I get the impression that a lot of people in the west fundamentally fail to understand what the purpose of an economy actually is.
An economy is a model for allocating labour and resources in a way that meets the needs of the people in the country.
The original argument for capitalism was that market economy with private ownership is the most effective way to allocate labour and resources in a way that benefits everyone.
Measures such as the stock market and GDP were meant to act as proxies for measuring how well the economy was accomplishing its stated purpose, which is to improve the standard of living for everyone.
Understanding that these metrics are simply proxies has been lost today, and they’ve been turned into goals of themselves. People have started treating the stock market and GDP as the economy.
This is why we’re seeing an increasing disconnect between the economy that people are experiencing in their daily lives and news reporting on how the economy is doing.
And that’s why we see absurd articles like this one arguing that the recession people are experiencing isn’t real.
https://www.wsj.com/economy/it-wont-be-a-recession-it-will-just-feel-like-one-1919267a
I agree that these were never good measures of anything, but they are used as proxies for the health of the economy by mainstream western economies and that’s how most of western public sees them. People are told that if GDP is going up, that means economy is doing well, which implicitly promises that their own conditions should be improving.
At the very least, these indicators can be viewed as how much their conditions could potentially improve.
Exactly, you can use proxy measures as a form of abstraction, but unless you evaluate how well they perform in measuring what was intended to measure then you lose the plot.