Please, stop doing this - GDP is not a measure of wealth

Yes, yes, we know, making a plea for economic good sense to Guardian writers is an isometric exercise but please, please, could people stop doing this?

It’s here that Blackstone’s investment decisions are made. Last year, the company invested $270bn, bringing the total value of the assets it manages to $881bn, slightly more than the gross domestic product of Switzerland, and more than twice that of Denmark.

GDP and wealth are simply not the same thing. Therefore using the one as a measure of the size of the other is not just wrong it’s wholly misleading.

Gross Domestic Product is the value added in that economy that year. It’s also - by definition and design - equal to all incomes in that economy that year (we’ll leave the differences with GNP aside for a moment). So, it’s a measure of income.

Capital, well, that’s a measure of wealth - especially so here when what is being discussed is the investment of wealth into assets. The two are very different.

For the UK GDP is some £2.2 trillion a year or so. Household wealth is getting on for £15 trillion. A couple of trillion in “financial” wealth, a bit in furniture and so on, then the vast bulk split between pensions and housing equity. Blackstone is investing pensions money, by and large, and the complaint is that it’s into that housing. But pensions and housing are both - each that is - about three times UK GDP and that’s just the wealth of the UK. Blackstone is of course both collecting capital and also deploying it from and to many different countries.

If we think instead of the US economy then GDP is around the $25 trillion mark, household wealth possibly $150 trillion and the nation as a whole might be anything from $200 trillion to $400 more than that - depends how we measure the value of what the government owns.

At which point - yes, of course Blackstone is investing sums that are vastly larger than the GDP of some places. Beause wealth, that thing being invested, is very much larger than the income against which it is being compared.

So, could people stop doing this please? GDP is not an appropriate comparator to wealth.