That’s a pretty good analogy for what GDP is counting, actually.
But I think the larger point is that manufacturing is grounded in something real. It’s a measure of how many tanks and fighter jets you can make, no matter how much they cost to make.
The graph that shocked me tho was the electricity production, I didn't realize US was so flat but it rings true, I know there's a 2 year wait-list to even have your energy production considered to be hooked up to the grid, but I assumed there was some at least some throughput, now we're taking about onsite mini nukes while China is building.
Second, “GDP/watt” is absolutely an economic metric, and it captures something about energy efficiency but also the mix of an economy. Software and services scores highly; aluminum smelting does not.
In that case, you could argue that "true GDP" didn't change at all, merely our measurement of it had error. But pretty soon you ask 'well, what is the real signal?' And it's turtles all the way down.
Again, economics is weird, but perhaps interesting because it's weird. (I'll confess I didn't care about the field at all until it suddenly got very interesting in ~2008.)
Say the monetary base is $100 and the GDP is $1,000 initially, then the monetary base doubles to $200 and the GDP doubles to $2,000. It looks suspiciously like no real economic activity was generated and that suggests that velocity is the growth measure.
Sure mind over matter, but I'd prefer using a more objective definition for wealth, rather than an arbitrary one. It makes measuring and comparing things much more sensible, otherwise you are free to reason whatever you want and have no culpability, which is very unscientific.
The reason economics is hard, in part, is that there isn't some core firmament you can rest on; there is no fundamental, provable truth. And yet, with fancy statistics and clever experimental design, you can still make intelligent statements and understand the world better.
To me, economics is the field with the purest expression of "all models are wrong, some are useful." Which is actually sort of cool, if you let it be.
I can only think it began with the philosophy for making better decisions, solving problems, and improving society - particularly in the allocation of its resources.
As so, I think a huge part of the problem with economics, including most economists, is that people equate value for wealth. Value certainly is subjective, I mean, do you value having $80k, or a nice car? How about a pool, or a boat? Do you value your time less than the cost of a flight? All very subjective. But I think it's flawed to conflate value for wealth. Wealth is something real, the things you are evaluating in trade. Time is wealth. Money is wealth. Oil is wealth. Land is wealth. Why don't we simply measure these things, and how they're allocated? IMO, it seems more practical and more noble of pursuit to figuring out if someone actually needs food in society, rather than what people with plenty of resources ascribe their values to.
You’ll find that money is noise, this, us, together, is wealth
The body’s just cosines and vectors, love is the real health
Anyway, idk if that's useful. I'd say though, economists don't really need to care about what people value, except to the extent that they can e.g,. learn about what people value by observing their behavior, or use how they ascribe value to something to predict their behavior. That is to say, "real" economists _do_ study allocations of physical resources etc., don't think they just try to model some theoretical value function :)
Is it actually that hard?
The material worth of something is what someone will pay you for it, i.e. the value it would sell for at auction. Your material wealth is the sum of the worth of what you have.
That means if you own something and the market price of it changes, i.e. someone changes their mind, then your wealth changes. But is that even wrong?
The real trouble here isn't measuring wealth, it's measuring surplus. If you sell your widget for $5, that implies it was worth less than $5 to you and at least $5 to someone else, but the gain isn't $5, it's whatever the difference is between how much you valued it and how much they did. If that was $4.50 and $5.50 then it's $1. If it was $3 and $1500 then it's $1497, even though they only paid $5. Imagine, for example, a $5 generic drug to someone who has what it treats.
The problem is that this i.e. isn't right, because the vast majority of market transactions are not auctions. The value a pallet of rice would auction for is very different than the value a rice farmer would accept to load it onto a truck, which is very different than the value a supermarket would pay to get one a month deposited in its loading dock, which is very different than the sum of values individual consumers would pay for the bags on that pallet.
"My net worth fluctuates, and it goes up and down with markets and with attitudes and with feelings, even my own feelings." [1]
1: https://en.wikipedia.org/wiki/TrumpNation#:~:text=During%20d...
My opinion is the money is a means to an end and we’d be served better by focusing on those ends instead: healthcare, housing, education, life expectancy etc.
https://en.wikipedia.org/wiki/Big_Mac_Index https://worldpopulationreview.com/country-rankings/big-mac-i...
the utility of a toaster is different in different places.
It may also be the case that a toaster costing 5x in the US, because this is including an opportunity cost for that toaster being made (which means a different thing wasn't made).
Maybe toaster is not the best example to illustrate this by, so say we use microwave --and the time saving based off of it-- instead. A 100k/y worker's time savings are 5x the 20k/y workers savings when equal in time.
So the microwave is accepted to cost more. Sellers are great in caching in on this.
If I make 5x as much as someone in China and am willing to pay 5x as much for the same thing, at the end of the day we both just want toast. And if I buy a crappy toaster that only costs 2x as much and can only toast half as fast, “utility” (i.e. cost) says my toaster is still better despite it being an objectively worse toaster.
but the seller doesn't care about that. The seller will attempt to extract the maximum price of a toaster.
It is because americans are more productive, that their maximum price for a toaster is 5x that of china; they can afford to pay 5x. So this is a measure of their utility - not the ability to toast. An american finds that the ability to toast to be worth 5x that a chinese would be willing to pay for toast.
If america was poorer, the seller would not be able to sell the toaster for 5x (and instead would have to lower their price to match the price their customers can afford, up to the minimum margin the seller could afford to cut to).
and this is called intrinsic theory of value[0], which mostly has been superceded by other theories (such as the one in my post, which is the subjective theory of value[1]).
While the intrinsic theory of value isn't wrong per se, it is too naive, and "simple", such that this theory does not explain much when applied to real world scenarios.
[0] https://en.wikipedia.org/wiki/Intrinsic_theory_of_value
[1] https://en.wikipedia.org/wiki/Subjective_theory_of_value
Manufacturing plastic one use sponge bob toys are also real. Real and not particularly useful and perhaps not what most people imagine when they vastly overstate the importance of manufacturing to an economy.
Now jets and planes and military supplies is a real issue. But Manufacturing in general isn't how many tanks and fighter jets you can make at best it correlated.