Thursday, July 16, 2009

Fundamental Mistakes

Never before have I seen so many basic errors in such a short amount of time when Douglas Rushkoff went on the Colbert Report to promote his book, Life, Inc. The errors are too numerous to address each one, but two stand out as particularly sloppy.

First he claims that pursuing supposedly noneconomic avenues, such as having friends or taking walks, are drains on the GNP. "[Corporations] crowd out every kind of activity." Instead, people are forced to "support the economy with consumption we don't want or need." Most firm would love it if that were true. If they could control people's lives, they wouldn't have to work so hard to stay competitive. But trade, as my students recently learned, is mutually beneficial. What world does Rushkoff live in where people are forced to buy things they don't want?

In an attempt to criticize measuring wealth through spending, he argued that "if everyone got cancer tonight, that's good for the economy" because people would spend more money. But no one actually familiar with how economists measure wealth would make such a juvenile confusion. GDP and GNP are proxies, convenient estimations because capturing everything is impractical or impossible. We are fully aware that there is more to wealth than what we can count and changes like the one Rushkoff sarcastically propose are nothing more than playing voodoo with the numbers.

1 comment:

Elisa said...

Very interesting article! Well done.