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The choice of metric is a political choice, since it represents what we want to maximize. Thinking it is possible to have a single "objective" metric that would allow to rank progress in any country seems absurd ; thankfully most countries in the world have singular objectives for the evolution of their nation.

Saying that the well being of a nation can be summed up in a single indicator is framing of the political possibilities. Dumping GDP is necessary ; replacing it, maybe not.

But then the claim by economists of the possibility of finding an "optimal" state of the economy falls down. Maybe that claim has caused enough damages lately, any way...

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Wed Jan 28th, 2009 at 08:18:35 AM EST
The whole idea is ridiculous, yet our economic discourse is dominated by these sorts of numbers. Unemployment is another area where the metric is broken. We've basically been designing policies with the aim of optimising numbers that make little sense.
by Colman (colman at eurotrib.com) on Wed Jan 28th, 2009 at 08:23:41 AM EST
[ Parent ]
... the insane idea of "a" metric for something as complex as a national economy is not the cause for a quiet chuckle before getting back to work.

There are at least five purely economic macro-level goals ... full employment, moderately low inflation, high standard of living, improving standard of living, and sustainable external relations.

The idea that any one metric can encompass all five ... indeed, that any one metric can inform us about any one ... is laughable.

Most of the "critique of GDP" is criticizing one quite important number for being unable to do what no single number can do. And of course, framing the question as "what is the right metric" ensures that the question is never answered satisfactorily, because every single other metric will indicate something about something less well than GDP does, so it will not be "unambiguously superior".

Current dollar value of newly produced goods and services is something we need to keep track of. Modifying it to try to accomplish the impossible is like looking for an alloy with mercury that does a better job of turning lead into gold than pure mercury does.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Wed Jan 28th, 2009 at 08:53:56 AM EST
[ Parent ]
Full employment is already a policy goal - at least in the way the question is being currently asked. And it's a goal that skillfully hides the question of whether the current organization of human labor is changeable.

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Wed Jan 28th, 2009 at 10:35:09 AM EST
[ Parent ]
... abandoning full employment as a policy goal is a big part of what was Revolutionary about the Reagan Revolution. It went from being mostly lip service under Nixon, Ford and Carter to being actively undermined by monetary policy increasing interest rates in response to the threat of getting near full employment.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Wed Jan 28th, 2009 at 10:42:20 AM EST
[ Parent ]
What I meant was that setting up a measure of employment, whether or not you want it to be full, is already accepting the current notion of employment and its organization - which the Reaganites did, like all the others that "matter".

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Wed Jan 28th, 2009 at 10:56:43 AM EST
[ Parent ]
Yes, we can only measure employment under our current labor institutions. Even there, in the US, we have six different measures of unemployment, because it would be stupid to pretend that you can keep track of national unemployment with a single number ... and still, the mess media only reports U3.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Wed Jan 28th, 2009 at 11:01:47 AM EST
[ Parent ]

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