What's a proper measure of economic growth?

[amagimetals]

Increased consumption is a consequence of economic growth, not the cause of economic growth.

Capitalism is called capitalism because economic growth occurs from an accumulation of capital. To find economic growth you should look at capital accumulation (investment and savings), rather than GDP which includes government and private consumption.

[xxjs]

https://mises.org/daily/6306/Government-Bloat-is-Not-Growth

[Vitalik Buterin]

GDP is actually quite useless IMO, even not taking into account arguments that an economy that "produces" less may still be better because it may have much more leisure time or non-monetary activity. Once you think about it, the reason why is quite obvious. Over the very long term, where busts and booms and structural shifts become irrelevant, what does the GDP ultimately track? The answer is simple: inflation. If you take the modern economy, and substitute computers and high-tech biomedical devices and all our other 21st century goodies with all their 18th century equivalents, chances are the GDP will still be something close to the exact same $15 trillion - what is being traded for the money will simply change. But if you keep the modern economy and pass a law that doubles the money supply every year for ten years, by 2023 the GDP is going to be at least $15 quadrillion, if not rapidly approaching infinity.

GDP indexed to CPI is a start, although CPIs tend to be very easy to politicize. Direct quality of life indices (eg. health, happiness, education, leisure, square feet housing per person) also have their weaknesses - failing a direct quality of life index may simply reflect a difference in preferences rather than any actual weakness in the underlying economy. If people don't care about one of the above variables (eg. hard working culture, anti-intellectualism, urbanism vs suburbanism, Achilles' attitude to fame vs longevity), then the score within that group will be quite low even though the wealth may be there to make everything trivially available for anyone who wants it. Ultimately I don't think there is anything close to an index that can say for sure if an economy is doing "well" or not. Targeted statistical measures like money supply inflation, disease mortality rate, etc, are all very useful for those who care about those specific variables, but the more general you get the less valuable the numbers become.

[hazek]

I think the best measurement would be by measuring how much goods/services does a fixed amount of money buy. This of course could be a basket and goods could be divided into categories and assigned point value so you could end up with a sum of points per money unit as an index.

And to determine the basket and point value of categories you'd simply do a large and broad enough survey of the population. The more some type of goods show up the higher point value they'd get, the cheaper it is to buy them the higher the point multiplier.. ect.


Of course I wouldn't trust such an index coming from a centralized involuntary organization like a government either but if it were provided by the market I think it could give us a pretty good indication of economic growth especially since how I define economic growth is being able to afford more goods/services than before.

[Luno]

The trade balance is not GDP, but it helps to export more than you import. Growth has become a meaningless magic buzz word, like "IT".

If the medical profession took it as lightly as politicians defining growth, it would be sufficient to diagnose all deaths as accidents or old age.

[notme]

Consumer surplus: median income - basic cost of living (adjusting both for family size).

If a new disease treatment is created that is far cheaper and more effective than previous treatments, GDP would fall but consumer surplus would rise (medical expenses portion of basic cost of living would decrease).

[hashman]

Consumer surplus: median income - basic cost of living (adjusting both for family size).

If a new disease treatment is created that is far cheaper and more effective than previous treatments, GDP would fall but consumer surplus would rise (medical expenses portion of basic cost of living would decrease).

+1  Consumer surplus as you define it looks like a winner so far.. 
can you find some more data for us

[DeathAndTaxes]

Consumer surplus: median income - basic cost of living (adjusting both for family size).

If a new disease treatment is created that is far cheaper and more effective than previous treatments, GDP would fall but consumer surplus would rise (medical expenses portion of basic cost of living would decrease).

Why would GDP fall?  Unless you think the consumer will not spend the money (i.e. my insulun use to cost $200 per month but now I have this pill for $20 per month which does the same thing so I guess I should burn this $180 left over)?

[notme]

Consumer surplus: median income - basic cost of living (adjusting both for family size).

If a new disease treatment is created that is far cheaper and more effective than previous treatments, GDP would fall but consumer surplus would rise (medical expenses portion of basic cost of living would decrease).

Why would GDP fall?  Unless you think the consumer will not spend the money (i.e. my insulun use to cost $200 per month but now I have this pill for $20 per month which does the same thing so I guess I should burn this $180 left over)?

Because the savings rate has been negative in this country since around 2001 so that $180 left over will go to paying down debt, which causes deflationary pressure.