In the meantime, there are many prominent politicians who talk about GNP as the most important metric, so long as it’s heading in their preferred direction. Absent readily available alternatives, their followers are all too prone to agree with them.
Without objection. There is always a tendency for people to parrot talking points about facts they do not understand.
2. On what the GNP measures: My main premise is that the GNP defines the word “economy” too narrowly.
I think it would be better to say that it measures it too broadly. Your argument is that any quarterly GDP statistic includes some number of ad-hoc events which goose the number; you give the example of power plants being kept open. I agree, but:
- Every quarter contains some ad-hoc events, and….
- There are also negative ad-hoc events.
So, my sense is that these ad-hoc events, over the long term, cancel each other out. Sure, there will be some quarters (we may have just had one, where it’s suggested that we got to 4.1% because companies were stocking inventories ahead of tariffs) where the impact of these events is larger than others. But because such events are always present, I suspect that they do not affect the long term GDP trend, which is of course the uber-statistic which is far more important than a single quarterly datapoint.
It’s too often forgotten nowadays that the notion of growth always is in tension with the other common definition of ‘economy”: the careful management of resources — aka “thriftiness”, “prudence”, “conservation”. Our society would be much better off these days if we emphasized the latter definition much more than the former.
On subjectivity in metrics: I think your point is that it’s problematic if people developing happiness metrics use purchases of particular material goods and services as proxies for happiness. That’s both because the connection is dubious (as in your car example) and because, in picking particular goods, the authors are making subjective value judgements about what’s really important to people.
Close enough, although it’s the latter which I think is more impactful to the statistics.
a. The GNP methodology also requires judgment calls about what to include and exclude. For example, it does not include the value of uncompensated homemaking or care for ailing loved ones.
True, but it doesn’t pick that up in *any* nation, so it’s kind of a wash.
b. The alternative measurements I listed include data derived from surveys of nations’ residents. That pushes the metrics to put more weight on the subjective opinions of humans.
True again, but when you’re using the same survey questions and measurements, you’re tacitly assuming that what makes the Danes happy is/are the same things that make the Italians happy, that are the same things that make Americans happy. That is an unproven assumption.
(notwithstanding “The Hitchhiker’s Guide To The Galaxy” discovery that the answer is 42), But, for the sake of an informed democracy, it’s a worthwhile objective to get as close to that vision as possible.
Never go anywhere without your towel.