Re: the value of $1000

[Basil Moore <bmoore@xxxxxxxxxxxxxxxxx>]

John
        GDP does not measure the satisfaction received by sellers of factor
services. Payments are supposed to be made in return for disutility. But
what if I love my work, or enjoy ownership of my wealth? In GDP accounting,
only consumption generates utility, if GDP is taken as an index of economic
welfare.
Basil Moore




At 03:27 PM 3/4/96 -0500, you wrote:
>Scitovsky is right. Roughly, GDP measures the volume of net
>gain transactions, not the volume of net gain from transactions.
>--Alan G. Isaac
>
>On Sun, 03 Mar 1996 20:21:52 GMT <lintotja@xxxxxxxxxxxxx> said:
>>
>>I'm new to this list, and thus not aware what the range of
>>interests of list members is. But I wonder if anyone would care
>>to respond to this question.
>>
>>Tibor Scitovsky, in "The joyless economy", argues that the
>>inclusion of $1000 in the national accounts implies that (1)
>>someone did work, the discomfort of which was worth less than
>>$1000 to him or her, and (2) services were rendered worth more
>>than $1000 to someone else. Thus the sum of worker's and
>>consumer's net gains could be much less or much more than the
>>$1000 included in the accounts.
>>
>>Is there a flaw in Scitovsky's logic, or some counter-argument?
>>
>>I ask because on the face of it, this is one of the simplest and
>>most devastating reasons (among many others) for not regarding
>>GNP as a measure of welfare, or GNP growth as a legitimate target
>>of policy. (It would also fatally undermine attempts to construct
>>measures of welfare based on "improving" GNP, a la Nordhaus and
>>Tobin, Daly and Cobb, etc.) Yet it never seems to be mentioned by
>>environmentalists and other critics of growth.
>>
>>John Lintott
>


Basil Moore, Department of Economics
Wesleyan University
685-2363