Drug and prostitution to boost GDP and growth

[Christophe]

European economists want to boost growth by including illegal activities like drugs and prostitution. ESA 2010 standard which should come into force this year:

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This is the official position of Eurostat with its new standards (ESA 2010), which are to enter into force this year. They stipulate: “Illegal economic activities must be considered as transactions when all the participating units do so by mutual agreement. As a result, purchases, sales or barter of illegal drugs or stolen objects are transactions while theft is not. "
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http://alternatives-economiques.fr/blog ... e-resiste/

Note that prostitution is already included in the calculation of growth in countries where it is legal (Belgium, Holland, Germany ...) at least for the "declared" part of course ...

2 articles concerning the UK and Italy:

UK: GDP could grow by 12 billion euros if drugs and prostitution are included

EUROPE - Revenues generated from drug trafficking and prostitution in the United Kingdom, which will be included in the calculation of GDP in September, could boost it by 10 billion pounds (12,3 billion euros) official assessments released Thursday. According to estimates from the National Statistics Office (ONS) based on data dating from 2009, prostitution increases GDP by 5,3 billion pounds (6,5 billion euros) and drug trafficking by some 4,4 billion (5,4 billion euros).

The inclusion of these illegal activities in the GDP is provided for by European rules, in order to compare the economies of the member countries of the EU. On May 23, we learned that the integration of drug trafficking and prostitution into Italy's GDP could bring it an additional point of growth.

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http://www.huffingtonpost.fr/2014/05/29 ... 12162.html

In Italy, prostitution and drugs will swell the GDP. INSEE resists.

To support growth, nothing beats pimps. To boost it: drugs. We also knew that growth was a hard drug, this is confirmed in its method of calculation. That said, the title of this post, which more or less repeats those of the media which relayed the affair, does not allow us to understand the reasons which could well justify this reform of the GDP, pushed by Eurostat, but to which the accountants French nationals resist, without being able to totally oppose it.

The (supposedly) "amoral" principle of GDP is to take into account, in the market sphere, all economic exchanges and all monetary added values, whether the corresponding activities are judged useful or harmful according to ethical criteria, provided that the The exchange takes place between parties considered to be mutually consenting. I am not talking here about the activities of public administrations, counted in the GDP but essentially as production costs, without market exchange.

The question of including “moonlighting” and other illicit or unreported activities, which nevertheless give rise to monetary exchanges, many of which (the bulk of moonlighting) are based on, has logically been asked for a very long time. on the mutual consent (real or supposed) of suppliers and applicants. The question certainly has a technical aspect: how to measure what nobody declares (indirect evaluations are possible)? But it also raises a question of convention: should we (try to) do it, and why?

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http://alternatives-economiques.fr/blog ... e-resiste/

[Did67]

As far as I know, the production and trade of alcoholic beverages, beer, wine, whiskey, pastis are already in the GDP.

As far as I still know, the drugs ("drugs" in English), are also there ...

As far as I know, polluting activities harmful to health are there ... For example car accidents: replacement of the vehicle, activity of hospitals and care centers ...

And nightclubs where you can "get high" (put what you want behind this term) ...

I deduce from this that GDP is not a moral issue!

[Christophe]

Well! If morality and economy went hand in hand, the world would be very different !!

Now these 2 articles talk about "real" drugs, even if I share your opinion on alcohol ...

[Janic]

Hello
there are no real or fake drugs, only legal drugs or not!

[Petrus]

To read like that, it sounds crazy, but ultimately it is quite logical. The economy doesn't care about the suffering caused by their activities, only profit counts. So including drugs and prostitution in the calculations is ultimately less hypocritical than excluding them.

[Christophe]

And how much is the VAT on the pass?

Is it a need of first necessity or a luxury?

[sen-no-sen]

Everything is decidedly "good" to make believe that growth can continue!

It is in itself "logical" that drug trafficking is included in the GDP, because without this type of financial return, many "neighborhoods" could no longer take into account the endemic unemployment that characterizes them.
It has been a long time since politicians on the right and on the left have given up on the fight against crime.
For 30 years it has been a question of containing illegal activities, nothing more ... with all the risks that this entails for honest citizens!

[Ahmed]

Obviously, taking into account or not an index for the establishment of the GDP will change absolutely nothing in reality ...

It should be noted that drug trafficking derives its profitability from its illegality: it is the illegal nature of this activity which gives it an effect of rent (and at the same time of monopoly, but this point is delicate and I do not wish to expand on the subject).

These two domains do not create any value, insofar as prostitution is a simple supply of service and the main part of the sale of drugs also boils down to a tertiary activity (the producer price remains marginal). It is therefore a simple zero sum redistribution between economic agents.

[Christophe]

It should be noted that drug trafficking derives its profitability from its illegality: it is the illegal nature of this activity which gives it an effect of rent (and at the same time of monopoly, but this point is delicate and I do not wish to expand on the subject).

Certainly and if the drug trafficking was legal, the state would like its share ...

These two domains do not create any value, insofar as prostitution is a simple supply of service and the main part of the sale of drugs also boils down to a tertiary activity (the producer price remains marginal). It is therefore a simple zero sum redistribution between economic agents.

No value? Is that so ?

So in your opinion, the services provided, therefore the entire tertiary sector would not create wealth?

[Ahmed]

Christophe: two concepts must be carefully distinguished: on the one hand, the product of exchange which can (but it is not its aim), if it has a utility, satisfy a need (in the very imprecise sense of the term) and constitute a sensitive object, such as a chair or the performance of a play; on the other hand the value, which is what is added to the initial capital to produce a superior capital (and which is the goal of all activities in the economic framework of capitalism, by definition [hence the need for growth] ).

This value can only be formed through the expenditure of living labor to transform raw material. Anything that is not directly linked to this process constitutes "incidental expenses" which are charged against the value produced.

As the quantity of goods becomes abundant, the condition to be fulfilled for the valuation to become effective, ie that it is bought, becomes itself more difficult, hence the use of advertising and merchants.

This conditionality is so significant that it places all those who deal with advertising and sales in a favorable position in the balance of power between the different agents and ensures them the main gain: but we must not confuse consequence and cause.

This progressive monopolization can function as long as the mass of capital increases thanks to always new fields of production which come, by employing an ever greater labor force, to compensate for the fact that each commodity always contains less labor, therefore of value. : this is what happened, especially during the "thirty glorious years".

Today, this mode of operation is obsolete since the enormous amount of existing capital does not find enough new areas in which to invest and that the ever lower value of goods no longer finds a counterpart in a larger volume.
The only temporary palliative to this impasse: resorting to the value of living work that would be produced in the future.
The development of financial activities, far from being to the detriment of the "real" economy, is what makes it possible to postpone the collapse of the system a little further, even if it means bringing it down from higher.

This is how things have to be represented: a huge mass of people working in the tertiary sector, financed by an ever-smaller quantity of producers, a significant part of which, for want of really existing, is only found in a future that doesn’t 'will never happen (since the process always decreases the number of producers, it is only in the past that the resource could be found!).