It's the same requirement for being a regular talking head on any TV channel. Watching Anderson have to let Israeli PR by without any critical questions drove that home for me. Real economists are out there dropping giant data laden takes on the economy. Like some of the ones at Rand that calculated the amount of systemic wage theft since productivity diverged from wages.
Isn’t this really just suggesting that the “services” part of goods and services doesn’t have real value?
In this case, each person paid for the entertainment of watching their friends eat shit. They only did the exact same thing for the exact same amount of money to make it seem like one negated the other.
In this case, each person paid for the entertainment of watching their friends eat shit.
Not to overanalyze the joke even more, but:
Eating feces is not $100 worth of entertainment by any rational standard.
No rational person would spend $100 to watch his friend eat feces.
No rational person would accept $100 to eat feces.
No rational society allows someone to either eat feces or pay others to do so, for public health reasons if nothing else.
I mean, if you went to an unhoused person and offered him $100 to eat feces, you'd get arrested. And you'd deserve it. Because even the United States isn't quite that bad yet.
(And this is not a hypothetical. People do those kinds of things. There are unhoused people I know from Food Not Bombs who refuse food from strangers because too many of them have gotten adulterated food. And most of them have stories about people offering them money to do degrading things.)
So this $200 in GDP represents an activity that's injurious to public health, morally bankrupt, and leaves everyone participating in it worse off.
But from the Economics 101 worldview, the economists created $200 worth of entertainment, because both of them were willing to pay $100 to see each other eat shit and that means, by definition, eating shit was worth $100 in entertainment.
Which makes the punchline an even more vicious satire of capitalism and its bullshit metrics than it originally appeared.
If, instead of eating it, one economist picked up some shit and sold it to the other. Then, the other sold it back. This would suggest the "goods" part of goods and services also doesn't have value.
The joke doesn't work because both transactions were welfare enhancing. In the end, both of them agree that eating shit is worth it to see the other do it. At least $200 of value was created.
This falsely assumes that economic actors necessarily have sound judgment about value. Imagine someone who has had a bad day at work going and spending $10 for the privilege of being rude to a fast food clerk. If given the option would they directly trade the humiliations they themselves endured to earn that money to be able to inflict the same? Probably not, but their workday is already over, they don't see a way to translate the cash they have onhand into an overall better life, and this is what they feel like doing in the moment.
Increase in GDP is very often assumed to be a positive thing and represent an improvement in society, and as far as I can tell the point of the joke is that this is a false assumption.
I mean sure, in this contrived scenario. If a major source of GDP for some country was literally taking turns eating shit, that country would have some serious issues for sure. Fortunately, GDP isn't the only useful metric of economic output.
The joke doesn't work because both transactions were welfare enhancing. In the end, both of them agree that eating shit is worth it to see the other do it. At least $200 of value was created.
Yes. And after overanalyzing it I realized that's the second level of the joke.
The Economics 101 idea is that value is defined by how much money someone is willing to pay for something. And the satire of that idea is vicious. Because by every measurable standpoint those two economists are worse off coming out of the forest than going in - they've both had a exceptionally unpleasant experience and are now at risk for parasites and food poisoning and other health concerns. And yet they're patting each other on the back saying they created value for the economy.
And there are people on this thread - like you - seriously arguing that watching someone eat shit is worth $100 by definition because someone was willing to pay $100 for it, and therefore the two economists really did create $200 in value.
If that's what capitalism means by "welfare enhancing" it uses a different definition of welfare than any rational human being ever.
But that's why economists are the butt of the joke, I guess.
And if you agree with the characters in the joke, the joke is on you.
GDP just says how well a country is doing and is a good summarization for how imports and exports are doing. However, it also takes into account military spending and real estate, so you could argue the GDP can be inflated via those two measures (to a degree) to look better.
Consumer Price Index does a better job of showing how well the economy is doing for its citizenry.
CPI is not good either. Inflation can be fine for most citizens, when they have enough negotiating power to raise their wages with it. In that case it wipes out lenders. That happened in Weimar Germany after WW1, as the unions were strong enough to raise wages fast enough.
It doesn’t show how well a country is doing, because GDP is not a direct measure of aggregate utility. For example: GDP can go up, but if it causes the Gini coefficient to rise, a country could be doing much worse than before.
Economists of course know of these flaws and use GDP accordingly. Its for example a great measure how complex the economic flows are.
Of course its known, that countries can easily manipulate the data, for example China, who retrospectively changed their measuring of the economic data of 2022 and increased their GDP growth 2023 that way to 5.2 %. Or Russia, who spent an enormous sum for arms production, financed by debt, which of course led to a higher GDP at the cost of debt.
Nevertheless, if you consider these kind of 'tricks', its a good measure for growth year on year. But this growth can mean two things: higher living standards for its population or a more complex economy.
Its the same with the BMI. Its a good measure in general, but looking at a specific individual, its a highly deceptive measurement.
That's not what they mean. "More complex" means that you start paying for something that you used to do yourself, like paying a cleaner instead of cleaning your place. Or paying for takeout instead of making food. Now there are more transactions happening in the visible economy but you may not be better off.
More complex means that you focus on what you can do best and pay others to do what they can do best. Instead of growing your own wheat and pottery, you and others pay a third person to get a tractor and you can instead focus on doing pottery and sell them and buy wheat. This way more gets produced.
And while the wheat you grow yourself isnt part of the GDP, the wheat the third person grows for you, is. Therefore a more complex economy significantly boosts the GDP more than increased productivity. So if you produce your own wheat and your own pottery and your neighbor does the same, the GDP is 0. If you sell your pottery and your neighbor his wheat, both get added to the GDP.
GDP is just a statistic, economies of all types have it and that won't change unless people all together stop interacting with each other. It's flaw is that it's often the only measure of stength for a country's economy, but that's not a problem with capitalism. Nicola Sturgeon has a wholeass TED talk on this and why she had Scotland use other ways to measure their economic strength.
If anything, there's a lot more info that should be captured by GDP like home chores, growing your own food, maintenance you do yourself, etc. This is one of the benefits of UBI.
There's a lot of unexpressed demand due to people just being too poor to afford things. Imagine everyone gets a steady check, and this distributes income more equally. It can make society more efficient.
Imagine a food delivery person who can pick up and drop off food more efficiently than each customer picking up the food themselves. If customers have less money, they will just use their own cars to pickup the food. If they have a few extra bucks, they will just pay for delivery. Delivery is better for the environment and uses fewer people to do the same work. Overall, it's cheaper.
Grocery stores all used to deliver your groceries and had "credit" before credit cards were invented. It was more efficient to just send the delivery boy to your house and settle the bill at the end of the week/month.
and this is basically what a planned economy is, instead of letting the market stumble around and hoping to god the solutions people arrive at are good, we just sit down and think through how we want things to be done and then organize people to implement it.
Planned economies don't necessarily kill everyone one, but they are bad because they disguise the price signals even more. Meaning that, GDP is bad because it only includes certain things and excludes others ( household labor). Planned economies have no price signals, so you don't know if what you're doing works.
Planned economies only measure quantities of goods, not quality. So you will see statistics like tons of wheat or steel produced. What quality wheat? What quality steel? That's what prices tell you.
This is just asserting things as fact with no reasoning behind it, why would you need prices to determine if things are working? Do you use prices to determine if your food tastes good?
You're not going to read this, but I might as well explain it.
You are asking me to give a reason for the sky being blue, without looking outside. Just think about it for a minute. In general, higher quality things are more expensive. This isn't about "taste" but higher quality products that the average buyer would agree on:
A price signal is information conveyed to consumers and producers, via the prices offered or requested for, and the amount requested or offered of a product or service, which provides a signal to increase or decrease quantity supplied or quantity demanded.
What you think tastes good doesn't matter. Imagine there's a shortage of something (oranges for example) due to a poor crop harvest. The price of oranges will rise when the market learns this information. This helps compensate farmers who lost part of their crop and signals to the average consumer that they should buy fewer oranges.
In a normal competitive market, these prices decrease when supply increases to normal. The price signal tells the consumer they can buy more oranges again without them needing to consult a crop report.
It also tells the producers and the government what people think about purchasing that product. If they like it, they pay for it. These signals can be distorted by lack of competition or market access issues, but are better than asking everyone "does the food taste good?"
Yes, planning is a tool governments can use to influence the economy. Similarly, markets and monetary policies are tools as well. The trick is using the right tool for the right job, not creating religions out of hammers or chainsaws.
there's a lot more info that should be captured by GDP like home chores, growing your own food, maintenance you do yourself, etc. This is one of the benefits of UBI.
That's an excellent point. Another argument in my arsenal in favor of UBI! Thank you.
As for grocery on credit, it wasn't that long ago lol. There was a local grocer that did that in my town up until the 70s iirc. Of course they were run out of business by a chain who now have a local monopoly. Fuck you Safeway/Albertsons. Reminder to everyone that there's a possible merger with them and Kroger's that would make grocers in the US a big fucking joke.
That's the thing about capitalism. It always claims to be voluntary. You don't "have" to work at starvation wages. You don't "have" to take whatever work you're given. You don't "have" to endure abuse from your bosses.
And your bosses don't have to pay you, and your landlord doesn't have to rent to you, and the grocery store doesn't have to feed you, and the police don't have to protect you. So you either work "voluntarily" under whatever conditions "the market" sets, and earn enough money to afford food and housing and security, or you starve and die.
But the point of the joke is the bullshit metrics capitalism invents to pretend capitalist nations are prosperous, not all the other ways capitalism abuses people, society, and common sense.
But MY POINT is that GDP, as a stat, is useful in many contexts and isn't just a propaganda piece just because it's what capitalists focus on. It's also been much easier to gather accurately compared to other stats.
We live in the 21st century. We have no reason to solely rely on GDP for developed nations because we have the ability to accurately gather the data for many different metrics. This doesn't mean we throw the baby out with the bathwater and never touch GDP
The criticism of using transactions as a measurement is that at the end, neither has the $200 needed to buy a $200 Lego Millennium Falcon. If you can't buy $200 of goods, was anything really produced?
After the second economist watches the first economist eat bear shit. The second economist will now know that eating bear shit is worth more than $100 and wouldn't accept just $100 back they would ask for more than $100. That's capitalism
Or knows it's an easy way to make $100, so then secures a loan to cage a bear, and plans to hire a team to eat the shit instead for $75, all while pocketing the surplus $25 and skimming from the bear's feed - finally defaulting on the original loan.
That’s why sales people can make so much money in cases where they get commission. They aren’t exactly the most important part of the team, but when they close a deal the revenue they created is right there in black and white.
