It's time to retire metrics like GDP. They don't measure everything that matters | Hacker News Reader

It's time to retire metrics like GDP. They don't measure everything that matters

theguardian.com

26 pointsingve13 comments

My comment from this [0] discussion two days ago:

Keep your eye on the prize, and the prize isn't measured by metrics. Any prize in the real world is something complex and complicated, hard to describe and prone to squishiness. Metrics are things that are "easy" to measure and compare across systems. Setting goals in terms of metrics is appealing and even necessary because it makes things measurable and comparable in the real world, but you need to have some cross-check where you can come back and verify that you are moving closer to your real world goal.

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A real world example: Consumer products are often distinguished by appearance, and surface quality is an important facet of appearance. You purchase a surface quality tester and improve the measurements produced by the surface tester to the point where you beat a competitor's surface measurements. Then you have a customer clinic and have real potential customers evaluate the two products again. Customers prefer the competitor product because you were not actually measuring attractiveness or appearance of quality, you were measuring something that the surface tester measures.

0: https://news.ycombinator.com/item?id=21601996

Right, that's why you usually want to target a basket of metrics instead of "one metric to rule them all."

It's odd that Stiglitz doesn't speak of word of the capability approach, which seems to be a step in that direction.

https://en.wikipedia.org/wiki/Capability_approach

GDP doesn't measure everything that matters, but it doesn't matter nothing that matters, either. We don't need to retire GDP; rather, we need to be more aware of its limitations.

My favourite example of this is childcare programs. Parents raising their children isn't counted in GDP; but parents who raise someone else's children is counted in GDP. Governments can artificially inflate GDP by enacting policies which expand the outside-of-home childcare industry; you may end up with the same number of adults providing the same quality of care to the same number of children, but GDP is magically higher.

Not to mention that society is probably better off when parents are raising their own children.

Indeed, let's retire all metrics! Not one of them measures everything that matters!

Have an ironic upvote.

Yes, because speaking or retiring a particular, hazily defined metric, is the same as suggesting we retire all metrics.

Extra points for using both the "slippery slope" fallacy (retire 1 metric = might as well suggest retiring all), and the wrong idea that "no metric measures anything that matters".

There are metrics that do capture everything that matters in their domain. Whole factories are operated, and manage to run smoothly, not to be blown off etc, by monitoring such metrics.

If TFA had said "they don't measure everything" you'd be justified, but it says "everything that matters" (and of course, "about the domain we want to measure" goes without saying).

I'd be happy to retire GDP when someone proposes something better.

Measuring societal progress is an important goal, which GDP measures part of. So great -- how do we measure economic growth but also take into account, as Stiglitz says, externalities like resource depletion?

It feels disingenuous to bash GDP but not even try to suggest something to replace it. Don't throw the baby out with the bathwater.

Uhhh... There are tons of different measurements. Here even Stiglitz says so and then talks about others: https://www.project-syndicate.org/commentary/new-metrics-of-...

Throwing the baby out with the bath water? I think it's more like throwing the bath water out to save the baby from drowning.

This is not a very good article.

I fully agree with the authors point that GDP at the top line metric is a disaster.

But there are several other proposed models out there. Why doesn’t he mention them?

Organizations optimize around metrics so IMHO getting metrics aligned with “good” would be a huge lever against the problems the author enumerates.

But then the article just ends, doesn’t mention GDI, GDSP, etc. It’s weird, I wonder why.

To me, it read like a money grab and a jab at the current US administration, so it's more a political piece (it is election time) that is preaching to the choir to get donations/subscriptions. I usually like the Guardian, but this turns me off.

As you said, if it was really a genuine article trying to improve on metrics being used, it would compare similar metrics and show their limitations. GDP is a useful metric, but only when used with other metrics that show the benefits of additional production. Making more money doesn't matter if your costs rise and you end up with the same quality of life. It's kind of like comparing salaries between SF and Iowa without taking into account local costs of living.

So yes, this article is weak and feels like a political piece disguised as a legitimate criticism.

Let me guess: the alternative is something to do with high taxes, mass immigration, and diversity, and ignoring that troublesome thing called democracy when the proles dare vote against the unquestionably superior and enlightened perspective of the elites (ahem Brexit). How dare the great unwashed vote in their own interests!

The de-emphasis of GDP is a boon to anyone who expects their policies to be a drag on the economy. If you re-define economic success so that the mere existence of your preferred policies constitutes success, you can't lose.

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