Development: Time to leave GDP behind | Hacker News Reader

Development: Time to leave GDP behind

nature.com

10 pointssveme4 comments

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.

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.

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!

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.)

Reply on news.ycombinator.com