Robert F. Kennedy and the meaning of the GDP

[dbev]

http://www.youtube.com/watch?v=77IdKFqXbUY

Forty years ago, Robert F. Kennedy challenged the basic way we measure progress and well-being in America.

http://www.glaserfoundation.org/program_areas/measuring_progress.asp

How we measure progress reveals our values and shapes our future. So what does America's portrait of progress tell us about our collective values and goals? The traditional portrait presented by most of our media and political leaders includes the Gross Domestic Product (GDP) and stock market. But do such measures really reflect our most cherished values and aspirations? In his first major campaign speech on March 18, 1968, Robert Kennedy warned against measuring ourselves by wealth alone:

Too much and for too long, we seem to have surrendered personal excellence and community value in the mere accumulation of material things. Our Gross National Product, now, is over eight hundred billion dollars a year, but that GNP — if we judge the United States of America by that — that GNP counts air pollution and cigarette advertising and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwoods and the loss of our natural wonder in chaotic sprawl. It counts napalm and it counts nuclear warheads, and armored cars for the police to fight riots in our cities. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children.

Yet the Gross National Product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans.

[hippifried]

I have a problem with accounting systems, & therefore ecenomic philosophy, all the way around. Some countries have been trying to develop various versions of a "happiness index", but how do you tabulate intangibles with numeric valuations? I don't think it's possible. There's only so much you can put a number on. The ecological footprint & life expectancy could & probably should be factored into GDP, but I'm not sure exactly how. Returning to localization won't help, but the global economics has been coopted by international exchanges. I believe we need a total economic rethink. This shit ain't working. This isn't Adam Smith's world anymore.

[trish]

Early in the last century, the story goes, an anthropologist asked the chieftain of an African tribe why they don’t farm, mine, cut timber and trade for a living. The chieftain said, “Why should we work when there are so many mongongo nuts?”

The moral of story is obvious. Happiness and well being are not related to gross domestic product in any necessary way. Often the GDP just reflects how long and hard people are working to increase the wealth of their employers and stock owners. The revenue of the auditorium and the fight manager isn’t always reflected in the earnings of the boxer.

Wealth is created by people who labor to extract raw materials and by those who labor to produce a product from those materials. Ownership of those products is claimed by, and granted to, those who gambled the initial capital and those who now collect the revenues. In this way the actual producers are separated, right at the factory, from the wealth they produce. The gradient runs downhill from the source (the laborers) to the sink (the stockholders). The wealth runs down the gradient and collects in huge sheltered reservoirs. This is the way wealth is redistributed in almost all modern western economies. It is obvious why "trickle down" doesn’t work and never will: wealth doesn’t flow against the gradient; it doesn’t flow from sink to source. "Trickle down" is a misnomer, it should be called "trickle up."

Until this sorry arrangement changes, GDP will never serve as an adequate measure of a nation’s “happiness.” I think the happiest human beings have left this Earth a long time ago. They were few and far between. Out of fear and paranoia, we moved them off their Pacific atolls and blew up their paradise to test our latest weaponry.

[thx1138]

Happiness is a luxury many people can't afford. It's now become a Darwinian struggle for survival thanks to globalism.

[thx1138]

The doctor is in.

[BrendaQG]

We measure prosperity and progress by GDP because it is convenient. Overall GDP is misleading. i.e. the GDP can be increased by any economic activity such as cleaning up after a major disaster.

Under normal circumstances the way to look at general prosperity in a country is to look at it's GDP per capita, as well as the cost of living, and how many people fall below the poverty level for that country. Looking at the poverty level, and cost of living takes into account just how many people are in poverty, and how hard it is to remain in the middle class.

Now I have heard what could sound like socialist, "From each according to his means, to each according to his needs," sounding talk here. In practice that almost never works.

Take a look at GDP Per capita PPP (Purchasing Power Parity) which takes into account cost of living in each country. (http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita) None of them are so called socialist states. Some have socialized medicine. Many of the oil producing states on that list have a state, or royal family owned oil company... none have redistributed wealth, or a totally centrally planned economy.

All of that said. Someone invented a mathematical formula and indexed so called human development (http://en.wikipedia.org/wiki/Human_Development_Index). Looking at that list, many of the countries in the top 20 in terms of GDP per capita are also in the top 20 in terms of human development index, though not in the same order. Almost all of the top 20 GDP per capita PPP countries are in the top 30 in terms of human development index. Notice again none of the top 30 countries in terms of human development index are socialist states.

What does that tell us? That quality of life is correlated to GDP per capita PPP. Basically money may not bring happiness but it makes it allot easier to be happy!

I would be in favor of linking our economic outlook more to human development index, the raising of which must bring economic prosperity with it for the majority, as well as the to 2%.

[hippifried]

We measure GDP because that's all we know how to measure.
Somebody came up with a formula & everybody else jumped on the band wagon.

I wonder if we'd even be having this mathematical conversation if humans had developed 6 fingers on each hand.

[trish]

The GDP of the USA is about 13.8 trillion dollars and the current population is 306 million. The ratio is about 45100 dollars per capita. That’s pretty close to 47025 which is what the IMF reports to be our 2008 PPP. Nations with higher PPP include Brunai 50536, Singapore 51649 and Qatar 86570. How this ratio measures a typical person’s quality of life is a mystery. If the distribution of a nation’s wealth amongst its people is skewed, the modified mean represented by the PPP is meaningless. A simple median annual income would be much more informative, which for the USA is about $26000.

The GDP is the value of the goods and services a nation produces. Those goods and services are produced and provided by laborers who are not generally granted even part ownership in their product. The people who actually work to produce wealth are immediately dispossessed of it as soon as it’s produced. The revenues go to the gamblers, who already had a sufficient pool of resources to take a risk on the stock market. In other words, wealth rolls downhill from its source to pool in the tax sheltered reservoirs.

Now let’s not get carried away here. I’m not at all claiming we need to take possession of these privately owned reservoirs and redistribute their contents. I’m just pointing out the distribution of the planet’s wealth is already the result of a redistributive dynamic: wealth rolls down the gradient from its sources to its sinks. There is no natural mechanism that will cause it to substantially flow back up that grade. I’m not advocating "from each according to his means, to each according to his needs," but it would be nice if each person got at least what they deserve.

[thx1138]

bush suicidal