Post by comradeneres on Nov 18, 2016 17:09:50 GMT
Comrade Sokami Mashibe ☭: How familiar are you with the concept of GDP?
☭ Punikki ☭: can't say I've looked into it at all
Comrade Sokami Mashibe ☭: But do you often see it used as a means to measure a nations economy?
☭ Punikki ☭: Yes of course
☭ Punikki ☭: the higher the better
Comrade Sokami Mashibe ☭: Point is, i've developed a theory that shows that GDP is terrible at the most basic level, literally by the very system it uses to measure GDP of a nation
☭ Punikki ☭: interesting
Comrade Sokami Mashibe ☭: The goal of GDP is to measure the "productivity" of a nations, basically everything that is produced within the borders of any given economy. The way it does this is by using a very simple formula to add up all consumer consumption, government spending, reinvestment by businesses, and exports - imports.
Comrade Sokami Mashibe ☭: This system on the surface may seem like a pretty straight forward system, but in fact, it absolutely is not.
Comrade Sokami Mashibe ☭: Starting with something basic, if a for-profit company produced and sold 1,000,000 burgers for $5 each in a day, they would add $5 million to the daily GDP, and nearly 1.9 billion to the yearly GDP. Now lets say that we have a non-profit institution that produces 1,000,000 burgers of the same quality as the for-profit company. Lets say that they price these burgers at $2 each, since they don't have to charge nearly as much as a non-profit. The non-profit institution, despite selling 1 million burgers of identical quality as the for-profit company did, would only generate $2 million dollars to the GDP on a daily basis, and only $730 million to the GDP on a yearly basis. This leads us to the first major conclusion, that GDP is based entirely on adding up the arbitrary prices things were sold at, regardless of the business model, and this greatly skews GDP measurement in favor of for-profit corporations simply because they price things much higher. If the purpose of GDP is to measure productivity of a nation, then nations that sell certain services for much cheaper (like health care or education), would be shown to be much weaker. And economies geared towards non-profit institutions would look weaker simply because they sell stuff cheaper.
Comrade Sokami Mashibe ☭: This is just scratching the surface
Comrade Sokami Mashibe ☭: Does that give a pretty good run down for the basics of how GDP is calculated? Obviously there are certain factors i haven't even begun to discuss like exports and imports, but i'm saving that for my even bigger point to point out the extremely fatal flaw with GDP
☭ Punikki ☭: I think so yeah
Comrade Sokami Mashibe ☭: Okay, so to continue with my next major point
Comrade Sokami Mashibe ☭: We know that modern day economies are not isolated in bubbles. Global capitalism is a phenomena that has taken increasing for decades, usually with western corporations spreading into other nations to access cheap labor and cheap material cost. This translates to the other major factors influencing GDP: Exports, which increase GDP, and Import cost, which is substracted from the exports. This is where things begin to get hairy, because its where a major fallacy begins which is utterly devestating to GDP as a model to measure a nations productivity. GDP's main goal is to measure the economic productivity within a nations borders. When we examine the way capitalism operates on a global scale, corporations tap into very cheap labor into third world nations, often by contracting for control over entire industries in those nations. These workers work for western corporations, yet work for extremely low wages to produce all of these commodities for western corporations. Since these western corporations essentially ship all of these commodities back to their western branches, the import cost is extremely low - the shipping cost itself. They can then sell these products to western consumers at a highly marked up price, but a price that western consumers can pay since they have higher wages. This means that all of these products that third world workers produce feed western GDP directly, as if they were a literal part of the western economies themselves. This kind of activity makes up the overwhelming majority of american and european economies. This is hall marked by a factual statistic that america holds 39% of the worlds wealth, while producing a very tiny fraction of the worlds commodities, and the same story is in western europe, which accounts for an enormous proportion of the wealth, yet does not produce the level of commodities that would justify it. Instead, US and european manufacturing make sure to factor in all the factories they contract in other nations to consider it part of 'their' manufacturing, as if it
Comrade Sokami Mashibe ☭: was literally done in their regions
Comrade Sokami Mashibe ☭: So we have most of the productivity of goods and materialis in the world in third world nations, with very low wages and a very low GDP, yet we have the highest GDP in western nations with very low manufacturing productivity internally, which then pretends that any factories they control directly in other nations are part of their manufacturing.
Comrade Sokami Mashibe ☭: So GDP in fact cleverly disguises imperialistic plunder by western corporations, by disguising the fact that the size of the european and american GDP's are only so massive because of the extremely cheap labor they have access to, in order to produce almost every commodity for them, not because they actually produce most of their own things.
☭ Punikki ☭: well that's actually a perfectly accurate criticism of the GDP
Comrade Sokami Mashibe ☭: major conclusion: GDP absolutely does not measure the real productivity of a nation. all it measures is capital flow in a nation, with complete disregard of the nature of where and how things were produced in the world, and completely ignores the fact that most of the commodity productivity in fact is in third world nations.
Comrade Sokami Mashibe ☭: GDP, since all it is useful for is measuring capital flow in a nation (rather than productivity), if applied to western nations with many multi-national corporations, can be used to approximate just how much the west exploits the productivity of other nations, to bolster its own economy.
☭ Punikki ☭: yep completely true
Note: U.S manufacturing represents 9% of global exports, Yet imports far more manufactured goods from poorer nations than it exports. The US alone represents 36% of the global wealth divide while only having 4% of the global population. US manufacturing is extremely dependent on the imports of extremely cheap minerals that come from poor nations. Also, the Service sector of the US economy, which represents the over-whelming portion of the economy, is extremely dependent on the extremely cheap manufacturing imports that come from third world countries, and a US industry that inherently relies on extremely cheap mineral imports to keep production cost low.
Sources (incomplete):
www.investopedia.com/articles/investing/051415/how-calculate-gdp-country.asp
www.themanufacturinginstitute.org/~/media/2769E16B279F4E6FBC65B228C69658D6.ashx
en.wikipedia.org/wiki/Lists_of_countries_by_mineral_production
☭ Punikki ☭: can't say I've looked into it at all
Comrade Sokami Mashibe ☭: But do you often see it used as a means to measure a nations economy?
☭ Punikki ☭: Yes of course
☭ Punikki ☭: the higher the better
Comrade Sokami Mashibe ☭: Point is, i've developed a theory that shows that GDP is terrible at the most basic level, literally by the very system it uses to measure GDP of a nation
☭ Punikki ☭: interesting
Comrade Sokami Mashibe ☭: The goal of GDP is to measure the "productivity" of a nations, basically everything that is produced within the borders of any given economy. The way it does this is by using a very simple formula to add up all consumer consumption, government spending, reinvestment by businesses, and exports - imports.
Comrade Sokami Mashibe ☭: This system on the surface may seem like a pretty straight forward system, but in fact, it absolutely is not.
Comrade Sokami Mashibe ☭: Starting with something basic, if a for-profit company produced and sold 1,000,000 burgers for $5 each in a day, they would add $5 million to the daily GDP, and nearly 1.9 billion to the yearly GDP. Now lets say that we have a non-profit institution that produces 1,000,000 burgers of the same quality as the for-profit company. Lets say that they price these burgers at $2 each, since they don't have to charge nearly as much as a non-profit. The non-profit institution, despite selling 1 million burgers of identical quality as the for-profit company did, would only generate $2 million dollars to the GDP on a daily basis, and only $730 million to the GDP on a yearly basis. This leads us to the first major conclusion, that GDP is based entirely on adding up the arbitrary prices things were sold at, regardless of the business model, and this greatly skews GDP measurement in favor of for-profit corporations simply because they price things much higher. If the purpose of GDP is to measure productivity of a nation, then nations that sell certain services for much cheaper (like health care or education), would be shown to be much weaker. And economies geared towards non-profit institutions would look weaker simply because they sell stuff cheaper.
Comrade Sokami Mashibe ☭: This is just scratching the surface
Comrade Sokami Mashibe ☭: Does that give a pretty good run down for the basics of how GDP is calculated? Obviously there are certain factors i haven't even begun to discuss like exports and imports, but i'm saving that for my even bigger point to point out the extremely fatal flaw with GDP
☭ Punikki ☭: I think so yeah
Comrade Sokami Mashibe ☭: Okay, so to continue with my next major point
Comrade Sokami Mashibe ☭: We know that modern day economies are not isolated in bubbles. Global capitalism is a phenomena that has taken increasing for decades, usually with western corporations spreading into other nations to access cheap labor and cheap material cost. This translates to the other major factors influencing GDP: Exports, which increase GDP, and Import cost, which is substracted from the exports. This is where things begin to get hairy, because its where a major fallacy begins which is utterly devestating to GDP as a model to measure a nations productivity. GDP's main goal is to measure the economic productivity within a nations borders. When we examine the way capitalism operates on a global scale, corporations tap into very cheap labor into third world nations, often by contracting for control over entire industries in those nations. These workers work for western corporations, yet work for extremely low wages to produce all of these commodities for western corporations. Since these western corporations essentially ship all of these commodities back to their western branches, the import cost is extremely low - the shipping cost itself. They can then sell these products to western consumers at a highly marked up price, but a price that western consumers can pay since they have higher wages. This means that all of these products that third world workers produce feed western GDP directly, as if they were a literal part of the western economies themselves. This kind of activity makes up the overwhelming majority of american and european economies. This is hall marked by a factual statistic that america holds 39% of the worlds wealth, while producing a very tiny fraction of the worlds commodities, and the same story is in western europe, which accounts for an enormous proportion of the wealth, yet does not produce the level of commodities that would justify it. Instead, US and european manufacturing make sure to factor in all the factories they contract in other nations to consider it part of 'their' manufacturing, as if it
Comrade Sokami Mashibe ☭: was literally done in their regions
Comrade Sokami Mashibe ☭: So we have most of the productivity of goods and materialis in the world in third world nations, with very low wages and a very low GDP, yet we have the highest GDP in western nations with very low manufacturing productivity internally, which then pretends that any factories they control directly in other nations are part of their manufacturing.
Comrade Sokami Mashibe ☭: So GDP in fact cleverly disguises imperialistic plunder by western corporations, by disguising the fact that the size of the european and american GDP's are only so massive because of the extremely cheap labor they have access to, in order to produce almost every commodity for them, not because they actually produce most of their own things.
☭ Punikki ☭: well that's actually a perfectly accurate criticism of the GDP
Comrade Sokami Mashibe ☭: major conclusion: GDP absolutely does not measure the real productivity of a nation. all it measures is capital flow in a nation, with complete disregard of the nature of where and how things were produced in the world, and completely ignores the fact that most of the commodity productivity in fact is in third world nations.
Comrade Sokami Mashibe ☭: GDP, since all it is useful for is measuring capital flow in a nation (rather than productivity), if applied to western nations with many multi-national corporations, can be used to approximate just how much the west exploits the productivity of other nations, to bolster its own economy.
☭ Punikki ☭: yep completely true
Note: U.S manufacturing represents 9% of global exports, Yet imports far more manufactured goods from poorer nations than it exports. The US alone represents 36% of the global wealth divide while only having 4% of the global population. US manufacturing is extremely dependent on the imports of extremely cheap minerals that come from poor nations. Also, the Service sector of the US economy, which represents the over-whelming portion of the economy, is extremely dependent on the extremely cheap manufacturing imports that come from third world countries, and a US industry that inherently relies on extremely cheap mineral imports to keep production cost low.
Sources (incomplete):
www.investopedia.com/articles/investing/051415/how-calculate-gdp-country.asp
www.themanufacturinginstitute.org/~/media/2769E16B279F4E6FBC65B228C69658D6.ashx
en.wikipedia.org/wiki/Lists_of_countries_by_mineral_production