use of gdp as welfare measure was always based on qualitative correlations. gdp’s (well gnp’s) inventor said it should not be so used, but seemed to work pretty well. 1/

but that is changing, because of increasing market power in especially the US economy, and relatedly the difference between cost-based and market-based pricing in GDP for govt purchased vs privately purchased goods and services. 2/

under consolidated markets, GDP comes to include rents captured by monopolists. rent extraction reduces welfare but scores as higher GDP. 3/

relatedly, the cost paid for government purchased healthcare in social democracies is much, much lower than the “market prices” of healthcare in the US. quality and outcomes are not broadly higher. 4/

so, US health pathology increases US GDP, while failing to represent an increase (arguably representing a major loss) of real welfare in the United States. /fin