Looks cold outside. Blue sky, the sun is shining. So out with gloves? Or rather without? Maybe a look at the thermometer will help: three degrees. Hm. Is that already too warm for gloves? But what if there is an icy wind? Or is the thermometer perhaps too shady?
Just looking at the thermometer alone does not ultimately tell what the weather is like. Just looking at the gross domestic product, also known by its nickname GDP, does not show how the economy is doing. The GDP statistically records the economic performance of the Federal Republic. If things go up, prosperity increases – that’s why so many stare at the growth figures.
In left-wing circles, on the other hand, GDP sometimes has a completely different reputation: it stands for everything that is going badly in capitalism. The criticism is, for example: The GDP pretends that companies have to make more sales year after year so that people can do well – while economic growth harms people and the environment. Or: GDP fuels harmful consumption, a throwaway mentality and a stinginess is cool. In contrast, it does not measure inequality at all. In general, everything human, beautiful and good is subordinated to GDP, forced into conformity with the market, that’s what critics of GDP say too. The world is more than a few digits that are coldly and neoliberally labeled with euros and percent. In this logic, GDP is quackery, not science.
Some GDP critics may therefore have “finally” sighed when Vice Chancellor Robert Habeck (Greens) presented his ministry’s annual economic report. It was also about indicators “beyond GDP”. And there are the Ministry so some came up: the employment rate (around 80 percent, it is higher for men than for women), the proportion of women on the boards of large companies (less than 16 percent), the proportion of newly founded companies (eight percent before the pandemic), the CO₂ emissions (decreasing, but not enough).
This is important, socially relevant data. They’re a bit confusing, but that’s the reality. It’s good when the Ministry of Economy looks at additional figures. However, not for the reason given by the left-wing GDP critics.
When GDP increases, people tend to be able to live longer and healthier lives
Because their criticism of gross domestic product and economic growth often comes to nothing. GDP is not a neoliberal conspiracy to exploit people. It is the thermometer of economic life – no more and no less. It measures a central quantity that is important for decisions. If the displayed temperature doesn’t match what feels good outside, then don’t throw the thermometer directly at the wall, but look around again. In the world of statistics, this means that additional indicators are collected, as Habeck’s ministry has now announced.
But there is an interest behind it! Of course: Even with economic data, it is important who quotes which figures and why – and what basis these data have. That will be among scientists cheerfully discussed. And it also applies in everyday work: If you want to get something done in a meeting, you cite the statistics that fit your own agenda. It just doesn’t make a good stat any less powerful and a bad stat better.
GDP is not perfect. Like a thermometer, it can only measure one quantity. But that’s okay. Inequality must be measured differently, sustainability should be promoted – but not by ending GDP.
A growing gross domestic product is only a statistical approximation, but society is getting closer to things that are important to people: More economic growth tends to mean better medicine and thus a healthier, longer life. If the GDP rises, it creates and secures jobs and reduces fears of losing one’s job. These are things that left-wing BIP critics could actually like.