GDP is a proxy for 'amount of work done that people were paid for'.
If I pay Fat Tony to break your legs, and then you pay a doctor to put them back together, this whole adventure increased GDP, but is a net-negative-sum activity.
"People have to do more work to accomplish the same amount of results" isn't a worthy goal in itself.
And me not working due to broken legs is somehow not relevant to the GDP? My capital being misallocated is not relevant to GDP? I think your example is quite likely to lower GDP...
> My capital being misallocated is not relevant to GDP?
It's not. If I steal a million dollars from you, the net impact on GDP is ~0. Hell, if you were keeping it in your mattress, and I spend it on drugs and parties, GDP will actually go up.
GDP is a useful number, but it's not the only useful number.
GDP is a proxy for 'amount of work done that people were paid for'.
If I pay Fat Tony to break your legs, and then you pay a doctor to put them back together, this whole adventure increased GDP, but is a net-negative-sum activity.
"People have to do more work to accomplish the same amount of results" isn't a worthy goal in itself.
And me not working due to broken legs is somehow not relevant to the GDP? My capital being misallocated is not relevant to GDP? I think your example is quite likely to lower GDP...
> My capital being misallocated is not relevant to GDP?
It's not. If I steal a million dollars from you, the net impact on GDP is ~0. Hell, if you were keeping it in your mattress, and I spend it on drugs and parties, GDP will actually go up.
GDP is a useful number, but it's not the only useful number.
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Unless you earn more than the 200k the doctor was paid plus the 50k Fat Tony rightfully earned, the GDP grew.
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