I am struggling nowadays to read the long and very detailed recent book "GROWTH " of VACLAV SMIL . Needless to say it contains magnificent comparisions and charts of various inventions of machines and its impacts to societies during centuries and even milleniums.
In the section where the writer is analyzing GDP progress of various countries during centuries he is trying to demonstrate that GDP is not a good indicator to discern not only the development of the countries,but also wealth distribution and happiness of the citizens. Another proposed indicator is the PPP which stands for "purchasing power parity".
On the same subject Nicolas Taleb gave various better examples in his famous book BLACK SWAN .
"Round up randomly 1000 person in a stadium and check for their average weight. If you add the haviest men the world into this conglomerate his contribution to the average would be vanishinly small as %0.6 . This what Nassim dub as MEDIOCRISTAN. But when you calculate the average their income of this 1000 people and add to the conglomerate Bill Gates who owns 100 billion dollars than everybody in this group become millionnaire. And Nassim dub this fact as EXTREMISTAN. "
As long we stay in Extremistan realm the "average" indicator is loosing its value and meaning, thence not giving a good overview on what we are looking.
Not all citizens living in countries with high GDP do not have necessarily a good life. Not even the average people !
In his book of "4 Hours Workweek" Timothy Ferris is demonstrating clearly this abyss of inequality while suggesting to live where PPP is lower while your income remains in wealthy nations average.
The new fashion among very rich Indians is the flamboyant wedding ceremonies held in Istanbul -spending millions of dollars- .But let us think about why they are not helding it in Paris or London ? There you have to spend three to four times more for the exactly the same spectacular entertainment.
Avram Aji
04.01.2020
