<p>This question is difficult to answer. You can start by simply finding the value of the manufacturing sector of any country's economy. But this quickly becomes very hard to define. Let's take Tesla for instance, Tesla manufactures cars, but they also are deeply involved in software engineering for their company. Is Tesla a software firm or a manufacturing firm?</p>
<p>The question gets even more complicated when you take a company which manufactures some of its own supply chain and also has investments in other companies, which will include basically every manufacturer in America, because almost any firm in the world will diversify its holdings when it has extra cash on hand.</p>
<p>The best answer you have will be to look at the latest GDP report and then subtract whichever sectors you don't consider &quot;real&quot;... which is available here for the United States: <a href="https://www.bea.gov/data/gdp/gross-domestic-product" rel="nofollow noreferrer">https://www.bea.gov/data/gdp/gross-domestic-product</a></p>
<p>But given how many large companies have financial investments as part of their corporation you have to have a good definition for what a &quot;real economy&quot; is in reality, which is not an easy question in your terms. Ultimately it is all real, just as real as the value of intellectual property such as patents or copyrights.</p>
<p>If you don't want to measure it in dollars you can always use xe.com to calculate the value in gold. Nobody measures economic data in gold, silver, or oxen nowadays.</p>

CC BY-SA 4.0
2021-02-12T05:42:21.990Z
2021-02-12T05:42:21.990Z
stidmatt
<p>It would be unlikely that anybody would try to build it.  Metrics exist to solve some type of specific problem.  They are not calculated just to know the answer.</p>
<p>Because different countries have different problems to solve, the calculation methods are not uniform.  Even if there were a single world currency, it wouldn't be directly comparable.  Now it wouldn't be an apples to oranges problem, but it would be a California Navel Oranges to Italian Mandarin Oranges problem.  They are both oranges but are a better fit for some purposes.</p>
<p>There is another issue too.  Imagine there is some firm that makes widgets.  It provides its own internal financing, accounting, legal and other functions.  It may provide warranties and buy options, futures, and forwards on steel.  It may sell options on widgets to customers too.</p>
<p>A key element of the United States in the world is to provide services.  China, before Trump came along, was a heavy outsourcer to the United States.  If another firm only builds widgets and outsources its financing, accounting, legal and other functions, such as logistics, to outsiders, then under your metric the first firm would entirely have its output as part of the metric, while the second firm would ignore the outsourced tasks.</p>
<p>Ignoring the gold element of your question, it would be challenging to even attempt what you are asking.</p>
<p>Finally, China's output is a function of America's tax structure.  If the US started paying back its debt to China, it would have to do so in goods and services.  American manufacturing would go up and the competition for wages would go up.  The fact that China has passed us is at least, in part, a function of our tax policies.  That could impact your metric.</p>
<p>After all, if the US really increased taxes, it would not need foreign financing.  Cash does not bear interest.  China would get a lump of useless cash unless it either bought goods and services from the United States or from a foreign business that was willing to accept dollars for goods and services in lieu of their local currency.</p>
<p>The US has mostly been offshoring dollars since Bretton Woods.  The process would have at least temporarily reversed under Nixon, but instead of surrendering one-third of the U.S. gold supply to France and Britain, we went to a fiat currency.  As a result of political agreements, such as those with Saudi Arabia under Nixon, the dollar has leaked out ever since.</p>
<p>The US could go back to gold or silver as a standard, but it wouldn't be at today's prices.  Your metric would be a problem because gold is not a currency anymore.  A gold standard would change the economic processes.  It wouldn't look like anything anybody is used to.  It would change behavior and so would change your metric too.</p>
<p>I think I see what you want to make, but I do not believe there is a way to do it.</p>
<p>Money is a yardstick of constantly varying lengths.</p>

CC BY-SA 4.0
2021-02-12T05:38:02.020Z
2021-02-12T05:38:02.020Z
Dave Harris
<p>A <a href="https://www.youtube.com/watch?v=gVYJOZ2IuJg" rel="nofollow noreferrer">youtube video by RT</a> predicts that China's economy will surpass the US in GDP by 2028. The conclusion was a result of projections of GDP growth for both nation's economies. According to an<a href="https://www.youtube.com/watch?v=7ArjMmnlG8Q" rel="nofollow noreferrer">earlier youtube video by CBS News</a>, China already passed the US in purchasing power, another economic metric, according to the IMF, back in 2014.</p>
<p>Due to the size of China's manufacturing sector, which is the sector that actually produces real products and stable jobs, it seems that China has long ago passed the US in the real economy of real goods and services.  <strong>Is there a metric of the real economy without the obfuscations of the so-called financial services sector which includes banking, insurance, securities, intangible assets, derivatives, incomes derived from interest and speculation, etc</strong>?   In other words, a gross measure of the sum of transactions of tangible goods and services, not including any financing for the tangible goods and services.  Preferably the metric would be in tons of gold, silver, or other real substances of intrinsic value, not in US Dollars or other fiat currency.  Thank you.</p>

CC BY-SA 4.0
2021-02-09T19:10:00.250Z
The provision that the metric be expressed in gold ignores the reality that we have not had gold-based currencies since the demise of Bretton Woods. Activity is measured in the domestic currency unit. If you wish, you can do a web search for GDP by industry to get a table of the breakdown. The problem is trying to do cross-country comparisons, since standards vary.
Brian Romanchuk
<gdp>
What would be a an accurate metric of the real economy without the financial services sector?
0tyranny0poverty
# What would be a an accurate metric of the real economy without the financial services sector?

(Asked by: username_0 on 2021-02-09)

A [youtube video by RT](https://www.youtube.com/watch?v=gVYJOZ2IuJg) predicts that China's economy will surpass the US in GDP by 2028. The conclusion was a result of projections of GDP growth for both nation's economies. According to an[earlier youtube video by CBS News](https://www.youtube.com/watch?v=7ArjMmnlG8Q), China already passed the US in purchasing power, another economic metric, according to the IMF, back in 2014.

Due to the size of China's manufacturing sector, which is the sector that actually produces real products and stable jobs, it seems that China has long ago passed the US in the real economy of real goods and services. **Is there a metric of the real economy without the obfuscations of the so-called financial services sector which includes banking, insurance, securities, intangible assets, derivatives, incomes derived from interest and speculation, etc**? In other words, a gross measure of the sum of transactions of tangible goods and services, not including any financing for the tangible goods and services. Preferably the metric would be in tons of gold, silver, or other real substances of intrinsic value, not in US Dollars or other fiat currency. Thank you.

**Tags:** gdp

> **Comments:**
> **username_1**: The provision that the metric be expressed in gold ignores the reality that we have not had gold-based currencies since the demise of Bretton Woods. Activity is measured in the domestic currency unit. If you wish, you can do a web search for GDP by industry to get a table of the breakdown. The problem is trying to do cross-country comparisons, since standards vary.  

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## 2 answers

### Answer by username_2 on 2021-02-12. Score: 2

This question is difficult to answer. You can start by simply finding the value of the manufacturing sector of any country's economy. But this quickly becomes very hard to define. Let's take Tesla for instance, Tesla manufactures cars, but they also are deeply involved in software engineering for their company. Is Tesla a software firm or a manufacturing firm?

The question gets even more complicated when you take a company which manufactures some of its own supply chain and also has investments in other companies, which will include basically every manufacturer in America, because almost any firm in the world will diversify its holdings when it has extra cash on hand.

The best answer you have will be to look at the latest GDP report and then subtract whichever sectors you don't consider "real"... which is available here for the United States: <https://www.bea.gov/data/gdp/gross-domestic-product>

But given how many large companies have financial investments as part of their corporation you have to have a good definition for what a "real economy" is in reality, which is not an easy question in your terms. Ultimately it is all real, just as real as the value of intellectual property such as patents or copyrights.

If you don't want to measure it in dollars you can always use xe.com to calculate the value in gold. Nobody measures economic data in gold, silver, or oxen nowadays.


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### Answer by username_3 on 2021-02-12. Score: 1

It would be unlikely that anybody would try to build it. Metrics exist to solve some type of specific problem. They are not calculated just to know the answer.

Because different countries have different problems to solve, the calculation methods are not uniform. Even if there were a single world currency, it wouldn't be directly comparable. Now it wouldn't be an apples to oranges problem, but it would be a California Navel Oranges to Italian Mandarin Oranges problem. They are both oranges but are a better fit for some purposes.

There is another issue too. Imagine there is some firm that makes widgets. It provides its own internal financing, accounting, legal and other functions. It may provide warranties and buy options, futures, and forwards on steel. It may sell options on widgets to customers too.

A key element of the United States in the world is to provide services. China, before Trump came along, was a heavy outsourcer to the United States. If another firm only builds widgets and outsources its financing, accounting, legal and other functions, such as logistics, to outsiders, then under your metric the first firm would entirely have its output as part of the metric, while the second firm would ignore the outsourced tasks.

Ignoring the gold element of your question, it would be challenging to even attempt what you are asking.

Finally, China's output is a function of America's tax structure. If the US started paying back its debt to China, it would have to do so in goods and services. American manufacturing would go up and the competition for wages would go up. The fact that China has passed us is at least, in part, a function of our tax policies. That could impact your metric.

After all, if the US really increased taxes, it would not need foreign financing. Cash does not bear interest. China would get a lump of useless cash unless it either bought goods and services from the United States or from a foreign business that was willing to accept dollars for goods and services in lieu of their local currency.

The US has mostly been offshoring dollars since Bretton Woods. The process would have at least temporarily reversed under Nixon, but instead of surrendering one-third of the U.S. gold supply to France and Britain, we went to a fiat currency. As a result of political agreements, such as those with Saudi Arabia under Nixon, the dollar has leaked out ever since.

The US could go back to gold or silver as a standard, but it wouldn't be at today's prices. Your metric would be a problem because gold is not a currency anymore. A gold standard would change the economic processes. It wouldn't look like anything anybody is used to. It would change behavior and so would change your metric too.

I think I see what you want to make, but I do not believe there is a way to do it.

Money is a yardstick of constantly varying lengths.


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