Examples of GDP as a weak measure of progress/ productivity.

[bic_cherry]

GDP: an inadequate measure of progress/ productivity.

Just sharing here, my response regarding the same topic at another forum.
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GDP: an inadequate measure of progress/ productivity.

Thread topic: 'Interest rate' solution to inflation- a case of mere optical illusion?

you really got a very weird thinking there.

An accident like the Fukushima nuclear disaster can also increase GDP too: e.g. 'Fukushima cleanup could cost up to $250 billion'- unnecessary work and expense if only the safety aspects of managing the reactors had been better considered.

can you tell me how does a natural disaster increase the GDP of that country? Before a massive reconstruction is to take place, the whole bloody economic system is crippled and you have no OUTPUT for some time. After the crisis, then only reconstruction can take place. But after reconstruction, the economic level may not reach the pre-crisis level. In the end, its still a net loss to the economy. What is happening right now is a very good example. Since the Japan Earthquake and Thailand Flood, the world's economy is still in a doldrum.

Hi Mike, what I understand about Gross Domestic Product (GDP) is that its a very very gross calculation of productivity: one that includes both good as well as bad.

GDP per se is a very gross and oft arbitrary measure as I explain. Suppose I asked you what was the GDP of an imaginary (undiscovered) tribal community of 100 living in isolation from civilization- your answer would either be "don't know" or quite possibly "zero" since such a subsistence culture does not requisite the need for currency in their daily interpersonal transactions- honour/ barter systems suffice- yet the community continues to thrive in so far as they have done so for eons. To state that such a tribal community were inferior to that of say Swiss society (high GDP) without further specifications would be presumptuous if not chauvinistic to say the least- the wide difference in GDP of each society being largely the consequence of the establishment of local currency and exchange rates- subsistence farmers eat/ barter their own produce rather than trade it for money- thus the 'lower' perceived GDP. In short, the isolated tribal community is no less a society merely because it does not have a complex and complicated financial system as the so call industrialized countries have, "not everything that counts can be measured and not everything that can be measured counts"~ A Einstein.

There are also many versions of GDP presentable- for one, the per capita GDP of Fukushima has certainly gone up by many folds- once possibly a thriving community based upon tourism and nuclear energy related industry, 20+km of peri-nuclear reactor area is now a nuclear no-go zone only admissible to nuclear clean-up/ monitoring teams- so ironically, per capita GDP has increased multifold- due both to the exodus of communities and clean up operations.

Also, I have even read of clean up bill calculations higher than the USD250billion quoted- just depending on what you total- annualized, his could also possibly be higher than the original GDP of Fukushima prior to the disaster- e.g. fishing village/ nuclear energy facility: again suggesting that GDP is an inappropriate description of human development.

The 2011 BP Oil Spill is another example of an avoidable disaster now estimated to cost US$40billion in costs [Huffingtonpost.com]- compensatory and clean up- would the area's GDP rise with an intensive rebuilding and clean up effort now active in the affected areas?- Quite possibly: yet with the exception of the depraved, who would suggest that the oil spill was in some way productive despite some GDP related parameters 'progressing'?

Rgds,
C6

 

[tonychat]

Re: GDP: an inadequate measure of progress/ productivity.

What do you expect from a sinkie govt, they are sinkies. If you want something that does not insult human intelligence, go for ang mor.

 

[erection2015]

Re: GDP: an inadequate measure of progress/ productivity.

ya ya ya ...the recent thailand floods and japanese earthquake were also because of sinkie govt. Europe's economic woes also can be laid on us ballsless

sinkies and our govt.

What do you expect from a sinkie govt, they are sinkies. If you want something that does not insult human intelligence, go for ang mor.

 

[Cerebral]

Re: GDP: an inadequate measure of progress/ productivity.

Something I don't quite understand. SG is predominently an export led economy. How does a very high gdp benefit its people?

 

[bic_cherry]

Re: GDP: an inadequate measure of progress/ productivity.

Something I don't quite understand. SG is predominently an export led economy. How does a very high gdp benefit its people?

Hi 'Cerebral', what I was just trying to drive at in my excerpted discussion with 'Mike*******' was that GDP remains a very unsubstantiated definition of human progress since it measures everything 'economically measurable' regardless of whether it's good or its bad. The cost calculation examples of clean-up cum compensatory costs arising from the 2 recent predominantly man-made disasters used- illustrate clearly how for a time period, even man-made disasters can increase regional GDP at least temporarily.

In this context of GDP measurement, I'm thus less concerned about whether Singapore's GDP is export or consumption based as a high GDP can arise from either source. I believe that both the Greek and US (and many other debtor nations) have overstated their GDP for perhaps the last decade due to the fact that many of these states GDP were and perhaps remain consumer (consumption) driven- which would have been dandy and fine, except for the fact that the source of such consumption was BORROWED money (thus the national debt crisis these states are currently in). The party simply crashed when creditors either withdrew credit or stopped lending- thus the debt crisis that Greece remains mired in.

In regard to your comment about the "high gdp [of Singapore] benefit its people" the million dollar question is thus the current point of contention within society today: are low wage workers underpaid? Whilst per capita GDP of Singapore is indeed high, there remains an ever widening gap between rich and poor in Singapore.

Perhaps more rebates and transfers to poorer Singaporeans will have to be institutionalized if Singapore is to remain a united and cohesive society. Just as all men serve 2.5years as brothers in national service to the best of their ability, with another up to 30 yrs extra of reservists liabilities, should it be acceptable for some brothers should enjoy way more benefits of a high national GDP than the others? That is the question facing SG society and many other societies in the world at this juncture I believe.

BTW, France has just elected a more socialist leaning President (Francois Hollande) as the people want more welfare and less austerity going forward as joblessness (especially amongst the young) climbs- the old capitalistic old way of merely socializing losses amongst all citizens is no longer acceptable as the populace also demands socialism of profits (high GDP) too.

The challenge for all politicians now is now that of delivering welfare without the need to borrow excessively (nobody will lend a country like Greece any more $$$ soon anyway since they halved their debt recently not by repayment but by quasi-bankruptcy applications)- perhaps tax reforms (more GST/ property/ income taxes and more efforts at arresting tax evaders) to allow for more rebates towards poverty alleviation might be the game of the day. Will Francois Hollande perform- only time will tell.

Rgds
B.C.