Relative to What?

“We should not measure GDP because there are so many problems/controversies surrounding it.”

“Democracy doesn’t work.”

“Three hour examinations using pen and paper, sans Internet access, don’t make any sense .”


Just three examples of assertions out of many, many possible ones – and there is just one question that is good enough by way of response:

Relative to What?

That is, if you are saying that we should not be measuring GDP, are you saying that we shouldn’t be measuring economic output at all? Or are you saying that GDP isn’t the best measure of economic output? But both can be summarized more easily by saying “relative to what”? If you’re saying that a world with no economic measurement is better relative to a world with economic measurement, why are you saying so? If you are saying that GDP isn’t the best possible measure – relative to what? Whatever this other measure – is it as objective, as easy to obtain, as easy to meaningfully compare, as GDP?

Democracy doesn’t work compared to what? Are you suggesting a political system such as anarchy? And if yes, why is it better than democracy? Along what dimensions is it better, along what dimensions is it worse? How do you know? Are you suggesting another political system, not the absence of one? If so, which – and how is this system better and worse relative to democracy? Short summary: relative to what?

Wake me up at three in the morning, and I’m happy to go on a rant about how three hour examinations with no internet access simply don’t make sense for much of higher education. There are exceptions, and I don’t mean this as a one size fits all rule, but I should still be able to defend my stand if I’m asked the question: relative to what? Take home essays? Open book examinations? Take home question papers? No examinations? Vivas? Capstone projects? In what ways are these alternatives better, and in what ways are they worse than three hour in class examinations sans internet access? Short summary: relative to what?


It is extremely easy to poke holes in any system, because no system is perfect. The reason no system is perfect, as far as an economist is concerned, is because there is no such thing as a free lunch. That is, opportunity costs are everywhere.

So this, my second question, is effectively a restatement of the fact that opportunity costs are everywhere, or that there is no such thing as a free lunch.

But however you phrase it, the point is that as a student of economics, it is not enough to criticize the status quo, or to reject an idea as being bad/problematic. Evaluate the status quo or the alternative by gauging it against its competition.

“But xyz is bad because of abc reasons” is bad economic analysis. Well, incomplete economic analysis, at any rate. “Xyz is bad because of abc reasons, but it is also good because of pqr reasons, and it is better/worse than efg. Hence we’re going with xyz/efg” is better economic analysis.

Always remember:

Relative to what?

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