New Age History and Economics

The Day We See The Truth And Cease To Speak it, Is The Day We Begin To Die. MLK Jr.

Saturday, February 14, 2015

Is GDP a good criterion of economic development?

Is GDP a good criterion of economic development? 

A country with good economic development would ordinarily mean a country where all its citizens have all luxuries of life. Such a country would necessarily have low economic activity since citizens of such country have no need to purchase more goods as they already have most of what they want. That means production in such countries would also be low leading to lower GDP. Primarily higher GDP means people in these countries are still in need of goods, comforts and luxuries of life and such a country does not have a level of economic development where they are content and happy. 

A country with highest GDP will mean a developing economy and not economically developed. There would be an exception in case of countries having huge trade surplus that is positive balance of payments for example Germany and Saudi Arabia etc.

What is GDP?
The gross domestic product (GDP) or gross domestic income (GDI) basically measures a country's economic output. It is the market value of all final goods and services made within the borders of a country in a year. It is often wrongly correlated with the standard of living. GDP is determined by the product / expenditure approach i.e. sum total of all output in economy of every enterprise.  Since the product is bought by somebody it is sum total of all expenses.

Example: the expenditure method:

GDP = private consumption + gross investment + government spending + (exports − imports), or

GDP = C + I + G + (Ex – Im)

In the name "Gross Domestic Product,"

"Gross" means production regardless of the various uses to which that production can be put.

"Domestic" means that GDP measures production that takes place within the country's borders. In the expenditure-method equation given above, the exports-minus-imports term is necessary in order to null out expenditures on things not produced in the country (imports) and add in things produced but not sold in the country (exports).
“Product” means sum total of goods and services produced in country.

Gross domestic product comes under the heading of national accounts, which is a subject in macroeconomics. Economic measurement is called econometrics. 



Sunday, February 1, 2015

Hitler - Propaganda Excerpts Ch VI Mein Kampf.

"In watching the course of political events I was always struck by the active part which propaganda played in them. I saw that it was an instrument, which the Marxist Socialists knew how to handle in a masterly way and how to put it to practical uses. Thus I soon came to realize that the right use of propaganda was an art in itself and that this art was practically unknown to our bourgeois parties. It was the total failure of the whole German system of information. Germany was waging war for its very existence. The purpose of its war propaganda should have been to strengthen the fighting spirit in that struggle and help it to victory. 

But when nations are fighting for their existence on this earth, when the question of 'to be or not to be' has to be answered, then all humane and aesthetic considerations must be set aside; for these ideals do not exist of themselves somewhere in the air but are the product of man's creative imagination and disappear when he disappears. ..

During the War, propaganda was a means to an end. And this end was the struggle for existence of the German nation. Propaganda, therefore, should have been regarded from the standpoint of its utility for that purpose.   

The art of propaganda consists in putting a matter so clearly and forcibly before the minds of the people as to create a general conviction regarding the reality of a certain fact, the necessity of certain things and the just character of something that is essential.

All propaganda must be presented in a popular form and must fix its intellectual level so as not to be above the heads of the least intellectual of those to whom it is directed. Thus its purely intellectual level will have to be that of the lowest mental common denominator among the public it is desired to reach.  

Once we have understood how necessary it is to concentrate the persuasive forces of propaganda on the broad masses of the people, the following lessons result therefrom:

That it is a mistake to organize the direct propaganda as if it were a manifold system of scientific instruction.

The receptive powers of the masses are very restricted, and their understanding is feeble. On the other hand, they quickly forget. Such being the case, all effective propaganda must be confined to a few bare essentials and those must be expressed as far as possible in stereotyped formulas. These slogans should be persistently repeated until the very last individual has come to grasp the idea that has been put forward. If this principle be forgotten and if an attempt be made to be abstract and general, the propaganda will turn out ineffective; for the public will not be able to digest or retain what is offered to them in this way. Therefore, the greater the scope of the message that has to be presented, the more necessary it is for the propaganda to discover that plan of action which is psychologically the most efficient.

It was, for example, a fundamental mistake to ridicule the worth of the enemy as the Austrian and German comic papers made a chief point of doing in their propaganda. The very principle here is a mistaken one; for, when they came face to face with the enemy, our soldiers had quite a different impression. Therefore, the mistake had disastrous results. Once the German soldier realised what a tough enemy he had to fight he felt that he had been deceived by the manufacturers of the information which had been given him. Therefore, instead of strengthening and stimulating his fighting spirit, this information had quite the contrary effect. Finally he lost heart.

On the other hand, British and American war propaganda was psychologically efficient. By picturing the Germans to their own people as Barbarians and Huns, they were preparing their soldiers for the horrors of war and safeguarding them against illusions. The most terrific weapons which those soldiers encountered in the field merely confirmed the information that they had already received and their belief in the truth of the assertions made by their respective governments was accordingly reinforced. Thus their rage and hatred against the infamous foe was increased. 

The great majority of a nation is so feminine in its character and outlook that its thought and conduct are ruled by sentiment rather than by sober reasoning. This sentiment, however, is not complex, but simple and consistent. It is not highly differentiated, but has only the negative and positive notions of love and hatred, right and wrong, truth and falsehood. Its notions are never partly this and partly that. English propaganda especially understood this in a marvellous way and put what they understood into practice. They allowed no half-measures which might have given rise to some doubt.

Proof of how brilliantly they understood that the feeling of the masses is something primitive was shown in their policy of publishing tales of horror and outrages which fitted in with the real horrors of the time, thereby cleverly and ruthlessly preparing the ground for moral solidarity at the front, even in times of great defeats. Further, the way in which they pilloried the German enemy as solely responsible for the war--which was a brutal and absolute falsehood--and the way in which they proclaimed his guilt was excellently calculated to reach the masses, realizing that these are always extremist in their feelings. And thus it was that this atrocious lie was positively believed.

Particularly in the field of propaganda, placid aesthetes and blase intellectuals should never be allowed to take the lead. The former would readily transform the impressive character of real propaganda into something suitable only for literary tea parties. As to the second class of people, one must always beware of this pest; for, in consequence of their insensibility to normal impressions, they are constantly seeking
new excitements.

It is not the purpose of propaganda to create a series of alterations in sentiment with a view to pleasing these blase gentry. Its chief function is to convince the masses, whose slowness of understanding needs to be given time in order that they may absorb information; and only constant repetition will finally succeed in imprinting an idea on the memory of the crowd.

Every change that is made in the subject of a propagandist message must always emphasize the same conclusion. The leading slogan must of course be illustrated in many ways and from several angles, but in the end one must always return to the assertion of the same formula. In this way alone can propaganda be consistent and dynamic in its effects.Only by following these general lines and sticking to them steadfastly, with uniform and concise emphasis, can final success be reached. Then one will be rewarded by the surprising and almost incredible results that such a persistent policy secures.

The success of any advertisement, whether of a business or political nature, depends on the consistency and perseverance with which it is employed.

In this respect also the propaganda organized by our enemies set us an excellent example. It confined itself to a few themes, which were meant exclusively for mass consumption, and it repeated these themes with untiring perseverance. Once these fundamental themes and the manner of placing them before the world were recognized as effective, they adhered to them without the slightest alteration for the whole duration of the War. At first all of it appeared to be idiotic in its impudent assertiveness. Later on it was looked upon as disturbing, but finally it was believed.

But in England they came to understand something further: namely, that the possibility of success in the use of this spiritual weapon consists in the mass employment of it, and that when employed in this way it brings full returns for the large expenses incurred.

In England propaganda was regarded as a weapon of the first order, whereas with us it represented the last hope of a livelihood for our unemployed politicians and a snug job for shirkers of the modest hero type. Taken all in all, its results were negative."