The deeper point here isn’t in fact about GDP, nor women working. It’s that near all of the economic numbers we use are not, in fact, the measurement we’d really like to be making. They’re nearly always proxies — something that is close to what we’d like to measure but not actually the thing itself. This means that we shouldn’t be using our economic numbers as targets in quite the way we often do.
More women going out to work for wages would raise GDP. So what? GDP isn’t the thing we want to maximize. More people being able to do more of what those people want to do is — we want to maximize human utility. We have no measure for human utility, we use GDP instead. But GDP is that proxy and so we fall into error if we try to maximize the proxy — GDP, instead of the actual target — human utility.
Which leaves us with the actual answer here to female labour force participation. We must have a system whereby if women wish to work for wages, they may. Equally, if they prefer to run their household, then so be it. This applies to men too, of course. Maximizing the choices that can be made maximizes utility, not maximizing GDP.
Isn’t it GDP per capita should be the target (if there is going to be a target), rather than national? You can raise national GDP by importing loads of third world unskilled labour & doing lots of low value stuff.
Wonder which country has been following that policy recently?
And doesn’t that more align with what you’re suggesting? You actually want women who add a lot of value participating in the workforce. Where they’re not adding much money value, their utility value might be higher in the home.
We must maximise GDP! How else do we get to raise more and more lubbly jubbly taxes?
I think that the concept of utility should be pushed more in economic arguements. Economists do nobody any favours by ignoring this unmeasureable and leave themselves open to the arguement that they are only interested in money.
BIS as per my understanding, not quite, utility is personal. Someone who could earn vast amounts in paid employment may still get even more utility from staying at home, and them doing so will maximise utility even at the expense of lower gdp per capita.
On a slightly different but related note, I’m long of the opinion that psychology and economics at the micro level have a huge overlap due to the utility factor. Is anyone aware of any work done covering this?
@BiS(cot)
I believe that people should make their own decisions. The only planning a government should do is to enable them to do so (& suffer the consequences). So therefore it’s up to the individual. Is their maximum utility at home or the money from working?
GDP numbers define what’s good for government. WGAF?
We must maximize GDP because that’s how you justify ever increasing government spending!
Merry Christmas all. Spending Christmas with family in Mexicali, up early waiting for everyone else to wake up so we can eat breakfast.
Current news stories in Canada are housing crisis, healthcare crisis, education crisis and government targeting half a million immigrants a year for the foreseeable future
Real joined up thinking there
And on Margarine Revolution today, does Shkreli describe an actual Iterated Prisoner’s Dilemma where snitches like SBF’s buddies get theirs in whatever prison they end up in?
Current news stories in the UK are housing crisis, healthcare crisis, education crisis and government welcoming half a million immigrants a year for the foreseeable future
Real joined up thinking here too…
Current news stories in the US are education crisis, healthcare crisis, housing crisis and energy crisis. Importing 5 million illegal immigrants. Real joined up thinking here too.
Governor Abbott has delivered another busload of illegal immigrants on border czar Kamala Harris’ doorstep as a Christmas present.
My favourite example of GDP being a bad measure is that if you marry your housekeeper it reduces GDP.
Will the caring and compassionate folk of Martha’s Vineyard again be opening their homes, hearths, and daughters’ bedroom doors to another round of victims of white colonialist oppression and institutionalised trans hate?
Or is there no room at the Inn?
thus exposing the fallacy of macro-economics!
My favourite example of GDP being a bad measure is that if you marry your housekeeper it reduces GDP.
My favourite is if I hire two people, one to dig a hole and the other to fill it back in with the same soil, GDP has gone up, but we’re back exactly where we started but somehow output has increased?!?
And my favourite is what the State does goes in the GDP figures as what it cost to do.
@AndyF & @Chernyy Drakon
That’s because GDP measures cost and not output. As such, it is a pretty useless measure.
If anyone is in doubt about what it measures, consider this example. You enter a cafe and decide to have a sandwich for $5. GDP increases by $5. Suppose the cafe instead had both sandwiches and cakes and you greatly preferred cakes. Then you might buy a slice of cake for $5. GDP has still gone up by $5, but the value consumed is clearly greater because you value the cake more.
Be careful what you wish for. Government spin doctors read here and now are working on a ready-to-deploy argument that falling GDP is actually an indicator of increasing human utility.
@Chernyy Drakon
My favourite is if I hire two people, one to dig a hole and the other to fill it back in with the same soil, GDP has gone up, but we’re back exactly where we started but somehow output has increased?!?
That really depends on whose body is at the bottom of the hole, doesn’t it?
I used to arrive home from work circa 19.00 of an evening, a similar time to Mrs G. We’d sit down at kitchen table, open bottle of gin and decant to two glasses. Eat meal from local takeaway, before collapsing face down on bed, exhausted. Wake at 06.00 and depart for work. Rinse and repeat. Must be more to life we decide… So flip coin. Mrs G. catches coin in mid-flight and says “Heads, I win”. Retires at age 36. Best thing we ever did, although at the time – given the lady’s salary and our sizeable mortgage – it was very much a roll of the dice. I have no idea what effect it had on the nation’s GDP but, for what it’s worth, in terms of maximising family utility, it worked a treat.
That’s because GDP measures cost and not output. As such, it is a pretty useless measure.
Wikipedia states GDP as
Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries.
Seems like it measures the market value of things sold, not cost price or cost of production.
I’m not a fancy financial economist type. But it doesn’t seem like a cost measurement?
Rather interestingly, if all married women with children not yet adults were banned from the workplace, roads might be less congested – and there would be lots of high-paying jobs for men in the NHS!
@Chernyy Drakon
What you pay when you buy something is its cost, not its value. Normally the value is higher. Occasionally, it’s lower if you misjudge things, you buy a defective item which you cannot return, or circumstances change before you can use it. There is no way to measure the value (and, indeed, it’s not clear that the item even has a specific value rather than the general property of being worth more than you paid for it).
If you buy something for re-sale, it would be possible in principle to estimate its value to you, but GDP does not include goods bought for resale, so that does not help.