i once had a manager whose favourite saying was - "if you don't measure it, you can't improve it". the man was an absolute git in almost every sense of the word, but he was right on the money in this instance.
countries in the free market paradigm measure their success obsessively. GDP, unemployment, balance of payments, inflation, plus a whole bunch of others of lesser importance, all feeding into the all important interest rate decision (which, being the price of money, can't be trusted to free and open markets, this is where a government babu apparently knows better than the market).
so GDP, total goods and services produced, that must be useful. well to a certain extent, it is. again, my usual caveat of having almost no knowledge or research, but this number is distorted by inflation (thus incentivising inflation - and you get what you incentivise), and also includes goods and services that may actually be detrimental to society, or at least be a symptom of a deteriorating society. more security goods and services would presumably reflect an increased perception of danger in society, yet would serve to increase the GDP. increased production of economic textbooks, directly resulting in increased suffering in students and indirectly to the suffering of society at large, increases GDP.
obviously some positives as well - increased production shows increased economic activity, or at least more money floating around the country, and/or increased efficiency. efficiency or productivity gains - can't argue with that. but increased money floating around doesn't necessarily correlate with increased economic activity, it may just mean prices have gone up as measured in the random measuring unit of money, and money isn't real.
this leads into inflation nicely - measuring the increase in general prices, derived from a representative basket of goods. so increase in inflation is an erosion of your purchasing power, and as it is specifically targeted (1% in the US i believe, 2% in UK, 2-3% in australia as examples), clearly the government wishes your purchasing power to erode. unless you consent to the erosion of your purchasing power, this should therefore qualify as theft by the government. or taxation, as it is commonly called.
why would government want prices to increase, rather than decrease (for example, via productivity and efficiency gains resulting in lower prices, allowing everyone to buy more)? well reduced purchasing power tomorrow incentivises the spending of that dollar today, and again - you get what you incentivise. they want people out there spending (feeding into the GDP, in the short term at least). if they targeted too high an inflation rate, we the marks would catch on that we are being conned and start rioting, and so they prefer the slow, patient theft of your purchasing power.
unemployment is clearly a bad thing - a precious resource of society, just lying around when they could be contributing to common goals and well-being. ignoring the ridiculous hoops governments everywhere jump through to obfuscate how bad unemployment really is - why can't these people get jobs? because the economic system decrees that businesses can only operate to make a profit. in reality, if there are available inputs, they could be used to produce products or services that are in demand, if we weren't obsessed with the need for profit. and society needs to be able to move and change as the world develops, so education and training should be available to anyone needing to obtain skills and knowledge that are in demand.
balance of payments - same as capitalist society in general, the profit will eventually accumulate to those people / countries that are best at playing the capitalist game. however history shows that accumulation of hoarded currencies is usually followed by (sometimes rapid) decline in the power of that country. spain, holland, england, US, japan, now china. they all went through periods where they were economically dominant resulting in massive accumulation of foreign reserves, and all (arguably, and again precious little research here) went through a subsequent humiliating loss of power, prestige, and those reserves.
i think we are measuring the wrong things - we are measuring largely monetary phenomena when money is actually illusory, and thereby not measuring what actually matters, which should surely be the health and wellbeing of society at large?
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