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Can someone who’s good with economics explain to me, as you would a child, is “global GDP” a useful measure of human productivity, or of anything at all for that matter?
My understanding GDP is a measure of productivity (via total value goods/services), but it’s measured in dollars, which are a self-referential measure of people’s willingness to work or pay for a service. All of these goods and services also have differing values to consumers based on their circumstances. If I’m trying to conceptualize a “fundamental unit of productivity” I feel like no matter how I do it I end up in a recursion loop. What am I missing?
Secondarily, I was recently in a fast food place and realized what I thought was a police officer taking a break was actually a full-time security guard employed by the restaurant. This guard is presumably paid some amount X per year, which is rolled into the national GDP. If we compare to another country where low crime rates mean they don’t need a security guard at every McDonald’s, it seems in this instance that GDP has captured a societal drag on productivity and is treating it as a gain. True, the guard is producing a service, but the fact that the service is needed at all when in other countries it is not seems like there should also be some factor captured as a negative that is being missed. Are similar warping effects (e.g., make-work projects or services that are created to compensate for a societal failure) a major contributor to variations in GDP values? And if so, how useful can GDP be really?
As a thought experiment, if nobody got sick, we could eliminate healthcare from GDP, which would be a huge paper loss (and lots of jobs) but doesn't seem to be a loss for what I'd consider "forward progress". I'm not really an RFK-stan or anything, but we presumably have a net GDP gain from incentivising unhealthy lifestyles and then paying for expensive mitigation treatments.
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