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Subject: GDP is unscientific and unfair for poor people.
by Ju-chang He
Bourgeois economists disguise economic reality and appear to do so
deliberately. They use the GDP, (Gross Domestic Product), to measure the
whole economic status of a country and this results in the government paying
no attention to the living standards of poor people. So poverty is perpetuated.
Nowadays, most countries use the GDP to judge their economic
growth and, according to this GDP, calculate their
economic growth rate. When there appears a large GDP and
a high economic growth rate, say 9% per
year, economists will say that the economy is great and the financial
officers will be proud, but still the economy is bad. It is bad because the
living standards of the poor haven't been raised. There are still a lot of
people suffering from cold and hunger. They can't afford to send their
children to school, and, as a result, too many children are deprived of
education.
If the economists say things are bad, the government has got to make an
effort to raise the living standards of poor people. If the economists say
that the economy is great, there seems no need for the government to raise
the living standards of poor people.
When there is a small GDP and a negative economic growth rate of,
say, -2% a year, the economists will say that the economy is bad and the
financial officers will be ashamed of it. Then the government has got to
make every effort to raise GDP, but the living standards of the poor are
unaffected. Therefore, it appears that GDP is for the rich to hoodwink the
poor people to keep them poor.
The GDP, as a measure of the whole economic situation for a country, is
unscientific, because it does not tell the whole story; and it is unfair for
poor people, because it excludes them from prosperity.
What Should We Do to Raise the Living Standards of the Poor?
First, I'd like to prove that the GDP, as a measure of a country's
total economy, is unscientific and unfair for poor. Then, I'll show that
instead of the GDP, we could use the living standards of the people to
measure the whole economic situation of a country.
In order to use the living standards of the people instead of GDP to
measure the whole economic situation of a country, I'd like to offer a
criterion of how to measure the living standards of the people:
People's living standard can be divided into four grades. The first
grade is necessary consumption of education, clothing, food, housing and
transportation. The second grade is ordinary consumption, which means buying
some more clothes and purchasing TV sets and washers, etc. The third grade
is extravagant consumption, which means going to hotels, restaurants and
dancing-halls and taking cars, etc. The fourth grade is over-extravagant
consumption.
Next, we can carry on state regulations and give guidance of market.
Go to the following site for an explanation:
<http://sites.netscape.net/juchang/marketaa.html#chart>.
In this way, the market will produce enough consumer goods of the first
and second grade. According to today's productivity, it is not difficult to
produce enough consumer goods of the first and second grade. The government
should make laws to fix a minimum wage level in accordance with the economic
situation of the country and make it clear that the wages of all the workers
oughtn't to be lower than this level. The government should distribute
relief fund among the unemployed and disabled. Thus, the living standards of
poor people will undoubtedly be raised.
If the government refuses to raise the living standards of the poor,
then their loyalties become clear. This visibility serves to motivate the
government to raise living standards of poor people as a matter of first
importance.
So, we should use the living standards of poor people and the
sufficiency of the first and second grade consumer goods as the
criterion to
judge the economic situation of a country and the achievements of its
government. Only when poverty is eliminated, may we say that the social
economy is developed. Only when the living standards of the low-income
people are improved, will we be able to take a just and accurate measurement
of the economic growth of a country. So, the economic growth of a certain
country can't be measured by GDP, which is really unscientific and unfair
for poor people.
Bourgeois economists may argue:
**GDP is scientific and fair. Because GDP was NOT designed to measure
distribution, it was designed to measure volume - so the criticism of
unfairness does not apply.
**GDP measure just the volume and production of goods sold, not the
living standards of poor people.
**GDP does not measure income distribution.
My reply:
The kernel of this issue is how economists use the GDP. Do they present
it as a measure of the overall performance of the economy, or as merely the
volume and production of goods sold. It is very clear that
economists use the GDP to represent the whole economic situation, not just
the volume and production of goods sold. This misrepresentation is the injustice.
When there is a large GDP and a high economic growth rate, they will say
that the economy is great and the financial officers will be proud of it,
although the living conditions of poor can be very bad and need improving.
The economists don't pay any attention to the living conditions of poor
people. So there is no need for the government to raise the living standards
of poor people. Therefore, we say that GDP, as a measure of the whole
economic situation, is unscientific and unfair for poor people, and the GDP
is merely a tool to keep the poor people poor.
Sincerely,
Ju-chang He
E-mail: [EMAIL PROTECTED]
SHENZHEN, P.R. CHINA
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