In economics, there are just to many variables to satisfy - and of course, the impossible variable which is the nuance and choices that humans make.
That doesn't make it unworthy, it just means we have to understand what we measure and why, and the limitations of it.
If you pay your mother to babysit, that goes into the GDP. If she does it for free, like most families - it doesn't go onto the GDP - yet the same amount of value was created.
The GDP also does not measure consumer surpluses, which is crazy.
It also doesn't account for the degradation of so many things. Clean water for example. A lake is polluted - unless someone is hit, economically speaking, it doesn't factor into the GDP. Well, we clearly 'value' clean water and streams on some level, maybe we should have a 'balance sheet' of 'natural assets' and put a number on them.
People tend to move around measurable things, and putting numbers on things changes hearts and minds.
Example: insurance companies are starting to change more for certain elements of climate risk. Maybe not quite 'climate change' in the grand sense, but certainly local climate issues. Then business have to respond because costs go up. I find a lot of business people are like that - once it's in numbers, measures, costs, it's easier to get on board.
If there's a real macro problem with economics, is that we need to measure something better than the GDP :)
Also, because of comparative value, it's hard to be objective with the GDP.
That doesn't make it unworthy, it just means we have to understand what we measure and why, and the limitations of it.
If you pay your mother to babysit, that goes into the GDP. If she does it for free, like most families - it doesn't go onto the GDP - yet the same amount of value was created.
The GDP also does not measure consumer surpluses, which is crazy.
It also doesn't account for the degradation of so many things. Clean water for example. A lake is polluted - unless someone is hit, economically speaking, it doesn't factor into the GDP. Well, we clearly 'value' clean water and streams on some level, maybe we should have a 'balance sheet' of 'natural assets' and put a number on them.
People tend to move around measurable things, and putting numbers on things changes hearts and minds.
Example: insurance companies are starting to change more for certain elements of climate risk. Maybe not quite 'climate change' in the grand sense, but certainly local climate issues. Then business have to respond because costs go up. I find a lot of business people are like that - once it's in numbers, measures, costs, it's easier to get on board.
If there's a real macro problem with economics, is that we need to measure something better than the GDP :)
Also, because of comparative value, it's hard to be objective with the GDP.