Re: Critical Take On GDP in the FT
Posted: 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.
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?