GDP is unscientific and unfair for poor people.

Stephen E Philion philion at
Sat Aug 28 22:06:19 PDT 1999

On Sat, 28 Aug 1999, chang wrote:

> Economic theory should not be regarded as a theory of how to increase
> demand, investment, employment and GDP.

Why shouldn't it be? From whose class perspective shouldn't it be considered such, or do you mean in general, as we might wish the world to be?

It should be considered as a theory
> of how to raise the living standards of people, especially poor people, and
> also a theory of how to increase the world wealth and resource. Although war
> is generally thought to be able to decrease unemployment and increase GDP and
> economic growth rate, we should not say that wars are good for the economy.
> It is because wars destroy wealth and resource and lower the living standards
> of people.

Well, yes, in the world as it doesn't presently present itself to us, perhaps. But, actually, a good argument can be made that wars do benefit the economy, at least from a certain class perspective, or are we to assume commonality of interests vis 'the people'?

> Nowadays, most countries all over the world use Gross Domestic Product to
> judge the economic growth of a certain country and, according to this GDP,
> calculate this country's economic growth rate. This method of calculation is
> really unfair for poor people, for it fails to judge whether the poor
> people's living standards have been raised. For example, the yearly economic
> growth rate of some countries has reached 9-10 percent, but their poor
> people's living standards haven't been raised. There are still a lot of
> people suffering from cold and hunger. They can't afford to send their
> children to school, and, as a result, too many children are deprived of
> education. Therefore, a new economic theory is badly needed to judge a
> country's economic growth. My article "On The Development of Social Economy
> <>" has established a set of complete
> economic theories and also a new model of economic growth, by means of which
> we will be able to judge a country's economic growth accurately and fairly.
> And I also argue that we should use the living standards of the poor people
> and the sufficiency of the first and second grade consumption goods as the
> criterion to judge the economic situations of one country and the
> achievements of its government. Only when poverty is eliminated, may we say
> that the social economy is developed. Only when the living standards of the
> low-income people is improved, will we be able to take just and accurate
> measurement of the economic growth of a country. So, the economic growth of a
> certain country can't be measured by GDP. GDP is unscientific. The
> measurement of social economic development by means of GDP can only lead to
> the Military Keynesianism, lead to war.

Yet it *is* the indicator of choice, be it in the US or in China, as you are surely aware. The issue at hand is why is that so? Who has determined that it be that way and who, aside from wishing or declaring it should be that way is doing something about it?


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