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How do we eliminate GDP?

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Fephisto Posted: Thu, Jun 12 2008 10:06 AM

How can one go about abolishing the GDP as a widely-used measure?  (I'm not asking how one can go about actively destroying the GDP of other countries)

I think, even if one is to accept a utilitarian framework, that the GDP is quite a flawed unit of measure, advocating avid consumerism when really there should be nothing wrong with a person saving, advocating a full-fledged broken window fallacy (http://cafehayek.typepad.com/hayek/2005/08/death_taxes_and.html), and entirely ignoring fairly large parts of the economy (drugs, for example).

 

But really, the reason I'd personally like to see it gone, is because I tend to see units of measure made by the government as a means for economic planning (I know for some of you that's fairly obvious).

 

What do you guys think?

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fsk replied on Thu, Jun 12 2008 10:21 AM

If you think people who talk about GDP are stupid/misleading/fools, then stop paying attention to them.

I wrote two articles on GDP.  The "official" inflation-adjusted GDP statistic is wrong, because the CPI is far less than the true inflation rate.  If you use M2, M3, or the price of gold as your index of inflation, then the picture of the US economy is very bleak.  If gold is your index of inflation, then the US economy is shrinking at an annualized rate of 8% per year since 2001!

 

I have my own blog at FSK's Guide to Reality. Let me know if you like it.

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Sage replied on Thu, Jun 12 2008 10:57 AM

I guess the key is to prove that mathematic, empirical economics is wrong, and that praxeology is the only true economics.

Just like geocentrism was proved wrong by heliocentrism.

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That doesn't invalidate measures such as GDP though - all it does is show facts alone cannot be used to derive valid theories; remember, Austrians don't deny the worth of empirical studies per se. Rather, what you need to dislodge GDP are better tools of measurement, like those proposed by Reisman, Skousen and Rothbard.

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