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Dr. Eli Cook, lecturer in American history at the University of Haifa, discusses his new book, “The Pricing of Progress: Economic Indicators and the Capitalization of American Life,” a critical history of the emergence and establishment of economic metrics as the gold standard (no pun intended) of progress.

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This season of the Tel Aviv Review is made possible by The Van Leer Jerusalem Institute, which promotes humanistic, democratic, and liberal values in the social discourse in Israel.


2 comments on “Persons of Dollar: How GDP Became King

  1. Greg Pollock says:

    I doubt that people were ever considered very important at a macro governmental level. As the discussion notes, the slavery/wage labor debate was fought primarily though output rhetoric. But, to neutralize moral abolitionists, slavers noted that wage labor left people isolated in the extremis of illness and aging, and cared nothing for the laborer’s family while, in ideal, slavery was cradle to grave, early or not (family separation ignored); in the first days of the Confederacy, some moralists sought to regulate the treatment of slaves, holding the critique of wage labor was fundamentally sound and to be avoided in improved slavery.

    There is in the podcast discussion a back projection of well being measures that never really mattered; at best, one argued trickle down–that improving macro measures would ultimately lift well being measures, even if not in present lifetimes. Such “improvement” could be naught but saving the government during external conflict; middle levels would benefit some below for the former’s own stability–and they did. General welfare becoming common increase in well being may be derivative of expanding nationalism.

    I suspect, not long after writing began, ledgers were made to measure macro resources for tax, tribute, and elite maintenance, with periodic levies for war. Often the measure was the act of levying. What would seem to matter is whether a purported measure is stable in that its increase implies if not further increase at least not slippage. The Soviets ultimately employed measures failing this requirement. In itself a well being measure such as leisure time or even health care may fail that criterion. On some such measures, Venezuela improved tremendously–but the measures did not feedback onto their own stability.

    I do not think, then, that isolate well being measures are able to provide for stable policy. They must be linked to other nonhuman measures, for we live in economies unlanded, all surviving on the promise to pay in goods which is currency. No one in politics, including Sanders here, wants to link these human and nonhuman measures in terms of tradeoffs. That trickle down has failed miserably in promise cannot remove productivity and taxation measures from policy (Venezuela tried to do that).

    My own view is that global warming will force us to confront trade offs in well being and advance starkly, moving at least the US to a well being much less defined through military intervention in the world. Presently, nationalism posits a false measure through “security”; Trump is following that path, really an older, equally false, form of trickle down. Sanders promises welfare and hints that world intervention must decline. But he avoids detailed views of what his policies might mean in macro resource availability, partly because he doesn’t know, partly because he may well suspect the answer would favor his opponents on the old greatness of America metric. Israel, I think, has yet to admit the true costs of occupation; absent US aid, that blindness would be harder to maintain.

    So I think an all out attack on nonhuman metrics (such as total capital or labor productivity) too broad. One must pick what human metrics favored and note their feedback onto the nonhuman ones, asking how such can be made stable. The rapid fire, excellent discussion of this podcast, I thought, could well have buttressed old time Progressives in the US. I think those often had only guesses as to what their policies would really bring. I would hope you are better off now in that; but, even so, are you allowed to say what that understanding is? The revival of old time nationalism says “we don’t want to, nor need to, know, or believe, what you say.” That’s how the world has worked for much of its life. Again, I say climate change demands up front difficult presentation beyond the feel good vote. Hurricane Maria is just the beginning.

  2. Itai says:

    The simple answer of why GDP is king is because its pretty much the best indicator available.
    Saying its just measuring by dollars is really underestimating it, since it encompases a lot of information by weighting everything by the prices of things and their quantities. (As a side note – ofcourse Marxist regimes won’t use this, because they lack the pricing information!)
    So, of course GDP has vulnerabilities, economists have been discussing these for decades, and in recent years there were serious attempts to develop alternatives to try and fix at least some of them, but at the end of the day so far they are either a lot more subjective in some way, or highly correlative with GDP so none had yet been close to replace it. So personally at this point I wish that Israeli politicians and voters would actually look at it more, not less (maybe the US is a different story, not sure).

    As a meta-note, I have to say I’m very surprised none of these arguments have come up in your discussion, and that you didn’t think of including an actual professional economist to throw in these arguments and others (for me this is just a small hobby reading about these things).
    Echo-chambers do not help humanity.

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