GDP is the total value of goods and services produced within a country (or other specified territory) and is currently the most widely used measure of economic performance. There are a several criticisms of its ability to do even this, but on top of this it has also become a proxy for judging standard of living. At low levels this is probably true, but the higher GDP gets the less accurate a measure it becomes. Also, as the proxy has become the de facto “standard of living”, achieving increases in GDP have become policy goals in themselves, without thought about whether these increases are actually raising living standards. Hence, the measure has become the target and is just another manifestation of chasing money (or growth) for money’s sake rather than for the benefits it is supposed to confer.
So if not GDP, what instead? It comes as no surprise that due to the many questions over the validity of GDP as a measure of both economic performance and standard of living, there are a range of alternative measures currently around that are used to gauge societal progress that each use different methodologies and factors. What we don’t have is consensus over a suitable alternative that is globally comparable over a range of political ideologies. And that’s what we should be striving for. By identifying and agreeing the factors that we (as a global society) consider the best measures of our well-being we’re in effect setting goals to develop our economies/societies in those directions.
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Excellent idea, we do need another index of well being. I'd be interested in knowing more about the range of alternatives which you mention. I dont think its beyond us to agree one, but there are many variables such as peoples different spiritual beliefs, cultural values and social needs which would require very careful consideration to make the whole inclusive. However the UN has defined its human rights declaration, and no one has found a problem with that.. which gives hope that as family humanity has intrinsically more in common than it has diversity on the surface. Maslow's hierarchy of needs would have to be addressed I think, so that physical needs such as clean water, food, shelter and healthcare are part of the equation,plus education, connection to family and community, and freedom of speech and religious expression. Id be interested in hearing more about this idea and your view on what the index of wellbeing might include.
ReplyDeleteYes - but what should we be using instead of GDP? assuming that we need societal macro-indicators that add up to some measure of wellbeing, what might they be? education? levels of crime? numbers of fit and healthy children? child poverty? what else?
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