[commodoreboxer]

I keep hearing the phrase "generate wealth" in regards to advertisement and from the mouths of startup founders, but in almost no other context. I'm not familiar with the economic concept of "wealth generation" or its cousin "creating value".

Is the idea that any and all movement of money is virtuous? That all economic activity is good, and therefore anything that leads to more economic activity is also good? Or is it what it sounds like, and it just means "making some specific people very wealthy"? Wouldn't the more accurate wording be that it "concentrates wealth"? I don't see a huge difference in the economic output of advertisement from most other scams. A ponzi scheme also uses psychological tricks to move money from a large amount of people to a small amount of people. Something getting people to spend money isn't inherently a good thing.

[runlaszlorun]

> Is the idea that any and all movement of money is virtuous?

Maybe this was your point, but this is built in to one of the definitions of GDP, isn’t it? Money supply times velocity of money?

I’m no economist though I’m sure there are folks on here who are. But this seems like an unfortunate fact that’s built into our system- that as laypeople we tend to assume that ‘economic growth’ means an increase in the material aspects of our life. Which in itself is a debatable goal, but our GDP perspective means even this is questionable.

For example, take a family of five living out in a relatively rural area. In scenario one, both parents work good paying remote tech jobs and meals, childcare, maintenance of land and housing, etc. are all outsourced. This scenario contrubutes a lot according to our economic definitions of GDP. And provides many opportunities for government to tax and companies to earn a share of these money flows.

Then take scenario 2, you take the same family but they’re living off of the grid as much as possible, raising or growing nearly all their own food, parents are providing whatever education there is, etc. In this scenario, the measurable economic activity is close to zero- even if the material situation could be quite similar. Not to mention quality of life might be rated far higher by many.

What rating an economy by the flow of its money does do is, and I’m not sure if this is at all intentional, is it does paint a picture of what money flows are potentially capturable either by government taxation or by companies trying to grab some percentage as revenue. It’s a lot harder to get a share of money that isn’t there and/or not moving around.

Perhaps my take on economics is off base but, for me, seeing this made me realize just how far off our system is from what it could and should be.

[commodoreboxer]

GDP is a measure. I'm very much not an economist, but I am extremely skeptical that the health of an economy can be reduced to any single number. Goodheart's law and all.

I concede that GDP is a good indicator, but I think you can have things that help GDP while simultaneously hurting the economy. Otherwise any scam or con would be considered beneficial, and it would make sense to mandate minimum individual spending to ensure economic activity. A low GDP inherently shows poor economic health, but a high GDP does not guarantee good health.

In my mind (noting, again, that I'm no economist), economic health is defined by the effectiveness of allocating resources to things that are beneficial to the members of that economy. Any amount of GDP can be "waste", resources flowing to places where they do not benefit the public. As Robert Kennedy famously pointed out, GDP includes money spent on addictive and harmful drugs, polluting industries, and many other ventures that are actively harmful.[0]

[0]: https://youtube.com/watch?v=3FAmr1la6w0

[pixl97]

Going back to the previous posters monetary velocity statement, if you have a trillion dollar GDP, but it's just two AI's bouncing money back and forth high speed while all the humans starve in the street your economy is "great" and totally awful at the same time. The one number has to be referenced against others like wealth inequality.

[cooolbear]

"Generate wealth" means "make somebody's number go up" i.e. allocating real resources/capital somewhere, with the assumption that 1. allocating that capital creates a net boon for society and 2. those who have "generated wealth" are wise and competent investors/leaders and their investments will create a net boon elsewhere. The first point is probably not especially true very often in contemporary tech (other than 'job creation') and is arguably not true for advertisement. The second point is not really a given at all and seems to be pretty consistently shown otherwise.