Why You Should Learn What is Wrong with the GDP Measure

Most of us run down a road paved by others, not realizing it’s not the only possible path—and, in fact, that it may be a path for the road-designers to achieve their goals, while preventing you from ever reaching yours.

This is a wonderfully educational and reasonably brief look at the history of “GDP” (Gross Domestic Product) and its roots in a terrible set of economic theories that justify government intervention in the economy—a top-down, elite-driven (and elite-benefiting!) system designed to enrich the “road-builders” at your expense.

[See also: “The Obamacare Storm & the Meaningless GDP Measure of an Impoverished Economy.”]

Maudling Economics, “Thoughts from the Frontline: GDP: A Brief But Affectionate History.”

A brief excerpt:

When most people see the release of the GDP number, they equate the precision of that statistic with the bottom right-hand number in their bank accounts. And news anchors and journalists rarely acknowledge the rather significant caveats that the Bureau of Labor Statistics publishes along with that data.

What we are going to find is that developing the concept of gross domestic product was more than a dry economic and accounting undertaking. At its very core, GDP is John Keynes versus Friedrich Hayek writ large. And their debate explains a great deal of the current tension between those who would make final consumption – or what we call consumer spending – the be-all and end-all of economic policy, and those who feel that productivity and income should instead be the focus. The very act of measuring GDP as we do gives the high and easy intellectual ground to those of the Keynesian persuasion.

Yes, I know… I know… this will likely stretch you, and introduce concepts with which you’re not familiar… learning is like that, but it’s well worth it. Read. Struggle. Understand… and find a measure of freedom.

[See also: “Obamacare-Induced Spending Shows How the GDP Measure Means Nothing.”]

It’s far past time to break the chains of Keynesian economics, but it won’t happen until more of us invest the effort to understand how such theories rule our lives, and move to reject them. My journey into macroeconomics began in about 1997 or 1998, and I’ve been ‘hooked’ ever since. You don’t need to dive as deeply as I have, but if you care about the future, you need to educate yourself to some degree about these topics that affect all of us, and our children and grandchildren.

[See also: “Using Prostitutes & Drug-Dealers to Boost GDP.”]

John Maynard Keynes chose a lifestyle that could never produce offspring, and his economic theories mirror his lust to live only for the pleasures of today, and to Hell with tomorrow. Ideas do have consequences, and Keynes’ massive personal flaws have led to the enslavement of much of the world for generations.