14 Comments

You don’t need one metric to measure countries, it’s ok to look at different things for different purposes, like crime versus income.

But one reason GDP is good is it doesn’t involve a bunch of social scientists sitting around and deciding what’s good for people. The beauty of money as a measure is that if people value something, they can buy it. There’s no reason to have a measure for education but not appliances or sports entertainment or the size of houses. This is just the value of left wing academics, who share this tendency that communists have to value health and education above all else. But people care about other things too when left to their own devices.

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Stating the obvious, but just in case any readers are confused, Luxembourg's position is due entirely to regulatory arbitrage, just as much as Ireland's. I don't think there is anything inherently wrong with that but it should be clear as well.

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I find it interesting that several East European countries rank as high as the US in some of these rankings.

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It would be interesting to see the correlation with genetic distance to, for example, the Dutch. I made this graph if you would like some more data: https://pga3d.s3.eu-central-1.amazonaws.com/index.html?P=1&pca=6&pcb=7&pcx=3&pcy=4&pcz=5&zoom=1&a=0.0461486&b=0.040469&x=0.1267527&y=0.1313048&z=0.0610935

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1) The smaller an entity the more of a problem measuring GDP becomes.

For instance Baltimore City has a very high GDP per capita despite having a very low per capita income. The reason is that the businesses and agencies are located in the city and so they count towards the cities GDP, even though the people doing the work to create that GDP all live elsewhere (some in the suburbs, some not even near the metro area). It's a similar issue to Ireland, and I would not be surprised if this is a common theme with cities and GDP calculations.

2) Age matters if your age curve is off from the normal. For instance, Florida always seems low income but it's also got a lot of retirees. These people are low income but high asset, and the fact that you can attract such people to live in Florida doesn't make Florida poor.

It's always weird to look at an income map of say beach communities and it says its "low income" even though an obvious look around shows that people have money. Probably they are measuring only the income of permanent residents who work in the hotels, not people with vacation homes.

3) A bigger problem with GDP is that it just measures what people spend money on. War famously raises GDP, at least in the short run. Similarly America's 18% of GDP on healthcare spending obviously adds a lot to GDP, but it's questionable if it represents better well being. Singapore spends 6% of GDP on healthcare and most would agree its equivalent or better quality.

Lots of Red Queen Races increase GDP without increasing well being.

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