GDP Iceberg

Nations measure success in Gross Domestic Product (GDP). This model for determining success presents myriad problems. For example, when a home is burglarized, the purchase of replacement goods, insurance rate increases, and clean-up services will all make favorable contributions to GDP. GDP manipulates the categorically undesirable occurrence of home invasion into advantageous economic activity.

In addition to how GDP misrepresents adverse events by measuring them based on their generation of monetary value, GDP fails to capture a large number of vital human activities. Raising and caring for children is only counted by GDP when payment for services—such as daycare—are involved. Caring for the elderly also only generates economic activity in certain circumstances. Yet, both caring for children and caring for older adults are fundamental parts of the human experience. Not only that, but capitalism requires a labor force, and those laborers require care before, during, and after their working years. Despite this requirement, GDP does not account for such activities as a parent raising their child, roommates who take turns cooking for one another, and children who care for elderly parents. Care activities such as these are essential—and are disregarded. In the iceberg diagram, you’ll find even more examples of what GDP does not measure.