Re: Where's Worstall?
GDP (currently) *includes* "cars, physical things", but it's not *synonymous* with them. It's entirely possible that if we completely stopped making cars, today, forever, GDP would go *up* as a result.
That was what Thatcher did, and it worked.
Cars have a utility to people, which is reflected by how much money they're willing to pay for them. If you can take those same resources and convert them into something that people will pay more for, then you'll be adding more value. That's why cars replaced carriages in the first place.
There's a classic fallacy in production engineering, where the output of a process is hard to measure, so you measure the input instead and assume that it's related. This can work for a little while, but if you keep it up for any length of time, you quickly find that the input is going up and up, and the output (as far as you can tell) remains flat, i.e. the process rapidly grows less efficient. That's how we got into the mess of the 1970s. It happens because of one of the iron rules of management: You Get What You Measure.
This "equating input to output" is endemic in our political system. It's why we've historically spent so much time arguing about things like "teacher/pupil ratios", "time spent per doctor's visit", "miles of road built/added", "numbers of people in work", rather than what we really care about in each case (educational outcomes, health outcomes, traffic/productivity, generation and distribution of wealth). Because in each case, the output is hard to measure, but the input is far easier.
Focusing on "things produced" is another way of measuring input rather than output. "Producing things" is not the goal. "Making people's lives better" is. Measuring GDP as a whole, without trying to judge or differentiate between "good" and "bad" production (e.g. manufacturing vs services), is the closest we currently have to a way of measuring that.