How do you really compare the economic mights of countries?

Factual Questions
1

There is GDP and there is GDP per capita, but none really shows you how much the country is strong. The first one shows how much your country produced/provided, while the second one showed how much that is when you split it amongs’t it’s citizens.

As an example, let’s imagine a building with a 100 people and each made a dollar, so 1 dollar per person. Now let’s imagine a small house with just 2 people and just 10 dollars.

The building will have a 100 dollars of GDP total, while the house will have just 10, so that is a 10 times larger GDP, however, the buildings residents will get just 1 dollar per capita, while the 2 house residents will get 5 dollars and their GDP per capita will be 5 times larger, even though their “country” made 10 times less than the building country.

If you take Finland and India, India has a huge industry and a huge population and it’s GDP is 10 times larger than Finland’s, however split per capita, Finland is around 10 larger in GDP per capita and more importantly, San Marino has an even larger GDP per capita. San Marino is a small 30k town and it has a more than 10 times larger GDP per capita than India.

So…is there a better measure unit that takes in mind both how rich the people are and how large the industry is?

San Marino probably can’t afford a squadron of F-15 fighters, despite them being among the top in GDP per capita, since their GDP sucks. North Korea also probably couldn’t buy a squadron of F-15’s (disregarding the political reasons), despite it’s GDP being over 20 times larger than that of San Marino, since their GDP per capita sucks, Yemen has a similar GDP, so you can take Yemen as a alternative to NK, if NK is too bizzare of a example.

On the other hand, Israel has a decent GDP and GDP per capita and can afford loads of squadrons of even newer fighters, is there a measure unit in which Israel is stronger than both India and San Marino in this case?

2

Well, Israel *isn’t *stronger than India by any standard measure so I’d be very suspicious of one that was sufficiently biased to rank Israel that way.

Israel chooses to spend twice the percentage of its GDP on its military that India does. That doesn’t make its economy stronger. You could argue that it makes the rest of its economy weaker.

GDP is actually a pretty good indicator of a country’s economic strength. Looking at the list of GDP (nominal) I see the world’s strongest countries at the top.

It’s true that GDP has problems and many people have proposed alternatives. The problem with those is that even if they were clearly better, a huge amount of time and effort goes into creating the GDP. To abandon it would take even more time and effort and the entire world would have to do it as once. Not likely.

3

Military is just an example of something where you can find expensive, but not needed “toys”, we can look at highways as well or railroads. Israel has high speed railroads, great highways and so on. Norway is another example, or Ireland, Denmark,etc., all small countries, but with a great combination of gdp and pc. Even though Indian GDP is higher, building large infrastructure project probably strains them more, than it does countries with a combination of high gdp and high per capita.

Romania and Portugal for example, their GDP is about the same, however Romania has twice as much people, so Portugal’s per capita is twice as large as Romania’s, it’s gdp per capita is higher than Greece’s and slightly lower than Taiwanese, while Romanian per capita is way lower, around Brazil, Lebanon and Mexico. In this case the more powerful country is obviously Portugal, funnily enough, Romania just bought several used F-16’s from Portugal, which kind of symbolizes this.

4

The answer is going to depend on the OP’s definition of “powerful” too. Further complicating things is that certain countries, like Israel and India, receive substantial amounts of foreign monetary aid. Israel, in particular, receives significant military aid from the US; so comparing it to another country with a similar GDP is not going to give you a full picture if your definition of “powerful” includes factors such as how many F16s it can field.

5

dofe is quote correct that you need to define your terms before we can understand what your complaint is. This post seems to say that per capita GDP is a good guide to your rankings. So what more do you need?

6

I think the OP has a point in terms of military might. In terms of a sustained conflict, there are important differences between a big country with low GDP per capita vs a small country with high GDP per capita even if the nominal value is the same.
Or between a poor country that spends a lot on its military, vs a rich country that spends a much smaller percent, even if they end up with comparable militaries.
I don’t think there’s a single benchmark though that tries to encapsulate all these factors.

More generally, for economic “might” I think such a figure might well be more misleading than GDP. It might lead us to think for example that small european nations have little heft when in fact in many ways they operate as a powerful block (and I mean more generally than the EU).

7

You’re asking for something that doesn’t really exist. However, it sort of exists for some aspects of your question.

PPP (Purchasing Power Parity) measures how much it costs to buy certain things in each country. This often gives a more “level” comparison, because it ignores things that might give a false impression of wealth or poverty.

Here’s one version of it.

8

Israel has high speed rail?
This is why there are multiple numbers - there’s a number for every occasion. What to know how well off the average citizen is? There’s GDP. If the gap between rich and poor is too much - there’s median income. Relative military might can depend on various numbers - size of army, number of aircraft/ships/tanks etc. Actual GDP gives a good idea how fast the country could buy or make replacement military equipment. I’m sure there’s a number somewhere for the estimated current value of the country’s infrastructure, how much is already invested in roads and bridges, rail and airports, or even such details as the total worth of the housing market. Employment rate, average income, literacy rate, etc. all tell you something about a country.

If your focus is on military strength, the obvious is the number of tanks and aircraft, the main determining factors in any combat nowadays. If then you want to compare apples and oranges, like Abrams vs. Shermans, then perhaps the value of the military hardware would be a good indicator; one $20M tank is the equal of a few dozen sub-$1M tanks - if you can even still buy those. I think that assorted countries can be graded on a scale based on the level of tech they can afford.

You may think - “it’s just a matter of spending some money”. However, the Iran-Iraq war demonstrated the main problem with that. Once both sides had used up their expensive imported equipment, it boiled down to the level of about WWI trench warfare - the level of technology both countries could effectively sustain on their own without a significant outside boost. Fancy modern tech with all its embedded electronics needs the spare parts chain and the technicians to effectively maintain that tech. Absent that, you at reduced to mechanics fixing lower-tech steel and diesel mechanical equipment, artillery barrages rather than fancy targeted drone strikes and supersonic jets, etc.

9

That is not what happened in the Iran-Iraq War at all, in fact Iraq esepcially continued to get modern weapons througout and also developed domestic industry. The stalemate was due to the militrary situation, not due to consdierations of supply.

Comparing a small country like Israel and a large one like India is misconcieved. Its not apples and organes. Its apples and the supermassive blackhole in the center of the galexy. GDP is a good rough and ready measure. But it breaks down after a while.

10

Another related question would be to ask - if two countries had rough parity in GDP, population and industrial base - what other factors would create a significant difference between their performance in a crisis, which may not just be a war but could also be an economic collapse, epidemic outbreak or zombie holocaust.

I expect the other things that might matter a lot in differentiating the fate of the two countries would be:

  • social capital - ability to mobilise citizens to provide support for refugees and social reconstruction, which may favour both totalitarian and democratic countries with a strong civil emergency tradition.

  • aggressiveness of their foreign policy and who their friends are, and perhaps willingness-reluctance to accept UN / Regional state groupings interference in their affairs

  • trust in government, so that economic trouble doesn’t least to rioting, secession, regime change and foreign interference

  • economic stability, and ability to get more money cheaper in international markets.

11

As others have said, the question is not clear. What does economic might actually mean? IMO, we need the net worth of the country. The might of a country, economically speaking, would be something like it’s ability to apply economic force, and net worth is how much of that you got. GDP is more analogous to cash flow.