The Danger of Thinking in GDP

(Not Quite Top Shelf)

The statistic Gross Domestic Product encourages us to think in a governmental, especially liberal way.  It paints a picture that there is this huge pile of money, albeit in many different forms, that resides in a country and somehow belongs to it.  The GDP of Finland or Tanzania we just think of as belonging to Finland or Tanzania as a whole.  However they divvy it up, there’s this number, the boundaries of the country contain it, and heck, it’s not ours, it’s not China’s, so it must be theirs.

It’s because we don’t know Finns or Tanzanians as individuals.  It’s a convenient storage for a big idea, but it misleads, because that value is not owned by Finland, but by individual Finnish people.  We do it with The GDP of the US quite a bit.  But we only do it at a national level, when we want to compare how much “we” spend on eyeliner rather than restrooms for the transgendered.  No one talks about the GDP of Goffstown, or NH, because when it gets down to that level it dawns on us.  That’s not the town’s money, that Charlie’s money.  GDP is a fiction.  It’s a statistical construct that helps us to understand certain movements of goods and services, but it’s not really a thing, an object.

It seems like such an exaggeration to government types, and to liberals when conservatives grouse that “they think it’s their money and they want to take it from you to do what they want with it..”  Nonono.  We know it’s your money.  But you made it in a certain interdependent context. It’s only fair that people pay for the privilege of being in that context.  We all live here.  We’re all in this together. 

Wait.  Are you charging me rent for using the system or asking me to share?  I might be glad to do either, but it sounds like the ideas are combined here.

You should want to share. So it’s the same thing.

No, actually, that’s where it starts to get scary.  Because “sharing with society” has come to have “giving it to the government” as its synonym.

Well sure, that’s just more efficient.  Societies designate people to do this work for them.  And we have to do it that way, because it didn’t work when we left it to individuals, so the government has to do it. 

It doesn’t work this way either.

But it works better.  And we can keep trying and do better and better still.

Actually, we don’t know that.  We know that private charity was inadequate, but we don’t know that this way is any better.  

Oh come n -

No really, we don’t.  We’ve spent a lot of money, and it’s done some good things, but we also have measurably worse family arrangements.  We may have worse individual character as well, though we can’t measure that either.  

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Justice Learned Hand in 1934 when he was on the 2^nd Circuit

Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.

The courts ruled “over and over again” because over and over again, government reaches, believing that the money actually belongs to “society” and thus to it.  It treats tax avoidance as equivalent to tax evasion, as if money is being stolen from The People.  Liberals are absolutely on board with this idea, believing that there is indeed something sinister, something unpatriotic, about sending your money away from the tax bite, to Switzerland or the Caymans.  They simply don’t get that theirs is the unamerican idea.  The People is not Society is not The Government.  These are not interchangeable concepts, however blurry the lines between them are.  Red is not blue is not yellow just because green and orange exist.

More on this tomorrow...