Originally published at: https://boingboing.net/2018/06/15/gatsby-with-guillotines.html
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The madness of GDP as a measure can’t be overstated. It’s doesn’t take into account debt.
So, imagine two households with same income. One household buys a new car every couple of years, has a vacation home, always has the latest toys, but is absolutely riddled with debt to pay for all this crap. The house next door has 10+ year old cars, maybe doesn’t travel so much, fixes things rather than buying a new one, but has no debt and puts that money in the bank.
By a ‘gdp’ measurement, the 2nd household is in terrible shape.
And the fact that you can’t liquidate student debt in bankruptcy court anymore?!? It’s hard to see that as anything other than defacto slavery.
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What’s more interesting is the economist who came up with GDP was against using it beyond a general metric of economic activity. But the cat was out of the bag when people love their fancy numbers as if one number is better than another morally speaking.
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Time for a revolution!
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You can’t really compare a household budget to a full economy. Economies depend on money constantly moving to keep commerce going. It’s a crude measure of work. Sure it glosses over a tremendous amount of detail and can be gamed, but the assumption is that on a macroeconomic scale it gives you a good first order approximation of how much stuff is getting done.
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In their heart, ‘human’ means ‘rich person’, and anything that increases their power to get us to do things they want that we’d rather not is human thriving’.
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s/human thriving’/‘human thriving’/g
As I noted elsewhere, a booming economy is not necessarily the same thing as a healthy one. The current economy may be bearing fruit, but for 80% of the population (at least) in our late-stage capitalist society it’s kept out of reach.
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Easy fix?
REFUSE ANY FORM OF DEBT. REFUSE to pay debt fueled prices for housing, instead MOVE to rural areas and build your own home using your own hands with CASH. Remaining in areas with high housing costs is a choice. You can arbitrage vs “everywhere else”.
Vote! Stop this game where banks can put you into debt for their benefit through the federal reserve, then use those stolen funds to drive up the prices of necessities.
Vote! Stop those plantation owners in their tracks by firing any politician sympathetic to cheap labor. Hard, difficult work SHOULD pay higher than ANY bullshit “administrative” task. Only reason it does not? Imported slaves. We’ve always had a problem with slavery in this country. It’s a fight which will never end.
As flawed as GDP is as a measure of the economy stock market indexes are even worse. The reason that the stock market is so overused is that it is available every day., That gives the press something to talk about every day. The good thing about it as a measure is that it is based on a broad consensus of people spending real money, often their own.
But it is an estimate of future stock prices, and with P/E ratios down, it is mostly a measure of INFLATION in the cost of stocks. It has little to do with the value of anticipated dividends, or indeed the long term profitability of companies.
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Bullshit.
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“[E]veryone, even in countries like the US, are being reduced to effective debt slaves. The greatest social evil of antiquity was precisely this: people would fall so deeply in debt that they would end up selling their children into slavery, even, finally, themselves. But you know, if Plato or Aristotle were somehow magically transported to modern America, would he really see matter here as all that different? Sure, we no longer sell ourselves to employers, we rent ourselves. But for anyone from the ancient world, such a distinction would be at best a legalism. They’d probably consider most Americans to be debt slaves, and would they really be so wrong to do so?”
– David Graeber, interview (August 2011)
Update: added link.
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“Economies depend on money constantly moving”
No, they do not. GDP does depend on that, but an economy is a way of filling human needs, without specifics as to how that happens.
Imagine instead those two houses are one which pays for child care, frequent car repairs, and fancy meals out. The other house provides thier own child care, does their own automotive maintenance, and cooks at home (and maybe only needs one income as a result of these things, allowing time for them). The level of economic activity is by definition the same, because the same services are being provided.
Its not even a “crude measure of work”, because a lot of the “constantly moving money” is just financial churn.
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Taz–As attractive as the move-to-the-country-and-eat-a-lot-of-peaches model of rugged individualism might seem at first, I do wonder about how one funds and maintains it. Those low-housing-cost rural areas have been emptying out for the best part of a century thanks to the scarcity of jobs and the decay of the old agricultural-network economy.
I’m not going to even start on the “build your own home with your own hands” part. Back in the middle of the previous century, my father gradually rebuilt our out-in-the-sticks century-old family home. It was an enormous amount of work and required the whole range of his quite considerable skill sets. And he often said that without time payments (that is, credit, which is to say debt), he wouldn’t have had shit. (He said the same thing about unions.)
Of course, that credit, extended by a bank or a merchant, was limited by the rationality of both the Dad and the lender. And Dad had a steady, decent job with GE, a company that, thanks to the efforts of the unions, treated its employees quite well. There are parts of the country where those conditions never applied, and others where they did but have been squashed flat. Move to West Virginia, anyone? I visit there regularly, and as lovely as it is and as much as I respect and enjoy the people, I would not retire there. The same goes for other, similar parts of the country I know pretty well. It’s a Spanish pipedream.
Vote–absolutely. But that’s the long game. The desire for quick fixes via electoral politics is part of what got us our current gang of bandits-in-office.
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Thank you. They are going up everywhere. What am I supposed to do, sell this house, live out in the snow in a hut, and die because I can’t get the medical treatment I need? It’s not like this is Manhattan or something. I’m already in fucking Texas as far out as I can get while still being able to access what I need within a two hour drive. Even out here brand new houses are being bought up immediately as investment or for rentals because there’s almost nowhere to live anymore. Rents just get higher and higher. It’s just not working and it’s not going to work because just because some people ran away from the problem to spread it out further. All you manage to do is shove some of the burden from yourself onto less privileged people. Honestly… I’m sick of these self-satisfied not answers. People just fucking stop it already. We’d all be DOING IT if it was THAT FUCKING EASY! It’s this kind of lazy masturbatory stories people keep telling to congratulate themselves on being lucky and to convince themselves they’re somehow superior to others that got us in this mess. No answers from anyone in that crowd please, you’ve done enough fucking damage to others with that attitude.
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On so many levels I don’t know where to start. I really do wish cranks like this would try to implement their own “easy fix” fantasies starting with themselves, since it would allow the grown-ups more room to work on real solutions.
Unless one is already a millionaire, that back-to-the-land scheme has zero chance of ending in anything other than death from starvation or exposure. And unless that millionaire is a dimwitted heir or a nutcase he’s not going to waste time and energy on such a project in the first place.
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Just like much of the rest of that comment. It’s already been well established that most employment opportunities exist in urban areas, so the idea that one can just up and magically transport oneself and one’s family to rural areas is not only a nonviable solution; it’s little more than a fantasy.
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What do you mean, “employment”? You’re supposed to live off the land, like a True Rugged 'Merican! /s
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People doing work for themselves is considered to be one of those unimportant details that get swept under the rug when looking at macroeconomic issues. It’s basically assumed that the amount of that going on is too small to really affect the big picture, and it happens at a roughly fixed rate in an economy. These are rough assumptions, but they are not without merit.
At the end of the day GDP is a flawed statistic, but the alternatives tend to be much much more complicated and similarly problematic.
I think your issue is that you’re thinking about human needs. The closest economists come to thinking about people is their vague ideas about “utility”. Their job is to study money in its myriad forms and how money structures power in society.
