I’ve been thinking about GDP and its flaws lately and even wrote a blog on the subject but only just thought about how GDP is measured and the effect of Data Centers and GDP. My economic understanding is incomplete at best but I’ve done a little bit of my own research on the subject and I don’t like what I’m seeing.

Basically, GDP measures economic output and many consider it an excellent measure by which to determine the prosperity of a nation. A negative GDP can result in a recession which is generally considered the worst possible outcome for a nation. What if all, or most, of our GDP growth is related to Data Centers?

Data Centers and GDP

One of the main ways GDP is calculated is using investment and output. Well, tech companies are investing a huge amount in data centers. The data center’s processing power also figures heavily into the equation. Are data centers GDP so intertwined with the GDP that they completely mask their harm to the economy?

Your Local Data Center

It’s hard to shake the idea the reason Data Centers are getting approval in communities across the United States despite almost universal opposition from the people who live in those communities is that the politicians are being fed the false Data Center and GDP paradigm. If you build this data center in our community, our GDP will go up exponentially and that’s great for all the citizens even if they don’t know it.

Spoiler, it’s not. All that investment and computing power isn’t benefitting anyone other than the tech companies and it’s dramatically effecting people’s quality of life. The energy and resource consumption associated with Data Centers are dramatic and, frankly, probably result in many preventable deaths. Now, that’s just my opinion of course, I’m not an economist nor do I play one on television.

Extrapolating the Data Centers and GDP Argument

If our local, state, and federal government officials buy into GDP as it is currently calculated, it seems to me that all our economic growth is an illusion. We are not growing; we are in a recession and have been for some time. The people seem to understand this better than the politicians, probably because they buy groceries, provide for their families, live in a the real world. Politicians, well, better leave it unsaid in which unsavory world they reside.

Conclusion

The way we measure the economy is broken and probably has been for some time. It’s not just Data Centers. It’s big tech in general driving GDP ever higher while leaving the vast majority of citizens left out.

Tom Liberman