What We Measure Is What We’ll Get

Many people share the belief that there is a solid, objective reality “out there” somewhere – outside our heads, presumably – and that we can perceive this reality by assuming a detached, objective approach to understanding things. It’s also assumed that numbers, being abstract and seemingly objective themselves, are a key ingredient in achieving an objective knowledge about, well, things.

And so we hear every day a litany of numbers – the Dow Jones indices, unemployment rates, durable goods orders, interest rates, the GDP, etc. – from which we are supposed to conclude (objectively, of course) how we are doing economically. Being Americans, it’s taken as a given that if we’re doing well economically, then we’re doing well in general and all is right with the world.

The only problem is that our faith in the value of objectivity is just that – an article of faith. We don’t have any way of proving that our presumed objectivity, and objective reality, are the be all and end all of things.

As it turns out, quantum physics has discovered that reality can be understood in a number of ways, but it is not just some giant slab of objective Truth. As is demonstrated by the famous double slit experiment, what we measure for will have a major influence on what we get.

I was reminded of this fact by a piece in the New York Times titled G.D.P. R.I.P. The author, Eric Zencey, argues that using the Gross Domestic Product as a way to measure our economic well-being is flawed because it is incomplete. Only certain things are measured by the GDP:

A mundane example: If you let the sun dry your clothes, the service is free and doesn’t show up in our domestic product; if you throw your laundry in the dryer, you burn fossil fuel, increase your carbon footprint, make the economy more unsustainable — and give G.D.P. a bit of a bump.

The incompleteness of the GDP winds up shaping our priorities:

In general, the replacement of natural-capital services (like sun-drying clothes, or the propagation of fish, or flood control and water purification) with built-capital services (like those from a clothes dryer, or an industrial fish farm, or from levees, dams and treatment plants) is a bad trade — built capital is costly, doesn’t maintain itself, and in many cases provides an inferior, less-certain service. But in gross domestic product, every instance of replacement of a natural-capital service with a built-capital service shows up as a good thing, an increase in national economic activity. Is it any wonder that we now face a global crisis in the form of a pressing scarcity of natural-capital services of all kinds?

Zencey goes on to explain:

The basic problem is that gross domestic product measures activity, not benefit. If you kept your checkbook the way G.D.P. measures the national accounts, you’d record all the money deposited into your account, make entries for every check you write, and then add all the numbers together. The resulting bottom line might tell you something useful about the total cash flow of your household, but it’s not going to tell you whether you’re better off this month than last or, indeed, whether you’re solvent or going broke.

As I said before, we have a great faith in the power of numbers to give us a perceived objective reality. But this faith is misplaced if we don’t cover all aspects of a system. An in-depth study of what happens when we shoot photons through a single slit will show us one objective reality; a similar study of what happens when we shoot photons through a double slit will show us another. Only when we cover all the bases and account for reality’s multiple facets will we approach a deeper understanding of the way things are.

As Zencey notes, having an economic measuring system that only accounts for one aspect of the economy will inevitably lead to an incomplete and unbalanced sense of economic well-being:

We’re in an economic hole, and as we climb out, what we need is not simply a measurement of how much money passes through our hands each quarter, but an indicator that will tell us if we are really and truly gaining ground in the perennial struggle to improve the material conditions of our lives.


About Dave Higgins

I've been interested in current events since at least the mid 1960's, and in ideas from modern science since the early 1990's. My website Quantum Age, which has been online since 1996, presents a basic framework for applying ideas from modern science to today's world. In this blog I discuss current events in the context of that framework.
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