[cyberax]

> On this basis, global material prosperity has grown by 25% since 2004, which is nowhere near claimed “growth” of 96% in real GDP over that period. Moreover, the 25% rise in aggregate prosperity has been matched by the rise in population numbers over those twenty years.

This assumes that the GDP growth and the material prosperity are in a simple linear relation. I don't think this makes sense.

A small solar panel that can charge battery-powered night lights and a couple of cell phones produces negligible energy. Just a few minutes of air-conditioning consumption for a house in the US. Yet it can completely transform the life of households in an African town.

[notahacker]

Yeah. Feels like a "labour theory of value" but for energy, with the same drawbacks. Stock markets are imperfect measures of value but "it's the worst system of value allocation apart from all others that have been tried" applies here (and if you did want to come up with a "better" measure of value than stock prices, it would probably be a "hypothetical value created if the people making investment decisions made fewer mistakes and more broadly represented aggregate human wants" rather than assuming the impossibility of efficiency improvements and indexing value to commoditised energy and labour indices).

Another bold, unsupported claim in the OP is that renewables and nuclear cannot materially slow the effects of resource depletion. I mean, yes, there's not an infinite amount of land, rare earth metals and the sun won't last forever, but the resource depletion absolutely looks different from an internal combustion engine (and an efficient ICE or gas power station is the same outcome for lower material cost than an inefficient one, for that matter)

[johnnyanmac]

It doesn't make sense. But that is exactly how policy makers justify how "the economy is doing good!" The GDP was never intended to be used as an indicator of national economic well being; only a simple statistic to measure how much money is exchanged between people.

But it only takes a few examples counter to what a public service should do to show that GDP reliance creates anti-patterns. e.g. rising healthcare costs is good for the GDP while universal healthcare is bad.

[cyberax]

The GDP number is an example of "all models are wrong, some are useful". You'll inevitably oversimplify at least _something_ if you try to boil down the economy to a single number.

GDP is still useful. I don't think there are examples of countries that had drops in GDP without being in deep trouble. It exploits the fact that economies [almost] never change quickly, so when you're looking at just one country, the GDP is a reasonable indicator of the overall state.

Where the GDP sucks is when people try to compare the _rates_ of GDP growth between countries.

[johnnyanmac]

I agree. It's a tool and it has its uses. I simply think this current decade has had a lot if "everything is a nail" approach to it. With gdp being used to hide a massive slowdown and contraction on the labor market and the rest of the "real" economy.

I think the modern indicator is how GDP growth last year would have been almost entirely flat had it not been for the massive amounts of AI spending. Something that as of now (regardless of thoughts of long term job aspects) is only constrainting the material market.

I don't fault the author for that usage because I know they are basically using the same language such policy makers use, and using it to disprove a really odd (but common) usage of GDP as this way to measure long term prosperity.

[rmah]

First, you are correct. However, the reason GDP is used as a proxy metric for economic growth because it's convenient. Doing so does make a few assumptions though, foremost of which is that the structure of the economy will change very little from year to year. If that is so, than a rise in GDP should correspond to a rise in economic prosperity (and by extension wealth). Thus, using GDP change to measure changes in prosperity works (more or less) year by year. but the longer the periods you compare (5 years, 10 years, 20 years), the less meaningful the number becomes.

[disgruntledphd2]

Yup. A substantial proportion of the difference in GDP between the EU and the US relates to how health care values are assigned. In the EU (for public healthcare), it's at cost while in the US it's the final transaction price. It would be interesting to deflate US GDP against the same metric used in the EU to get more accurate figures, but I've never seen such an analysis.

[disgruntledphd2]

> This assumes that the GDP growth and the material prosperity are in a simple linear relation. I don't think this makes sense.

Yeah, I felt that this was the weakest point of the argument presented.

I do like calling out the absurdity of "wealth" in various assets though, as well as the notion that we need to map this "wealth" back ultimately to energy (which makes sense, as we need energy for basically everything).