GDP and American (Non-)Exceptionalism: Again Some More

Any knowledgeable economist will tell you that GDP (or GDP/capita) is a profoundly imperfect and non-inclusive measure of national well-being.
In particular, GDP doesn’t count any work isn’t paid for with money — painting your mom’s house, volunteering for the Rotary Club or your church (David Brooks, are you listening?), caring for your kids and your friends’ kids, cooking dinner for your family — even though that work clearly “produces” immense quantities of real human value. (Can you say “family values”?)
A while back I did a rough calc (based on Census time-use surveys and median hourly wage) suggesting that counting unpaid work would increase U.S. GDP by something like a third (and I think that’s an underestimate.) Since Europeans have much more free time for unpaid work, counting it would presumably increase their GDP by an even greater percentage.
If this thinking holds water, you’d expect to see other measures of well-being giving very different readings from the GDP/capita measure.
You would be right. Kentaro Toyama laid out out ten other measures in The Atlantic last month, all of which show the U.S. trailing European countries — often by quite dismaying amounts:

(ODA is official development assistance.)
The U.S. only stands out by one measure (and it’s still not #1) — GDP/capita — and that only if you calculate it by purchasing power parity. (How large a basket of goods would your share of GDP buy in different countries?)
Conservatives constantly point to the U.S.’s high GDP/capita to “prove” that their preferred model of unfettered capitalism and stripped-down government is superior in delivering national well-being.Even if they ignore all those other measures (which conservatives are happy to do, as with any facts that contradict their faith-based beliefs), their claims for GDP superiority themselves contradict their own beliefs.
Think about it: PPP adjustment — the procedure that’s necessary for conservatives to claim American exceptionalism by the one measure that they cling to — by its very nature asserts that currency exchange rates are wrong – that they’re not being properly arbitraged by the market to represent the “true” value of the different currencies in terms of real goods.
So yeah: America kicks everybody else’s ass (except Norway’s) — as long as you assume that markets are imperfect.
Cross-posted at Asymptosis.

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