…Oh my gosh, in so so SO many ways. Well, in a couple, at least. Like GDP, the Honda Accord is a pretty good all around vehicle. It is equally suited to city and highway driving, can traverse graveled country roads with relative ease, and can drive in most types of inclement wether. It can get us most places we wish to go and thus is pretty closely correlated to our happiness regardless of our personal tastes and hobbies.
“Oh, no,” say some, “real happiness is dive-bombing through thicketed forests and across small mountain streams.” And how do these bold people prepose we do so? We must buy new, larger tires for our Accord. Outfit it with better shocks and a more powerful engine. Add a roll cage and a winch to pull the vehicle out of ruts. These are the ways we can make our Honda Accord better and really ensure that it can lead us to the healthy, happy life we desire. I say you should just use a different car.
Now back to GDP. It is a popular pastime to point out the narrowness of the measure and suggest ways to improve it. We need to add the contribution of stay-at-home mothers, for instance. Or else we should complain that it doesn’t measure what we really care about like income inequality or literacy rates or any number of other possible national characteristics. But go back to the titular analogy of this post. Like the Honda Accord GDP does not do everything we may want in a car. But also like the Accord, it does most of what we want. GDP is correlated with a wide range of other statistics from happiness, to health, to life expectancy. We first need to recognize how wonderful GDP is as a simple measure of an enormous range of other national characteristics that we care about. Second, the answer to GDP is not to criticize its use as short sighted or to stuff it full of extra amenities as our woodsman wanted to do with our Accord. No economist believes that GDP provides the end-all, be-all state of societal success. Let the Accord be the Accord. Let it be simple, low-cost, versatile, and intuitive. Buy a new car if you want such vastly different features or improved luxury. Indeed, some economists (you’ve probably heard of) are designing new and different measures of national achievement. But this is no mark against the Accord. It does perfectly well what it was designed to do. The problem is that when a woodsman gets his hands on a Honda, there’s no end to where he’ll want to drive.