> A million dollars spent on healthcare increases GDP by a million. A million dollars spent on war increases GDP by a million. A million dollars spent on rubber dog crap increases GDP by a million. But these transactions are not of equal value.
Actually, they are. The folks who spent a million dollars on rubber dog crap could have spent it on something else but they spent it on rubber dog crap. That million dollars is the value of that rubber dog crap.
Rubber dog crap is a bad example; how about orthodontics? There most of the value is in increasing your "prettiness rank", but there is a positional externality in that you necessarily decrease someone else's rank.
A lot of orthodontics is fixing things so someone can chew correctly, reducing pain etc. I'll assume that you didn't mean those folks....
Maybe you meant cosmetic dentistry, but even there, should we forever brand someone who didn't take care of their teeth earlier in life? What about folks who were given tetracycline when they were kids (which permanently stains their teeth)?
Maybe there's a good example in dentistry, but let's see one.
As to your "positional" argument, how are you separating out the "bad" positional change from "her teeth kept us from seeing his superior skills"? Or, is the latter also bad?
If there's value to people in looking at beautiful artwork, isn't there value in looking at (more) beautiful people? Improvement of one's appearance isn't entirely relative to others. There are absolute gains.
You don't think that raising the overall self-esteem of a population has a net positive effect on their society's condition?
I mean yes you could argue that it might contribute to a class divide, but I think orthodontic treatment is much more affordable for the middle class than it was 20 years ago.
Actually, they are. The folks who spent a million dollars on rubber dog crap could have spent it on something else but they spent it on rubber dog crap. That million dollars is the value of that rubber dog crap.