Yeah, that reverse argument doesn’t work. You can sell one iphone to a 1960 businessman for the price of a hundred houses, but even in that hypothetical you can’t sell a hundred iphones for a hundred houses each. You can go bigger and try to sell literally all tech advances of today, but even then 1960s US won’t agree to pay you 100x its total net worth. So the hundredfold growth in GDP is wholly imaginary, no matter from which year you look at it. The only sensible method is the one you don’t like: using a bunch of goods that bring about the same amount of happiness in any year, like a spoonful of jam, and measuring other goods compared to that.
I agree the hundredfold growth is a drastic overestimate, no matter how we slice it. But using using a modern price is still an underestimate: the first few iPhones really do yield a lot more value than the last few, and using a current market price misses that value. Price just doesn’t work as a proxy for value.
Yeah, that reverse argument doesn’t work. You can sell one iphone to a 1960 businessman for the price of a hundred houses, but even in that hypothetical you can’t sell a hundred iphones for a hundred houses each. You can go bigger and try to sell literally all tech advances of today, but even then 1960s US won’t agree to pay you 100x its total net worth. So the hundredfold growth in GDP is wholly imaginary, no matter from which year you look at it. The only sensible method is the one you don’t like: using a bunch of goods that bring about the same amount of happiness in any year, like a spoonful of jam, and measuring other goods compared to that.
I agree the hundredfold growth is a drastic overestimate, no matter how we slice it. But using using a modern price is still an underestimate: the first few iPhones really do yield a lot more value than the last few, and using a current market price misses that value. Price just doesn’t work as a proxy for value.