GDP easily becomes a lost purpose, but this argument could have been done more clearly. There are two unrelated things here to talk about:
a) Does GDP truly reflect the generation of value, or is it influenced by technical details in accounting, and how much? For example, if what was previously a gray economy (e.g. friends cooking at home for each other) becomes official economy (e.g. everyone eating in a restaurant), the measured GDP will increase simply because what was previously ignored becomes measured, even without any corresponding increase in productivity. Actually, pushing for artificially increasing GDP by making all gray economy regulated could decrease productivity (as e.g. the owners of the restaurant need to deal with paperwork they didn’t have when they cooked for their friends unofficially).
b) Do we care about total productivity of the country, or productivity per capita? Intuitively, people care about productivity per capita, because they care about their personal well-being. However, in certain contexts, such as international negotiation, having a large total productivity might be an advantage.
GDP easily becomes a lost purpose, but this argument could have been done more clearly. There are two unrelated things here to talk about:
a) Does GDP truly reflect the generation of value, or is it influenced by technical details in accounting, and how much? For example, if what was previously a gray economy (e.g. friends cooking at home for each other) becomes official economy (e.g. everyone eating in a restaurant), the measured GDP will increase simply because what was previously ignored becomes measured, even without any corresponding increase in productivity. Actually, pushing for artificially increasing GDP by making all gray economy regulated could decrease productivity (as e.g. the owners of the restaurant need to deal with paperwork they didn’t have when they cooked for their friends unofficially).
b) Do we care about total productivity of the country, or productivity per capita? Intuitively, people care about productivity per capita, because they care about their personal well-being. However, in certain contexts, such as international negotiation, having a large total productivity might be an advantage.