RFK on the Inadequacies of GDP as a Measure of Well-Being

This is a campaign speech from March, 1968:

[via the other EV]

Comments

[Better]

Increased GDP from productivity gains has the potential to increase the general standard of living, if it is not redistributed away from the regular person via inflation. Increased GDP from forcing people to work longer tends to reduce the quality of living. Regressive taxes do just the latter (inflation, property, sales, etc...)

The Amish manage to retire at age 50, using no virtually modern technology. We should be able to do better using modern methods. There is just too much inflation and other regressive taxes burdening the ordinary person, so they have to work longer and harder just to stay in place.

[Gabriel]

I'll stick with those pretty Gapminder correlation when it comes to the meaningfulness of GDP as a measure of progress.

[adam p]

i always thought there should be a video to accompany what i list as my favorite quote on facebook

[Ronald Rutherford]

Dr. Thoma, maybe you have already addressed this issue at other times, but what indicator do you think is better?
I have heard of the GPI|Genuine Progress Indicator but interested if that is what you are thinking of or something else.

[Patricia Shannon]

Ronald Rutherford

There is at least one recent topic in this blog on the difference between the GDP and the GPI (which I'll refer to as GPI-A), with the GPI standing for Gross Personal Income, not the same as the GPI (GPI-B) you refer to, and how the GDP is misleading, while the GPI-A gives a more realistic picture of how most people are faring economically.

I find it interesting that you discuss some of the ways the GDP is misleading, making the economy look better than it is. You indicate in your blog that you are a conservative. Are you a Republican? Do you agree with the present day Republican party practices?

[Patricia Shannon]

Ronald Rutherford

Maybe I was thinking of Gross domestic income

http://economistsview.typepad.com/economistsview/2008/08/gdp-growth-revi.html

August 28, 2008
GDP Growth Revised Upward

You might also be interested in:

http://economistsview.typepad.com/economistsview/2007/06/levy_and_temin_.html

June 15, 2007
Levy and Temin: Inequality and Institutions in 20th Century America

http://economistsview.typepad.com/economistsview/2006/01/growth_is_good_.html

January 11, 2006
Growth is Good

[Benjamin]

A good place to start if curious about the inaccuracy of GDP accounts is a recent article in the Journal of Economic Perspectives by the people at the Bureau of Economic Analysis, showing how they compose the numbers, and the amount of approximation and guesswork required at times, this gives a good feel for the 'accuracy' of such estimates.

Don't get too caught up in their historical overview though, as there is much more to that story than is presented in the paper, some of which I have worked on in papers on my website, and conferences.

Landefeld, J. Steven, Eugene P. Seskin, and Barbara M. Fraumeni. 2008. "Taking the Pulse of the Economy: Measuring GDP. " Journal of Economic Perspectives, 22(2): 193–216.