Quote:
Originally posted by Cowperson@Sep 30 2004, 04:16 PM
You're worse off.
|
Why? How can you say 2 apples and 3 oranges is better than 3 oranges and 2 apples? Are you comparing interpersonal utility? Are you comparing average prices? In school they taught us that you cannot lump sum apples and oranges.
To calculate a total, you must add things. To add things together, they must have some unit in common. It is not possible to add refrigerators to cars and shirts to obtain the total of final goods. Because the total real output cannot be meaningfully defined, it cannot be quantified.
Suppose I made 2 transaction. In the first transaction, I buy a TV for $1000. In the second transaction, I buy one shirt $40. The price or the rate of exchange in the first transaction is $1000/1TV. The price in the second transaction is $40/1shirt. To calculate the average price, we must add these two ratios and divide them by 2. However, $1000/1TV cannot be added to $40/1shirt, implying that it is not possible to establish an average price.
GDP is an empty, meaningless concept. By definition then, growth doesn`t mean anything either. If your government builds a pyramid, Canadian GPD will skyrocket. How is that `good`?