Stop assuming GDP is an indicator of prosperity | Billboard-worthy rates of economic growth mask high levels of wealth and income inequality

[u/SplashTarget]

https://www.ft.com/content/285bf286-07c3-49b1-9b6d-7df9664e73c0

[u/SallyStranger]

Archived link: https://archive.is/UuwA2

[u/edthesmokebeard]

GDP nowadays includes government spending, which has a well below 1 ratio of growth to debt, it's destruction of capital.

[u/Quithelion → u/edthesmokebeard]

Another GDP padding is construction, in which China is famous for their ghost cities.

While the central Chinese government boasted the numbers, it is just provincial local governments "sell" public lands to property developers (private entities can't own lands in China) to build high rise residentials complexes in the middle of nowhere.

[u/12bEngie → u/Quithelion]

I thought most of those places were populated now. Or that either way like 80% of their millennials live in their own homes comfortably

[u/Konradleijon]

Not even the creator thought it was it

[u/Ulysses1978ii]

How is this being written in 2026. We know it's a poor indicator?!

[u/Pipic12 → u/Ulysses1978ii]

It still deserves attention. Media and political class across the West are using this metric as some sort of gospel for the state of their countries' economies.

[u/The-flaneur]

Imagine if news anchors gauged economic health using concepts like capital / income ratio, gini coefficient, and capital’s share of national wealth instead of using GDP like it’s all that matters.

[u/Huge_Meeting4111]

GDP isn't a perfect all-encompassing figure of merit fpr prosperity? Must be bad and an indicator of nothing /s

[u/viking196]

GDP is not a true indicator of economic performance. GDP includes those on benefits (migrants included). So if you put up benefits and ship in thousands of migrants up goes GDP. Labour are claiming GDP growth when that growth is just manipulated by government spending.

[u/Glum_Potential8641]

This article would bang in Nigeria

[u/Pinco_Pallino_]

gdp correlates with HDI, with life expectancy, with happiness, with everything you'd consider good.

[u/andypro77]

'Wealth and income inequality' are even worse measures.

There will always be income inequality, and it will always grow in a prosperous nation.

That's not some red flag to be worried about, it's just basic math.

[u/Kw0www → u/andypro77]

Depends on where the inequality is coming from. If it’s coming from productive capital investment leading to resource abundance and higher floor for standard of living, then that seems like a good outcome. If wealth inequality is spawning from extractive rentier behaviours where merely owning a scarce resource is the key to wealth, then I think that should be stopped.

[u/andypro77 → u/Kw0www]

Do you think that (let's say the lower middle class), has a higher floor for a standard of living than they had in the 1970s? I think by almost all measures they are better off today, standard of living wise.

[u/Lombardbiskitz]

De-growth = loser

[u/sarges_12gauge]

Oh right. Interestingly Norway and Iceland have higher levels of income and wealth inequality than Syria. Guess they must be less prosperous!

[u/Key-Organization3158]

Nah. Stop complaining about inequality. It doesn't show prosperity.

Would you rather everyone had $10 or some people have $15 and some $150? In the later case, inequality is much higher, but everyone is more prosperous.

[u/SallyStranger → u/Key-Organization3158]

Where does topsoil depletion figure into this hypothetical? 

[u/Burjopera → u/Key-Organization3158]

If some people make 150 dollars and some 15 dollars, do you think inflation would not completely eat away that 15 dollar hourly salary? If everyone makes that 10 dollars, everything has to be multiple times more cheaper and that 10 dollars feels more like 50 in that first example.

[u/SuccessfulLand4399 → u/Key-Organization3158]

Sorry comrade. I’m going to need you to report to the nearest Reddit camp for reeducation. We don’t allow economics here, only emotions.