Critical Take On GDP in the FT

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Re: Critical Take On GDP in the FT

Postby DT Cochrane » Wed Nov 19, 2014 7:59 am

joefrancis wrote:It gets even worse when historians start citing GDP statistics. Can any estimate of China's GDP per capita in 980 be at all credible? I would also argue that for some countries (such as Argentina, in this case) GDP statistics even for the twentieth century can be highly misleading, yet economic historians continue to treat them as if they represented something real (again, see the Argentine example).

The interesting question raised in the FT article is what to replace GDP with. Most of the alternatives discussed actually incorporate GDP – a third of the UN's human development index, for instance, is made up the standard GDP statistics.


Hey Joe,
I just revisited this threat and it struck me that the issue of what to replace GDP with is relevant for trying to understand contemporary well-being. However, trying to project any such aggregating measure back into the past is going to be very problematic. So, although we could probably construct decent estimates for the developed countries from the second half of the 20th century on based on an alternative measure simply because of the unprecedented scale and scope of data gathering, we'd run into the same problems as GDP if we extrapolate to under-developed and developing countries - even those labels have GDP-bias build into them - let alone into the distant past.

So, that raises the question of how historical quantitative data might serve as a substitute for these questionable, even laughable, historical estimates of GDP. There is some pretty impressive extant financial data that could serve as fodder for quantitative data. The question, for me, is how they might be deployed in a way that can demonstrate changes in the well-being of the masses and/or the power of the elite.

Any thoughts? How have you grappled with the troubled data on Argentina?
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Re: Critical Take On GDP in the FT

Postby blairfix » Thu Nov 03, 2016 1:24 pm

Here is a great article about the agonizing lengths that physicists are taking to define their fundamental units:

https://www.sciencenews.org/article/uni ... al-upgrade

It represents a stark contrast to the shenanigans in economics, where the basic units are either poorly defined or do not exist at all.
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Re: Critical Take On GDP in the FT

Postby rsalisbury » Fri Nov 04, 2016 12:48 pm

I know this is an old thread, but this is a topic that interests me: I find the idea of an energy-based (or emergy-based) currency much more problematic than I have ever seen anyone admit.

For one thing, capitalization would still be possible. This is really true of any currency, but perhaps because CasP came long after most of the discussion of energy credits, no one acknowledges this as a weakness.

Worse, there is a problem that I have been calling the Generator Paradox: If you use your energy credits to buy generators, then you can "print" your own credits. Energy generation would quickly become centralized and controlled by a few people.

I think the distribution of Bitcoin mining power gives us an analog: Bitcoin is another currency that can be created using some sort of equipment. Early on the idea was that anyone could mine coins and so the network would be highly distributed. Quickly, though, people started building server racks full of GPUs to capitalize mining power. Now, not even racks of GPUs are adequate, as there are now ASICs that are designed for bitcoin mining. Today, over half of the mining power is in the hands of three firms. Capitalization and a creorder of technical infrastructure quickly centralized what was intended to be a distributed, peer-to-peer network and process.

Rather than having a financial investor class that ordains selected subjects with temporary control over capitalist hierarchies, we would just have an energy investor class doing the same thing. Hell, if "energy capitalists" are in control of production, they could even engage in inflation without even destroying the accuracy of the energy credits as a unit of measure. All they would need to do is make products more energy-intensive to produce.

Finally, I'm not even sure energy credits would make complete sense: How much energy is someone's time (labor) worth? The number of calories they consume? Some arbitrary number?
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Re: Critical Take On GDP in the FT

Postby DT Cochrane » Mon Jan 16, 2017 6:11 am

I agree. Trying to locate some absolutely objective basis for value is a fool's errand. It seems like the history of value theory is one of trying to set aside the inter-subjective aspect of value construction. This setting aside occurs both in trying to theorize how value is constituted and how it ought to be constituted.

CasP acknowledges the inter-subjective aspect. I've argued that value construction is also quasi-objective, since objects also have something to say about our production, exchange and consumption experiences. But, I don't think any aspect of objects could serve as a universal determinant of value.

The question is how we design a humane system of value that takes objects seriously, without granting them absolute determinacy, and recognizes value as an inter-subjective entity.

rsalisbury wrote:I know this is an old thread, but this is a topic that interests me: I find the idea of an energy-based (or emergy-based) currency much more problematic than I have ever seen anyone admit.

For one thing, capitalization would still be possible. This is really true of any currency, but perhaps because CasP came long after most of the discussion of energy credits, no one acknowledges this as a weakness.

Worse, there is a problem that I have been calling the Generator Paradox: If you use your energy credits to buy generators, then you can "print" your own credits. Energy generation would quickly become centralized and controlled by a few people.

I think the distribution of Bitcoin mining power gives us an analog: Bitcoin is another currency that can be created using some sort of equipment. Early on the idea was that anyone could mine coins and so the network would be highly distributed. Quickly, though, people started building server racks full of GPUs to capitalize mining power. Now, not even racks of GPUs are adequate, as there are now ASICs that are designed for bitcoin mining. Today, over half of the mining power is in the hands of three firms. Capitalization and a creorder of technical infrastructure quickly centralized what was intended to be a distributed, peer-to-peer network and process.

Rather than having a financial investor class that ordains selected subjects with temporary control over capitalist hierarchies, we would just have an energy investor class doing the same thing. Hell, if "energy capitalists" are in control of production, they could even engage in inflation without even destroying the accuracy of the energy credits as a unit of measure. All they would need to do is make products more energy-intensive to produce.

Finally, I'm not even sure energy credits would make complete sense: How much energy is someone's time (labor) worth? The number of calories they consume? Some arbitrary number?
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