Counting Drugs and Prostitution in GDP Makes a Mockery of Budget Rules
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The Italians have a word for it: sprezzatura, or studied nonchalance. The news that Italy plans to include prostitution and illegal drugs in gross domestic product sounds like a joke. But it’s not just an Italian initiative. New European Union rules require member states to include in GDP the value of all income-producing activities, including prostitution, the production and consumption of illegal drugs, and black market sales of cigarettes and alcohol.
The beauty? By counting prostitution and drugs in output, Italy will raise its GDP and thereby lower the ratio of debt to GDP, which will make it easier to comply with European Union rules on indebtedness. The same will go for other countries. That’s sprezzatura.