Vol.3 No.31, 18 December 2003
A funny subject economics, isn't it?
In a letter to the Weekend Argus, SANE member Peter Vernon comments on a report about the theft of iron railings in Cape Town. He helps us think about the way conventional economics calculates the value of GDP (Gross Domestic Product).
I refer to the article in the Weekend Argus, headlined "Scrap metal dealers to blame for railing theft". Yes, indeed they are to blame. But what about the benefits to the economy?
The thieves get paid for the metal and then spend their ill-gotten gains, possibly by reinvesting in tools to cut pipes faster so that they can improve their productivity. The turnover in the scrap business increases. Somebody gets a contract to supply and fit new railings. Journalists and photographers are provided with work to tell us about it. The police spend resources on an investigation;perhaps they catch the crooks? If so: more work for lawyers, prison officers and suppiers to prisons.
So, Hey Presto, the GDP shows a nice growth! A funny subject economics, isn't it?
1, Midhurst Way
© South African New Economics Network 2006. Page generated at 17:23; 24 September 2006