GDP is falling

I haven’t paid a long-distance telephone charge in years. Who in 1958 – or, for that matter, in 1988 – would have guessed that domestic long-distance would one day not be a thing?

What used to be monetised consumption now no longer is. GDP is falling. Yet we’re better off.

Hal Varian was right, wasn’t he? GDP doesn’t deal well with free.

11 thoughts on “GDP is falling”

  1. GDP doesn’t deal well with government expenditure either.

    Isn’t GDP pretty preposterous for many of the jobs it’s asked to do? Who can possibly give a hoot about annualised quarterly change in GDP for example?

  2. Nobody ever discusses the error bands either, which is amazing when you consider that the 3 ways of computing it never come very close to matching. We obsess about small changes in a very imprecise number. Madness

  3. You know they will quote something say at 1990 prices,,, Perhaps they should work out another GDP including how many phone calls we make, and to whence, and add it in … at 1990s prices.

  4. When the U.S. was AT&T, and them only, AT&T used its extremely high long distance rates to subsidize their local offices.

    With the Modified Final Judgement (1982) breaking up AT&T’s communication business, long distance rates plummeted, and competition for the business exploded.

    But local service skyrocketed.

  5. Gamecock
    But local service skyrocketed….
    Up like a rocket, down like a stick. I doubt you can find a phone contract these days which doesn’t include unlimited local calls for free.

  6. I have a Minnesota area code, 507, which is also the country code for Panama. I share my 10-digit number with someone in Panama named Marisa, an ad rep for a medical supplies business, and so every few weeks I get to tell a caller that he has the right number, but he’s dialed the wrong continent by mistake.

  7. Another example, Open Source software. This is software libraries which are free to use by anyone, often even huge corporations. They are maintained by people for free and cost nothing to use (except the time required to understand how to use them). How do you estimate the value of these in GDP? They must add tens of billions of value.

  8. Bloke in North Dorset

    It wasn’t just distance you paid for, but also time of day. Making a call between 9am and 2pm was eye watering, then very expensive up to 6pm and finally the evening rate was just expensive.

    If you needed to make an urgent call at work in the morning it could men hunting down a senior manger who’s phone worked or could authorise the receptionist to let you make one.

  9. Pingback: Comment of the week | Tim Worstall

  10. @BiND,

    I’ve worked in organisations where we weren’t allowed to make calls of certain types at particular times of day.

    I once worked in a building where the telephone operator doubled as the receptionist. When you wanted an outside line, you asked for it. Then I moved to a different building, same organisation, where the telephone operators sat in a basement. When I asked for an outside line, I was greeted with “Oh, you just moved to this building, didn’t you?”

    To which I replied “Yes, how could you tell? Do you recognise everyone’s voices?”

    The answer was simpler. “No, it’s that you said ‘Please’ “

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