The shortcomings of social-democracy are held to be revealed by unfavorable comparisons of Gross Domestic Product per capita. At the most basic level, this is tantamount to criticizing the Boston Philharmonic because it can't make foul shots. We suggest the object of economic activity is not the maximization of GDP, but of well-being or happiness. What's the difference?
If my preference is to work 30 hours a week for $45,000, rather than 40 hours for $60,000, and I am compelled to work the longer week, GDP is higher and I am worse off.
If I get worse health care paying $5,000 a year for a private sector health insurance policy than the same amount in taxes for a public system, GDP is the same but I am worse off.
If Consolidated Crappola, Inc. dumps toxic material into the air that worsens my emphysema, in contrast to a regulatory regime that reduced emissions and my adverse symptoms, GDP might be lower while I am better off.
So short of a treatise, GDP glosses over differences in the value of public and private consumption, discounts the value of public amenities, and implicitly assigns a negative value to leisure time.
- Max Sawicky
I ultimately disagree but this is the argument put as best I've seen.