me: >> This critique doesn't apply to me; I do not "attach a disproportionate >> amount of importance to" real GDP. (What would be the "proportionate" amount >> of importance, by the way?)<<
raghu: > For an advanced industrial society, a proportionate amount of importance is little to none. GDP would be useful to sociologists to study how much of social activity is mediated by market mechanisms. I can't think of any other use for it.< That position seems to assume that you are the only one who decides what's important and unimportant. The flow of money to buy commodities (i.e., GDP) seems pretty relevant to those people who are trying to make a living selling commodities (i.e., the vast majority of us in the US). Now we can and should criticize any single-minded attachment to monetary income on philosophical or religious grounds. But we have to realize that people have debts to pay, obligations to fulfill, etc. that under capitalism can only be dealt with money income. me: >> The _only_ reason to increase real GDP is that we live in a capitalist >> economy in which the availability of jobs is hooked to the real GDP. In case >> you haven't noticed, most people's livelihoods are mostly dependent on the >> health of the capitalist economy. We have no choice but to live within the >> belly of the beast.<< raghu: > I disagree. Why is unemployment necessarily hooked to GDP growth? If for > instance, the city of Los Angeles were to build an extensive public transit > system [extending the current inadequate train system], GDP would likely > decrease because of fewer automobiles, commuters, gasoline consumption etc, > but employment might very well increase because of the workforce required to > maintain and operate the transit system. And this is all entirely within the > framework of the capitalist economy.< The building and maintenance of the public transit system would both appear as part of GDP, since the city & county hire people and pays them wages, while hiring private contractors, again with money. To the extent that the public transit system encourages the L.A. economy and the hiring of labor-power, that shows up as GDP. I wouldn't expect this project to lower GDP at all. BTW, building the public transit system would not reduce the number of automobiles or gasoline consumption. As long as we've got these damned freeways, they'll be used (and stuffed to the gills). The public system would slow the growth of the use of cars and gas, but the growth rate would not become negative. Further, commuting wouldn't end but would rather shifts its relative weight to public transit. Ideally, this program would lower external costs. But I doubt that it would lower GDP. Among other things, the powerful L.A. business community would militantly oppose anything that hurt their commerce. > If our concern is with unemployment why bother with a proxy like GDP, when > unemployment can be measured and monitored directly (even if imperfectly).< The negative connection (all else equal) between real GDP and unemployment is often called "Okun's Law" but that's really just an empirical generalization. But it also appears in Harrod's growth model: if real GDP does not grow fast enough to compensate for the growth of (1) the number of people seeking paid employment and (2) labor productivity (as measured by the ratio between GDP and employed labor), then unemployment rises. Why use a proxy? As I've said, we live in a commodity-producing economy (whether we like it or not). Living in the belly of the beast, it's useful to have some indication of whether the beast is going to get indigestion or not. More generally, if you want to actually _understand_ what's going on (rather than railing against it), it helps to study it. The numbers in the GDP accounts help with this task. from the start of raghu's previous letter: >>>You cannot win this argument until you produce an alternative variable to >>>GDP growth. me: >> It's not my job to actually produce such an alternative. Since GDP is such a >> good measure of the capitalist pulse, this job will likely be left to a >> socialist society to do. Then, it will be democratic decisions that will be >> behind its construction (as I sketched before). I can suggest some ideas (as >> I did) but I can't produce such an alternative.<< raghu, now: > I have a better idea: how about we get over this notion that progress can be > measured in one single statistic that is supposed to be a monotonically > increasing function of time, and instead embrace the complexity of the world > as it is?< "progress" is a completely different issue. It's a normative thing. GDP is simply a positive effort to measure the operations of a commodity-producing society (though obviously a lot of bourgeois observers attach all sorts of bogus normative meaning to it). Maybe that's the source of the differences in this thread: you're talking in totally normative terms, while I'm also interested in positive issues (understanding the world). (BTW, I don't think that positive and normative issues can be separated. But it's good intellectual discipline to try to do so.) I'm totally willing to embrace the complexity of the world as it is. But fortunately or unfortunately, we live in a capitalist society which reduces all of this complexity to a single measure, monetary market value. We shouldn't ignore that fact. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
