Hygro
soundcloud.com/hygro/
I was literally commenting that when we measure GDP we consider money outflows to be a loss of GDP, rather than considering the real-stuff inflows. Granted imports are still counted in their respective C/I/G purchases but that we choose to represent net exports as a loss when we gain more stuff than we trade away because we lost more money than we gained, you can see it was invented back when they pretended money was finite unless you dug more out of the ground.
I'm actually curious now if it was actually was written to be pro-bullionism. They were into the gold standard back then for international balances of payments, but most economists at the time were very decidedly anti-bullion. Economics and bullionism are kind of opposite schools of thought.
Calling getting more stuff for less stuff a trade deficit only made sense if constrained by scarce money, which was simply true at the time (by political choice). So GDP was probably written as such simply because it best reflected what was actually true then, and we made the mistake of thinking that that means the same thing outside of those conditions.
(Semi-related, the dogmatic approach that the market always correctly prices things according to the needs of the market was invented when everything was denominated somewhere down the line in gold, ergo it would be, without coercion or charity, impossible for someone to trade away more value than they receive, unless there's a time delay and debt, which is exactly what they were trying to articulate by counting imports against you rather than in your favor. You can also take it as a justification for why Britain was allowed to rob countries of their mineral wealth--because the Gold told them it was equal. AKA military imperialism is fair because the higher power of economics ordained it. Seriously the 19th century was crazy).
GDP was never meant to measure wealth (a stock), just economy-activity in annual flows. GDP's measure in money is actually a really interesting topic itself. People use it as a wealth measure however because it is.
Were you suggesting to bring it closer into line, however, that we subtract government purchases? Or did you mean to count investment/consumption as one private unit to be added to government purchases? Or did I misunderstand completely?
