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comment by kleinbl00
kleinbl00  ·  2273 days ago  ·  link  ·    ·  parent  ·  post: How money is failing

    So far, it seems like this fictitious consumer has been in love with new technology. No attempts are made to adjust for the downsides. No statistics office, as far as I know, has tried to calculate the effect of advertising, distraction or surveillance as negative qualities.

This is inaccurate. Even the conservatives are ragging on GDP these days (it helps that it was instituted under FDR, and no conservative worth his salt will pass up a chance to rag on FDR):

    That’s easy enough, but the calculation ignores whether those are the right components and how to define them. The result is a lot of potential distortion. For example, very little happens to GDP if you do your own housekeeping. You consume some cleaning products, but your labor doesn’t count, no matter how long you scrub. But the labor does count toward GDP if you hire someone and pay that person to do the exact same work while you take a nap. The hired labor “produced” something of value, and you did not.

    To an economist, a barrel of oil selling for $100 has the exact same effect on GDP as two barrels of oil selling at $50. Silly, but that’s the way the accounting works.

This dissatisfaction is long-standing:

    GDP is one economic model among several that could serve the purpose, but its use conveniently leads to policies that reflect the thinking of a particular school of economic monetary and fiscal policy advocates.

We actually only started using GDP in 1991. Before that we used GNP, Gross National Product, which doesn't track foreign investments as well. Welcome to globalization.

Other measures have been proposed:

    We propose a two stage reform. The first involves three straightforward amendments

    to GDP: accounting properly for intangibles; removing unproductive financial

    investment; and adjusting for income distribution. These alone will make GDP a

    better measure of economic welfare. Official statisticians could implement this first

    stage relatively easily.

    The second stage is a more radical replacement of GDP with a small dashboard

    recording access to six key assets: physical assets, natural capital, human capital,

    intellectual property, social and institutional capital, and net financial capital. This

    balance sheet approach to measuring the economy will embed sustainability, which

    GDP never can because it records only flows of income, output, or expenditure. Our

    proposed approach will also account for whether or not individuals have access to

    the assets they need to lead the kind of life they want; this, rather than being able to

    buy more goods now, is the key to economic welfare.

And really, other indexes are already tracked:

    The Social Progress Index is an aggregate index of social and environmental indicators that capture three dimensions of social progress: Basic Human Needs, Foundations of Wellbeing, and Opportunity. The Index measures social progress strictly using outcomes of success, not how much effort a country or community makes. For example, how much a country spends on healthcare is much less important than the health and wellness actually achieved by that country, which is what outcomes measure. The image below shows the component-level structure of the 2017 SOCIAL PROGRESS INDEX, which has 12 components (shown) and 50 indicators (not shown).

So while I agree with this statement:

    Let’s learn together how to talk about inequality in terms that are not monetary, just like we have learned how to talk about justice without reference to a god.

It's uninformed to argue that these talks haven't already begun.





user-inactivated  ·  2272 days ago  ·  link  ·  

Good point, I think it comes down to this being a short opening talk among many at an art/media festival. Not much room to be nuanced and expand on ideas when sharing the scene with these guys if you want to leave a mark on the audience. Apparently he wrote a longer piece in a Swedish magazine which I will try to find, and there's also a research project planned.

kleinbl00  ·  2272 days ago  ·  link  ·  

GDP/"growth" is a metric. Everyone wants to use the metrics that best reflect their values. I seriously doubt any mainstream economists are going to start using the Social Progress Index any time soon but that doesn't make it invalid.

So in a way, yeah, "money" is failing... but it's more accurate to say that the value system of the world economic community is failing.

Which people like this have been saying since 1900 AD.