http://www.stanford.edu/class/polisci120a/immigration/Median...
Yes. This is something else virtually every economist will agree on. ACists, neoclassical, keynesian, Chicago, Austrian, I'm sure there are other major schools I'm forgetting, but this is a very accepted measure of standard of living in the field of economics.
A statement which only help to make his point about economists being ignorant crocks. GDP is heavily doubted as a good measure of standard of living in all other social sciences.
Examples of what the GDP measure fails to take into account: ecological sustainability, wealth distribution, non-market transactions, underground economy, non-monetary economy, subsistence economy, quality improvements and inclusion of new products, what is being produced, externalities, sustainability, etc, etc...
http://en.wikipedia.org/wiki/Gross_domestic_product#Limitati...
You won't find an economist (or any other person person) in the world that thinks GDP exhaustively covers every aspect of an economy and how it provides a standard of living.
What you will find is that they all agree GDP is the best available measure to determine a standard of living that is derived from some level of economic production.
If GDP is a terrible metric for determining standard of living, I'd like to know why it is still the most often used metric (by economists and non-economists alike) and a coherent argument for some alternative standard.
Any satisfaction based metric means that the majority of the developed world is doing something wrong -- numerous happiness studies show indigenous peoples often have a higher "happiness index" than people in the developed world.
Environmental based metrics have their own problems because environmental benefits and harms are not internalized by nations.
Income distribution based metrics aren't acceptable because the harms of great income distribution disparity are not easily mapped and are rarely agreed upon.
The only thing that might make sense is a metric based on life expectancy and education (Human development index from your Wikipedia link), but even that is problematic. Research created free-riding, regardless of patents.
The second a US company makes a drug that eliminates cancer, any lab that gets their hand on the drug can reverse engineer it with ease. The however many millions of dollars that went into building it (and become a function of its cost) are undercut by countries/people that do not respect the intellectual property rights of such a patent.
The outlay of spending becomes highly concentrated while the company doesn't see the returns that it expects. The drug copier gets the benefits of the hundreds of millions in R&D expenditure while only spending a few extra days of a scientists time.
The problem with economic sciences is that the GDP measure is used without critique, without fully understanding its trade-offs or by simply ignoring it deficiencies. That I believe is very careless when you are in the end dealing with the lives of real people.
> The problem with economic sciences...
Honestly, this is hard for me to read.
Lectures on the inadequacies of the GDP are Macro 101 stuff. Throughout college in my different econ classes the shortfalls of the GDP were frequently discussed by several different teachers.
This economic sciences conspiracy to prevent indictments of the GDP you're trying to present as fact is completely fabricated and gives a bad name to economists that do discuss the shortcomings of the GDP (read: every economist ever).
Incidentally, we only know about these changes in the income distribution because empirically oriented economists have been collecting and analyzing this data for many years.
Genuine progress indicator (GPI)
Index of Sustainable Economic Welfare (ISEW)
Gross national happiness (GNH)
The Gini coefficient
Just to name a few. None of which is perfect, but at least better than the GDP when it comes to actually saying something about the quality and state of an economy.
Why do I care how much someone else has?
Rich people don't live in ghettos - that's why ghettos have a very "good" Gini coefficient. (Ghettos would be better off if they did have rich residents.)
I didn't hate rich folks when I lived in a ghetto. Was I doing something wrong?
(1) Many if not most economists are empirical. Recent John Bates Clark medals---a good reflection of what academic economists think is the best work being done right now---have gone to economists doing empirical work. Recent examples include what works for development (evaluated with large randomized controlled trials), what are the causes of growing income inequality, how should we structure auctions etc. http://en.wikipedia.org/wiki/John_Bates_Clark_Medal . To say that most economists have no contact or interest in empiricism is incorrect.
(2) The point about simple models is not that economists fully believe them---it's that they force everyone to be explicit about assumptions. They also try to identify what are the key features of admittedly very complex phenomena. This is what models do in most scientific endeavor. That the models often perform poorly is a sign of an immature science---not fraud or dishonesty. You'd get eternal fame and become fantastically rich if you came up with a financial model with great predictive powers---do economists not create such models because they are stupid and corrupt? That seems unlikely.
(3) The transistor example completely misses the key distinction that every presentation of the simple supply and demand model always makes - i.e., there is a difference between the short term and long term. If demand doubled for transistors tomorrow, the price wouldn't rise?
(4) You confuse absolute and comparative advantage.
(5) "In the 1950s the US had a great economy. Except for some points of information, biomedical, and materials technology, it's not clear that our standard of living is as high now."
This is where I stopped reading - this is so obviously wrong http://www.wolframalpha.com/input/?i=GDP/capita+real+US that it's hard to take seriously any conclusions on the relative merits of different industrial policies the follow from this "fact."