Skip to main content

GDP - grossly distorted phigures

There's a fascinating article in New Scientist about the shortcomings of GDP as the measure of a country's economic success or failure.

From the green perspective, GDP is fundamentally flawed, simply because it doesn't have a green perspective. It takes no account of the impact on the environment of a country's actions, giving no benefit to undertaking measures to save the planet.

But even without this inherent short-termism, there are some downright weird things in there. There are silly book-keeping measures (people who own houses are considered to pay themselves rent to live there), there is no value whatsoever given to state services like the provisions of the NHS or education services, and the measure fails to reflect the actual meaning of expenditure. The article gives a good example that having your roads gridlocked increases your GDP, because it takes into account the spending on the fuel that gets wasted, but doesn't take into account the time wasted and general negative impact on quality of life.

The article goes on to describe potential alternatives - it seems clear that there's a fundamental flaw in the idea that you can describe the economic health of a nation in one number. It's a bit like the IQ fallacy - IQ is nothing more than a measure of ability to do IQ tests. You need many more pieces of information to give a real picture of an individual's mental capabilities. Isn't it time we faced up to the fact that GDP also is meaningless and stopped giving so much weight to it? GDP is like a TV celebrity - all show and no depth.

Comments

Popular posts from this blog

Why I hate opera

If I'm honest, the title of this post is an exaggeration to make a point. I don't really hate opera. There are a couple of operas - notably Monteverdi's Incoranazione di Poppea and Purcell's Dido & Aeneas - that I quite like. But what I do find truly sickening is the reverence with which opera is treated, as if it were some particularly great art form. Nowhere was this more obvious than in ITV's recent gut-wrenchingly awful series Pop Star to Opera Star , where the likes of Alan Tichmarsh treated the real opera singers as if they were fragile pieces on Antiques Roadshow, and the music as if it were a gift of the gods. In my opinion - and I know not everyone agrees - opera is: Mediocre music Melodramatic plots Amateurishly hammy acting A forced and unpleasant singing style Ridiculously over-supported by public funds I won't even bother to go into any detail on the plots and the acting - this is just self-evident. But the other aspects need some ex

Is 5x3 the same as 3x5?

The Internet has gone mildly bonkers over a child in America who was marked down in a test because when asked to work out 5x3 by repeated addition he/she used 5+5+5 instead of 3+3+3+3+3. Those who support the teacher say that 5x3 means 'five lots of 3' where the complainants say that 'times' is commutative (reversible) so the distinction is meaningless as 5x3 and 3x5 are indistinguishable. It's certainly true that not all mathematical operations are commutative. I think we are all comfortable that 5-3 is not the same as 3-5.  However. This not true of multiplication (of numbers). And so if there is to be any distinction, it has to be in the use of English to interpret the 'x' sign. Unfortunately, even here there is no logical way of coming up with a definitive answer. I suspect most primary school teachers would expands 'times' as 'lots of' as mentioned above. So we get 5 x 3 as '5 lots of 3'. Unfortunately that only wor

Which idiot came up with percentage-based gradient signs

Rant warning: the contents of this post could sound like something produced by UKIP. I wish to make it clear that I do not in any way support or endorse that political party. In fact it gives me the creeps. Once upon a time, the signs for a steep hill on British roads displayed the gradient in a simple, easy-to-understand form. If the hill went up, say, one yard for every three yards forward it said '1 in 3'. Then some bureaucrat came along and decided that it would be a good idea to state the slope as a percentage. So now the sign for (say) a 1 in 10 slope says 10% (I think). That 'I think' is because the percentage-based slope is so unnatural. There are two ways we conventionally measure slopes. Either on X/Y coordiates (as in 1 in 4) or using degrees - say at a 15° angle. We don't measure them in percentages. It's easy to visualize a 1 in 3 slope, or a 30 degree angle. Much less obvious what a 33.333 recurring percent slope is. And what's a 100% slope