It’s not propaganda though, it’s related to how the strength of a currency is determined.
The best example here is post-Soviet Russia, a country with almost no financial capital. During the USSR times, the industrial capacity of the Soviet Union was at least ~50-60% that of the US. In other words, the Soviet economy was at least half the size of the US in industrial terms.
The Soviet ruble was set at ~0.6 RUB/USD in the 1980s.
Immediately after the dissolution of the USSR, the West forced Russia to adopt GDP (Gross Domestic Product) to calculate the size of its economy. The USSR had used GNP (Gross National Product) for its calculation, which did not include financial assets such as the stock market, land and rent value etc.
When converted from GNP into GDP, the size of the Russian economy remained nearly the same (difference was only less than 2%, because post-Soviet Russia had no finance capital). However, when compared to the US GDP, the US economy was suddenly many times larger than the Russian economy. The value of the ruble plunged from 0.6 RUB/USD to ~120 RUB/USD by 1993 (200 times drop). This allowed Western capitalists to come in and scoop up post-Soviet Russian industries on the cheap. Mass poverty ensued.
When Russia defaulted in 1998 in the wake of the Asian Financial Crisis, the value of the ruble was 6000 RUB/USD (10000 times drop compared to the Soviet times), at which point the value had maxed out and the value of the ruble had to be reset. By then, the entire Russian industries had already been plundered.
This is the power of finance capital. You can say it’s fictitious value, but it has real consequences on the real world. This is how Western financial imperialism wreaks havoc on the Global South, and subject them to economic neo-colonialism even when the West has de-industrialized itself.
Europe plundered so much of the as yet non-financialized post-Soviet Russian assets that they garnered vast amount of finance capital capable of forming the European Union in 1993 and the euro currency zone in 1999, a currency aspired to directly compete with the US dollar. Always remember that European capital came from plundering Soviet industries, and post-Soviet states are a few of the worst victims of Western imperialism.
I don't feel like having a huge convo on this atm but thanks sincerely for your post which makes good points. I just don't want you casting your pearls before swines lol
One thing I will say is that the fact that finance capital was able to change the way the Russians calculated the size of their economies to include bullshit like stock markets before going on to raid them is exactly what I mean when I say it's a bullshit made-up propaganda measure. Maybe that's not it's sole intended purpose but it is definitely used for that purpose. A dollar spent on a factory in china is counted the same as a dollar made from creating NFT apes.
It's a fake measure with real consequences in other words. I also don't think western economists know their asses from their elbows, and spending 15 minutes in an econ 101 class illustrates why. Following that shit to it's conclusion basically leads you to ancapistan.
I agree with you it’s complete bullshit metric, but since the world has decided to adopt it as a measurement, it’s real as far as real world consequences are concerned.
It’s like debt (promise) - if a society has decided that a promise made has to be kept, then it’s real and needs to be fulfilled, even if it’s just someone’s words that are not tangible.
I presume that whoever owns the infrastructure will be able to report the losses and so reduce the GDP calculations. Damage to homes will probably also play a part in the calculations as their values are tracked by banks and the government. For smaller personal assets, I don't think the value would be tracked. Also, the 200B damages counting towards GDP could have been spent elsewhere, so the storm wouldn't really increase GDP. It would also reduce personal incomes of city dwellers.
As much as we like to shit on bourgeois economists, I think even they at least know better than to pull a broken window fallacy with GDP calculations, since that is something you are taught even in econ 101.
The real thing that (nominal) GDP measures is purchasing power of countries relative to other countries on the international markets at current prices (assuming frictionless trade). I do think it is a useful number to denote a few things, like, 1. is the country in a recession, 2. where does this country stand wrt imperialism, 3. how developed the country is.
infrastructure is considered a 'stock' you measure it at any point in time.
GDP is a 'flow', total value of final goods and services measured over a year. so if a country has a bridge worth $100b, that won't be included in GDP since it already exists, it won't be shown when its destroyed/depreciates either. it is only measured for the year its built, no other year.
so if a storm hits, people lose jobs, homes, reduce consumption, GDP falls. to counter some of the effects, the Government injects money through jobs programs, stimulus checks, ppp loans etc which prevents some of the fall.
GDP is a ‘flow’, total value of final goods and services measured over a year. so if a country has a bridge worth $100b, that won’t be included in GDP since it already exists, it won’t be shown when its destroyed/depreciates either. it is only measured for the year its built, no other year.
Yeah, I don't know why I said that the destruction of the bridge would be counted. For GDP metrics, the product/service is assumed to have been consumed entirely in the year it was sold.
GDP is bullshit anyway, if a storm hits a city causing 200B of damage the repairs get counted to GDP but the destruction does not.
It's just a totally phony propaganda number with mutable definitions
It’s not propaganda though, it’s related to how the strength of a currency is determined.
The best example here is post-Soviet Russia, a country with almost no financial capital. During the USSR times, the industrial capacity of the Soviet Union was at least ~50-60% that of the US. In other words, the Soviet economy was at least half the size of the US in industrial terms.
The Soviet ruble was set at ~0.6 RUB/USD in the 1980s.
Immediately after the dissolution of the USSR, the West forced Russia to adopt GDP (Gross Domestic Product) to calculate the size of its economy. The USSR had used GNP (Gross National Product) for its calculation, which did not include financial assets such as the stock market, land and rent value etc.
When converted from GNP into GDP, the size of the Russian economy remained nearly the same (difference was only less than 2%, because post-Soviet Russia had no finance capital). However, when compared to the US GDP, the US economy was suddenly many times larger than the Russian economy. The value of the ruble plunged from 0.6 RUB/USD to ~120 RUB/USD by 1993 (200 times drop). This allowed Western capitalists to come in and scoop up post-Soviet Russian industries on the cheap. Mass poverty ensued.
When Russia defaulted in 1998 in the wake of the Asian Financial Crisis, the value of the ruble was 6000 RUB/USD (10000 times drop compared to the Soviet times), at which point the value had maxed out and the value of the ruble had to be reset. By then, the entire Russian industries had already been plundered.
This is the power of finance capital. You can say it’s fictitious value, but it has real consequences on the real world. This is how Western financial imperialism wreaks havoc on the Global South, and subject them to economic neo-colonialism even when the West has de-industrialized itself.
Europe plundered so much of the as yet non-financialized post-Soviet Russian assets that they garnered vast amount of finance capital capable of forming the European Union in 1993 and the euro currency zone in 1999, a currency aspired to directly compete with the US dollar. Always remember that European capital came from plundering Soviet industries, and post-Soviet states are a few of the worst victims of Western imperialism.
what i love about this website is users with stupid funny usernames laying out brute knowledge unprompted, GOOD post.
Oh fuck it is a honk shoo joke that’s so good
xiao -> little, small
hong -> red
shu -> book
it's a mao reference
This is the correct answer
Banger. I’m so stupid
oh. i thought it was a reference to the instagram account with the five dollar bill AI voice lol
I don't feel like having a huge convo on this atm but thanks sincerely for your post which makes good points. I just don't want you casting your pearls before swines lol
One thing I will say is that the fact that finance capital was able to change the way the Russians calculated the size of their economies to include bullshit like stock markets before going on to raid them is exactly what I mean when I say it's a bullshit made-up propaganda measure. Maybe that's not it's sole intended purpose but it is definitely used for that purpose. A dollar spent on a factory in china is counted the same as a dollar made from creating NFT apes.
It's a fake measure with real consequences in other words. I also don't think western economists know their asses from their elbows, and spending 15 minutes in an econ 101 class illustrates why. Following that shit to it's conclusion basically leads you to ancapistan.
I agree with you it’s complete bullshit metric, but since the world has decided to adopt it as a measurement, it’s real as far as real world consequences are concerned.
It’s like debt (promise) - if a society has decided that a promise made has to be kept, then it’s real and needs to be fulfilled, even if it’s just someone’s words that are not tangible.
poor people getting a nutritious meal and shelter does nothing for GDP and therefore bad.
building a kill house to train heavily armed and militarized police murder squads against your own citizens is good for GDP and therefore good.
neoliberal economic theory: it's just that easy.
I presume that whoever owns the infrastructure will be able to report the losses and so reduce the GDP calculations. Damage to homes will probably also play a part in the calculations as their values are tracked by banks and the government. For smaller personal assets, I don't think the value would be tracked. Also, the 200B damages counting towards GDP could have been spent elsewhere, so the storm wouldn't really increase GDP. It would also reduce personal incomes of city dwellers.
As much as we like to shit on bourgeois economists, I think even they at least know better than to pull a broken window fallacy with GDP calculations, since that is something you are taught even in econ 101.
The real thing that (nominal) GDP measures is purchasing power of countries relative to other countries on the international markets at current prices (assuming frictionless trade). I do think it is a useful number to denote a few things, like, 1. is the country in a recession, 2. where does this country stand wrt imperialism, 3. how developed the country is.
infrastructure is considered a 'stock' you measure it at any point in time.
GDP is a 'flow', total value of final goods and services measured over a year. so if a country has a bridge worth $100b, that won't be included in GDP since it already exists, it won't be shown when its destroyed/depreciates either. it is only measured for the year its built, no other year.
so if a storm hits, people lose jobs, homes, reduce consumption, GDP falls. to counter some of the effects, the Government injects money through jobs programs, stimulus checks, ppp loans etc which prevents some of the fall.
Yeah, I don't know why I said that the destruction of the bridge would be counted. For GDP metrics, the product/service is assumed to have been consumed entirely in the year it was sold.