an example.

This is not just a bit iffy. This is _dangerously_ bad ranking.

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blfr
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.

~~~
pdkl95
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)

~~~
Spooky23
GDP has another interesting quality -- it can be measured with some degree of
accuracy, and people who know what they are talking about can tell you
(eventually) whether the number was accurate or not.

You've captured a bunch of interesting nuances, but I think those things are
hard to measure in the form of an index.

~~~
mohawk
A small aside to your comment: GDP can be measured accurately, but sometimes
it isn't. Some recent prominent examples are from Africa:

[http://www.theguardian.com/business/2012/nov/20/economics-
gh...](http://www.theguardian.com/business/2012/nov/20/economics-ghana)

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dribnet
GDP is like measuring calories burned without any other context. Expenditure
is a means, not an end.

As engineers I think we are aware of the danger of optimizing around the wrong
fitness function. The GDP is used as shorthand for "the economy" in federal
policymaking, so now there are many ways to "stimulate" the economy by
creating various forms of inefficiencies and misery. [1]

[1] [http://jonathanrowe.org/the-gross-domestic-
product](http://jonathanrowe.org/the-gross-domestic-product)

~~~
hueving
How is gdp used in federal policy making?

~~~
dribnet
Certainly you've heard a government official frame an issue he didn't like as
"bad for the economy"? In the US, it's basically the first page in the
playbook for both sides of the aisle because very few issues are as sacred as
a healthy economy. But if hurting the economy just means bringing down the
GDP, then there are countless reasons why the underlying issue might still be
beneficial to the welfare of its citizens.

Want to boost your country's GDP? Here's some tips. Become terminally ill. Get
involved in a costly divorce. Try gambling or drinking habitually. Take a job
where you commute long hours wasting gas in traffic. Hell, open a strip mine -
every resource extracted is a net positive on the national ledger. Bonus
points if you can coerce your fellow citizens into compulsory spending - a
nasty coal plant triggering asthma in the local population is a great example.

Even worse, a focus on GDP directly contributes to income inequality because
as a measure it is blind to the distribution. If the top 1% gain more than
every one else loses in a year, GDP still rises. For this reason Rowe calls
GDP a "statistical laundry operation that hides the suffering at the bottom".

Measuring and tracking GDP is a splendid idea, but using it as even a proxy
for national welfare is insanity. I encourage anyone interested to read the
linked article, which is as true today as when Rowe testified before the US
senate 8 years ago. Also at the end he takes a first pass at laying out
principles around new metrics to fix the situation.

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aryehof
Some alternative social indexes to the Social Development Index discussed in
the video:

1\. Democracy Index
([http://en.wikipedia.org/wiki/Democracy_Index](http://en.wikipedia.org/wiki/Democracy_Index))
2\. Human Development Index
([http://en.wikipedia.org/wiki/Human_Development_Index](http://en.wikipedia.org/wiki/Human_Development_Index))
3\. OECD Better Life Index
([http://www.oecdbetterlifeindex.org](http://www.oecdbetterlifeindex.org))

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lazyant
All indexes or rankings are "biased" in the sense that they are a weighted sum
of different parameters that often have little to do with each other (adding
apples and oranges). As such no index could be perfect for all since we have
different values.

For example if you value freedom of speech a lot, the US would be way up
compared to say, Germany (illegal to deny the Holocaust), if you value human
rights, the death penalty is an aberration and the US would be at the bottom
part of the index. If you value safety over rights, Singapore would have a
high index, otherwise low etc.

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mark_l_watson
Catherine Austin Fitts has a happiness and social health measurement that she
calls the "popsicle index". This a measure of how comfortable a parent is
giving their child money to walk to a neighborhood store by themselves to buy
a popsicle.

I would add a general "comfort index" of how people feel about the future. In
the USA we have a strange situation. We have lots of raw materials, good
education systems, and we are relatively geographically isolated. All nice
advantages. Yet, we have very poor governance. A huge majority of our
population does not trust Congress and the office of the President.
Statistically, people respect our military and the Supreme Court and that is
about it. Couple this with a general uneasy feeling about the future of the
dollar vs. SDRs, etc. and lack of confidence our ability to be highly
productive, and I would have to give my own country a mediocre "comfort
index."

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dredmorbius
Direct video link:
[http://fixyt.com/watch?v=N8Votwxx8a0](http://fixyt.com/watch?v=N8Votwxx8a0)

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lumberjack
Which pair of western countries have the property of one having a higher GDP
than the other and also a lower standard of living for some demographic of
people preset in both countries?

~~~
notahacker
GDP per capita rankings vary hugely according to who's doing the calculations,
and precisely when, so Western countries frequently swap places. That's a
quick reminder that GDP really _isn 't_ that much more neutral and objective
than other development rankings, especially when you have to choose between
vast arrays of possible baskets of relevant goods, intra-country price
variations and inter country purchasing habit differences to construct
purchasing power parity measures.

That said, Ireland still performs very well in recent nominal GDP rankings,
even relative to the likes of Germany, yet has huge unemployment problems and
is universally agreed to be in a worse economic state than Germany. The poor
in the US are usually regarded as being far worse off than the poor in most
Western European countries, but the US almost invariably comes out on top.

~~~
disgruntledphd2
Just as an FYI with regards to Ireland - GDP is not actually an appropriate
measure in the presence of large multinationals and their tax-avoidance
schemes. The money flows through the country, but doesn't actually have much
impact on the economy. In general, GNP is better for countries such as Ireland
and Luxembourg.

