What Is Value?

Mike Bloomberg believed deeply in a simple management principle: You can only manage what you can measure.

At Bloomberg, everything was measured.

Audience. Speed. Errors. Revenue. Usage.

Performance.

There was a constant process of auditing the business and each reporter asking whether the numbers matched what people thought was happening and how it could be improved every day

It was a very effective way to manage.

But there is a catch. Measurement only helps if you are measuring the right thing.

And there may be no better example of that problem than gross domestic product. GDP was developed during the Great Depression to measure economic activity.

It was never designed to answer the much larger question we routinely ask it now:

Are we doing better?

Want to increase GDP? Break your neighbor’s arm. Your neighbor goes to the emergency room. A doctor examines him. Someone takes an X-ray. Someone sets the bone. The hospital sends a bill. The pharmacy sells painkillers.

Money changes hands. GDP goes up.

What GDP does not subtract is the broken arm. We call the spending “productivity.” Human beings call it a broken arm.

A hurricane destroys a city. Homes are rebuilt. Cars replaced. Roads repaired.

Billions of dollars move through the economy. Productivity rises. GDP rises.

But nobody became better off because their house was destroyed. The same problem now exists in digital form. Suppose an algorithm becomes extraordinarily good at manipulating the human dopamine cycle.

It learns exactly what makes you angry. What makes you afraid. What keeps you scrolling.

Millions of people spend another billion hours staring at their phones. Advertising is sold. Engagement rises. Revenue rises.

Productivity rises.

But what was created? Maybe nothing.

Maybe something was destroyed. Attention.

Time. Sleep. Relationships. Human agency. That is why I increasingly resist the way we use the word productivity. Productivity for whom? Productivity of what?

If a company becomes more profitable because it captures more of your time, is that productivity?

If healthcare spending rises because more people are sick, is that productivity?

If a natural disaster generates a construction boom, is that productivity?

Our national scoreboard records transactions.

It does not reliably distinguish between creating value and repairing damage. That is the same broken gate we see in profit.

Profit cannot tell whether money was made by creating value or extracting it.

GDP cannot tell whether growth came from making human beings more capable or from generating more transactions around their problems.

And that matters enormously in the age of artificial intelligence.

AI could make millions of people more productive, creative and capable. That is real value. It could also become the most powerful machine ever built for capturing attention, eliminating choice and manipulating behavior.

That could generate enormous economic activity too. Our current scoreboard might celebrate both.

So, the question cannot simply be:

Did GDP grow? It has to be:

When are we going to redefine what we measure in the GDP?

Because Mike Bloomberg’s principle was right.

You can only manage what you can measure. The harder question is whether we are measuring what actually matters.