Increasing GDP is not growth

I thought the usual claim was not "immigration increases total GDP" but "immigration increases per-capita GDP". Random example: this paper which, full disclosure, I have not read but only looked at the abstract linked.

I'm not sure any measure of GDP (total or per capita) is a great way of assessing immigration. Consider the following scenarios:

• A scenario like Phil's: An immigrant moves from a poor country to a rich country. They somehow become less productive when they do this, and earn less than they did before. But their income is positive, so the total GDP of the rich country goes up.
• A scenario showing the opposite problem: An immigrant moves from a poor country to a rich country. In the rich country they earn less than the average person there, but more than they did before. The immigrant is better off. The other inhabitants of the rich country are (in total) better off. But per capita GDP has gone down.

It seems to me that to avoid Simpson's-Paradox-like confusion what we really want to know is: when some people migrate from country A to country B, what happens to (1) the total "GDP" of just the people who were already in country B and (2) the total "GDP" of just the people who moved from country A? We might also care about (3) the total "GDP" of those who remain in country B. My guess, FWIW, is that #1 and #2 both go up while #3 goes down.

If you have a constant population, and GDP increases, productivity per person has increased. But if you have a border on a map enclosing some people, and you move it so it encloses more people, productivity hasn't increased.

Can you give examples of people confirmed to be actually making the mistake this post discusses? I don't recall seeing any.

The standard economist claim (and the only version I've seen promulgated in LW and EA circles) is that it increases gross world product (total and per capita) because migrants are much more productive when they migrate to developed countries. Here is a set of references and counterarguments.

Separately, some people are keen to increase GDP in particular countries to pay off national fixed costs (like already incurred debts, or military spending).

When it comes to funding science higher GDP means more tax revenue and thus more science even when GDP/person stays the same.

The same goes for a new TV serial.

I agree with the substantive point that the changes in living standards we ultimately care about come from productivity growth, not GDP growth as such.

Now for the inevitable disagreements/critiques:

1. The post title, "Increasing GDP is not growth", isn't actually true as such. Referring to increasing GDP as economic growth isn't a weird LW/transhumanist/etc. affectation; it's totally normal & conventional. If I heard a newsreader talking about economic growth, I'd guess they were most likely talking about (inflation-adjusted) GDP going up.

2. The people I most associate with this kind of immigration-grows-GDP meme are single-issue-ish advocates of open borders, but AFAIK they refer to immigration increasing global GDP (which is kind of a strange usage of "GDP", since the "D" does after all stand for "domestic", but that's what they say). It's right there in the title bar. This avoids the issue of country-level GDP being dependent on how one draws lines on a map.

3. It took me a moment to realize the post wasn't using "productivity" in the conventional economist's sense (at least when talking at the national level), namely labour productivity, which is output per worker or output per hour worked. This is distinct from output per person, and made the references to "productivity per person" momentarily confusing (because with the conventional understanding of productivity, writing "productivity per person" is a bit like writing "GDP per capita per person").

4. PhilGoetz probably knows this already, but I don't know whether everyone reading this does: some advocates of higher immigration explicitly expect immigration to raise productivity, specifically of workers who come from lower-productivity countries to higher ones. The usual term for this is the "place premium". A Google search brings back among other things an illustrative working paper by Michael Clemens, Claudio Montenegro, and Lant Pritchett.

I believe the argument was (or should have been) that immigration increases the GDP of the destination country by more than it decreases the GDP of the origin country, thereby increasing worldwide GDP per capita.

Well, GDP, productivity... so 19th century-ish.

How about GIP?

Gross Intelligence Product?

I'd like to take this a step further, even. If you are a utilitarian, for example, what you really care about is happiness, which is only distantly linked to things like GDP and productivity, at least in developed nations. People who have more money spend more money,^[citation_needed] so economic growth is disproportionately focused on better meeting the desires of those with more money. Maybe the economy doubles every couple decades, but that doesn't mean that the poor have twice as much too. I would be interested to know precisely how much more they actually do have, perhaps as measured by decreasing inflation adjusted rent prices, food cost, utility costs, used car prices, bus fare, etc.

Only a tiny fraction of startups are aimed at making rent cheaper or groceries affordable, although such benefits may sometimes trickle down. I'm somewhat hopeful for things like 3D printed luxury homes for the wealthy or Soylent for techies who want to countersignal.

If the rich really were utility monsters capable of enjoying each dollar of luxury items at least as much as the poor would enjoy the dollar, then there wouldn't be a problem according to a pure hedonic utilitarian. (Although, a desire for Fairness is apparently a human universal, according to moral foundations theory, so actual humans would be uncomfortable with this, even if their Liberty value was stronger, and overrode the concerns with fairness.)

It appears that money really can buy happiness for the poor, and that's still somewhat true for the middle class, but once you get to around upper middle class, it becomes extremely difficult to even measure additional gains in happiness. It's not clear to me that there even are gains beyond that point, but feel free to read the article on Happiness Economics yourself, particularly the sections on the effects of income on individuals, and the GDP/GNP section.

In fact, some countries appear to be much happier than you'd predict just based on knowing their GDP, while others are much less happy. This TED talk makes the case for optimizing for Social Progress Index rather than GDP, but I believe the field of Happiness Economics also uses things like Gross National Happiness, Satisfaction with Life Index, and the World Happiness Report, and I don't really know enough to have a strong opinion between them. I just think something in that general direction is a better metric than GDP or productivity.

GDP easily becomes a lost purpose, but this argument could have been done more clearly. There are two unrelated things here to talk about:

a) Does GDP truly reflect the generation of value, or is it influenced by technical details in accounting, and how much? For example, if what was previously a gray economy (e.g. friends cooking at home for each other) becomes official economy (e.g. everyone eating in a restaurant), the measured GDP will increase simply because what was previously ignored becomes measured, even without any corresponding increase in productivity. Actually, pushing for artificially increasing GDP by making all gray economy regulated could decrease productivity (as e.g. the owners of the restaurant need to deal with paperwork they didn't have when they cooked for their friends unofficially).

b) Do we care about total productivity of the country, or productivity per capita? Intuitively, people care about productivity per capita, because they care about their personal well-being. However, in certain contexts, such as international negotiation, having a large total productivity might be an advantage.

Speaking of immigration, immigration is not absolutely productive. There are a myriad of factors at play here. If one wishes to inject a population with a group in order to increase the population's overall productivity, they must ensure that the injected group is as-productive or more productive than the original population.